Kevin Ovenden is an organizer of the Viva Palestina solidarity group and veteran of two convoys to Gaza. He spoke about the murderous Israeli assault on the peace flotilla, and he makes the case that the Palestinian solidarity movement must seize the moment to build wider support for ending the siege.

Lee Sustar:  When did it become clear that the flotilla faced violence at the hands of Israeli military forces?

Kevin Ovenden: I became increasingly convinced that the Netanyahu government would stop at nothing to stop the flotilla, and the reason for my thinking was that it became clear that allowing the flotilla in — given the level of international support that was developing on Thursday and Friday of the previous week — would have signaled the end of the embargo on Gaza.

In fact, what’s happened has also signaled the end of the siege. It’s changed the situation utterly.

At the time, I believed that Israel’s calculation was based on two things — one, that the force used would be brutal, but would not lead to such a large number of casualties –though it would lead to casualties. And second, that they would get away without any backlash in world opinion because, quite frankly, they’ve gotten away with far bigger crimes. They got away with, at least in the immediate term, the murder of over 1,400 Palestinians in Gaza with the assault in December 2008 and January 2009.

By Saturday, May 29, and certainly by Sunday, I became convinced that this was the calculation that had been made.

Ninety miles away from Israeli territory, which is well within international waters, we made the first contact with Israeli forces when we were parallel with the north of Israel, just coming south of Lebanon. When that happened, I sent out a very short but ominous e-mail alert to friends to circulate, anticipating that there would be a violent attack on the flotilla.

LS: The Israeli government and the right-wing media claim that Israel made an attempt at a nonviolent seizure of the ships, and their soldiers only fired back when they were attacked by the residents with pipes and other weapons. What really happened?

KO:  I was on the lead ship out of six — the Mavi Marmara. The initial contact was made at 11 p.m. on Sunday night, and people came to the top of the ship — there was obviously a lot of commotion. We had satellite broadcasting on board, and we got our message out around the world.

But for two or three hours, people were milling around, and lots of people went to get some rest, on the advice of the organizers. It was pitch black, the middle of the night.

We were 90 miles away from Israel. The internationally recognized sovereignty zones extend 22 miles into the sea. Obviously that doesn’t apply for Gaza, itself, but we were well away from Gaza. The Israelis have unilaterally extended their sea border to 68 miles. But we were a further 12 to 22 miles outside of even that unacceptable and unsupportable extension.

So people got some rest. There were lots of people on the lookout. I woke up at 4 a.m. along with lots of other people.  It was around the time for the fajr morning prayer for the Muslims on the vessel. At about 4:25 a.m., the assault began.

It began with percussion grenades. They are an explosive, and they can injure people badly when they go off next to them. They were designed to create panic, which, itself, is an extremely reckless and violent act when you consider that this was a civilian passenger ship carrying over 500 people from 32 different nationalities.

The youngest participant was not yet one year old. The oldest was 88 years old. We were carrying, among others, parliamentarians, including two members of the German Bundestag, and the exiled Eastern Catholic archbishop of Jerusalem, Archbishop Hilarion Capucci, who is 85 years old and has the use of only one leg. This is an indication of the kinds of people who were aboard the ships.

To fire percussion grenades and generate panic on a boat moving at a speed of about 22 knots in pitch darkness in the open sea in the Eastern Mediterranean at night is, itself, a violent act.

Israeli attack dinghies, called Zodiacs, moved up very quickly on the side of the boat. They were carrying fully armed Special Forces, full commando attack units.

By fully armed, I mean something like five pieces of firepower or knives — rifles, sidearms, commando knives, balaclava-covered faces, Kevlar helmets and so on. In other words, something akin to the U.S. Navy Seals people see in the movies in a glamorized way.

A helicopter moved in over the ship, and people began to file down. There was, of course, massive commotion aboard the ship. In that commotion, some people responded quite instinctively and with good cause — and with all legal and moral authority on their side. They pushed back, fought back with their hands and with whatever was to hand on the top of the ship where the first soldiers landed. Two soldiers were pushed from the top of the ship onto the next deck down.

They had already opened fire with what I thought to be rubberized bullets. These are not bullets that are made of rubber. They have a steel core, but are surrounded by rubber, and can, themselves, be lethal. But almost immediately, we heard the different noise of live rounds being fired — but not indiscriminately or wildly. Rather, it was carefully targeted from both sides of the ship — which was surrounded — from the helicopter, and from those Israeli attack forces who were landing on the ship, itself.

I can give you some examples of what happened – -one from another colleague who was also on the Viva Palestina delegation aboard the ship, Nicci Enchmarch. She was next to one of the very first people to be killed. He was a Turkish man who was holding a camera — that’s all he had in his hands. He was shot directly through the center of the forehead. The exit wounds through the back of the head took away the back third of the skull. He fell to the ground and experienced his last few seconds of life. This is the nature of the attack from the Israelis.

After they commandeered the whole ship and brutally rounded people up, they gathered together whatever they could find on the ship to pile up and show what we had used as weapons. We could see that they took knives from the kitchen, where, of course, there were knives. They were kitchen knives, not commando knives or anything like that — and they piled those up as if they were used as weapons.

They most certainly were not used as weapons. The evidence for that is the two Israeli soldiers, who were disarmed for the safety of everybody on the ship. They were very quickly disarmed and taken down to the area we’d set up as an improvised emergency room. They were looked after — guarded — so that there would be no reprisals from anybody who was feeling outraged.

The injuries that they sustained were injuries from being manhandled, perhaps hit with sticks. They were walking wounded. They were given back to their units as soon as possible, after the murderous attacks stopped.

This is why the Israeli lie machine is stumbling to a halt on this question. Whatever they claim, whatever selective footage they try to put forward, the brutal fact is that nine people –at least — were murdered, with gunshot wounds, and some Israeli soldiers ended up getting roughed up. That’s the balance of the use of force — on the one hand, the use of force by some people to defend themselves; on the other, a truly murderous attack, a massacre.

LS:  Can you help answer the question about the confusion, about the numbers dead?

KO: Yes.  People were killed in various parts of the outside of the ship, on the decks. The attack lasted for about 28 minutes. The captain was then able to broadcast by loudspeaker that the ship had been taken. He told everybody who had been on the outside of the ship to desist from demonstrating against the Israelis. Many of us, simply by our physical presence, were hoping to delay the attack and protect the lives of other people.

No one knew, when the live firing started, what would happen if the Israelis got inside the ship, and perhaps started firing wildly where there were even more people. So we then went inside to the large sleeping areas, and the Israelis poured onto the walkways and onto the very top of the ship — into the bridge and the engine room and so on.

Then, for more than an hour-and-a-half, we appealed via the loudspeaker system, and via an Israeli Knesset [parliament] member, an Arab who speaks fluent Hebrew. She went forward to the windows with a sign explaining who she was, and that we had many, many injured.

We had managed to get as many as we could to the makeshift emergency room — some of which became a makeshift mortuary. But many of the people who were killed or seriously injured were still on the roof and the top decks of the boat. It was chaos.  We didn’t know how many there were. She was told to go back or she’d be shot, as would anybody who attempted to make contact with the Israelis.

For more than an hour-and-a-quarter, we were appealing for help in a situation where quite literally we had people who were bleeding to death. According to the medics, at least one of those people who died may well have had their life saved if more sophisticated medical assistance of the kind that’s onboard an Israeli vessel had been to hand.

But we were not allowed to evacuate any wounded over to the Israelis for more than an hour-and-a-quarter, during which time one person died. So you can imagine the situation. There are seriously wounded people, and bodies lying in various parts of the ship. And then we were treated with a mixture of contempt, humiliation and attempts to degrade us throughout the rest of the horrific, horrific ordeal. There was scant regard for the wounded.

We tried to get out one wounded person at a time to the Israelis. The Israelis were not at all sensitive in handling them. We had them on stretchers, but they were rudely bundled up upstairs. These are people with abdominal and serious leg wounds. We sent experienced medics, one with each of the wounded. The medics were taken, thoroughly body-searched, handcuffed and not allowed to be with the wounded.

We weren’t allowed to go upstairs, which was where most of the bodies were. So it’s taken some time to piece things together. There are still two critically ill people in Israel, and there are six in the military hospital in Ankara, who are very seriously ill, but appear to be recovering. So I’m afraid to say that the figure of nine deaths, which took us 48 hours to establish, could go even higher.

LS: What was the treatment you were given when you were finally taken to the Israeli port of Ashdod?

KO: They stopped the ship to begin removing bodies.  This was still while we were at sea. They will, of course, have taken pictures. People have to ask themselves why, if the Israelis are so keen to explain what’s taken place, have they have not been prepared to release those pictures to the world? We know why. I found out from Turkish officials that one of the people killed was shot at close range through the back of the head –which is an execution.

As the ship was stopped, and after the seriously wounded had been evacuated, we were led out onto the deck one by one, thoroughly searched, with all our belongings and everything taken. Some people had their passports taken at that stage.

We were cable-tied with those plastic cuffs — and most of the men with their hands tightly behind their backs. Most of the women were in front. Some people — journalists and members of parliament — were not cable-tied. But we were placed on the decks of the boats, with many people in stress positions, on their knees, heads down, arms cable-tied behind their backs.

We weren’t allowed to talk. People who asked questions were pushed down. Anybody who tried to stand up was pushed down, so that they fell down, with guns pointed in their face. It was all the tactics that people may have seen meted out against the Palestinians and meted out by occupation forces in Iraq, Afghanistan and elsewhere in the world — paramilitary terrorizing tactics.

I saw one British citizen on his knees, arms cable-tied behind his back, slapped three times across the face. Three people who I took to be Palestinian were also blindfolded and then kicked to the ground, arms tied behind their backs. Sheikh Raed Salahm — a leader of the Islamic Movement in Israel who was with us who is from Jerusalem — was taken off and severely intimidated, although he maintained his composure throughout.

There was a menacing atmosphere, one in which you could legitimately fear that someone could be shot even though they were handcuffed.

When we got to Ashdod, people were taken off one by one. As we were processed, Israeli intelligence and all manner of different state agencies were there. There were attempts to bully, humiliate, belittle and frighten people.

We were told as we got there not to worry — that we were simply going to be deported, and that we would be reunited with our belongings after we had been processed. After we were processed, we were put into prison vans, which are cells on wheels, and nobody was taken immediately to the airport as had been promised. That was all a mind game. Everybody was taken to a new prison facility in the Negev Desert. I arrived on the night of Monday the 31st and was eventually released on the morning of Wednesday the 2nd.

LS: Why did you end up in Turkey?

KO: We, in the Viva Palestina delegation, and, I think, many others, had already decided that in this event, we would ask to go to Istanbul, because this is the area where most of the convoy had headed off from, and where we could rendezvous with friends from around the world.

In fact, all the Arabs were sent to Jordan, I think by land, and everybody else to Turkey. The Turkish civil organizations — and by that stage, the Turkish government — moved with incredible speed and determination to get absolutely everybody out and to safety. The Turkish airline sent three planes; the Turkish Red Crescent, or civil organization, sent two ambulance planes; and the Turkish military sent a third ambulance plane to Tel Aviv to get people out.

We now know that the Turkish prime minister said to the Israelis that if they were not going to release all of the prisoners, then Turkey was prepared for an escalating military confrontation.

LS: When did you begin to perceive what a political storm the assault had caused?

KO: I didn’t fully know that until Wednesday the 2nd. We were held incommunicado, of course, but I did have a visit from a man from the British consulate.

I should say that the treatment was not acceptable at all. We had nothing you could really describe as food on the first night, and the first thing we had resembling a meal was on the Tuesday afternoon, when consulate officials were visiting–which, as they said, was hardly a coincidence.

The consulate officials were treated contemptuously. I’ll give you one example: the British consulate official from Jerusalem tried to have a private conversation through a prison cell door — we weren’t allowed to meet face to face — with two British citizens. The junior prison guard refused to move. When he was asked to move, he brought two other prison guards. When the diplomat explained that under all international treaties, protocol and the law, he’s entitled to speak to his nationals privately, the junior guard said, “Go to your international tribunals, go to your law, we don’t care.”

Of course, in a sense, the prison guard was right — he was simply reflecting the experience of all Israeli officials over the course of many, many decades, which is that whatever words are uttered at the international level, there’s nothing to make those words reality.

But I heard from the British consulate official something of the scale of what had taken place. Even the new British foreign secretary, who at that point had not yet made a speech in the House of Commons, was condemning the attack and calling for an inquiry.

We’d managed to piece together among ourselves that there were, we thought, upwards of four dead. We knew that this would be a major story. As we were leaving the prison, with no real further information and being taken to the airport in coaches and prison vans, we could see Israeli police, military and civilians through the windows.

I could see the looks on their faces. I had prepared myself for a journey where we would be jeered at and laughed at from beginning to end, from Be’er Shiva to Ben-Gurion Airport. In fact, there were looks of hatred and aggressive gestures. It struck me very quickly that the only explanation for this was that in the international arena, although Israel had killed many people, it had wounded itself enormously in its standing and its strategic goals.

One thing’s for sure. This was an attempt to instill fear — to use terror to achieve a political objective. This is the dictionary definition of terrorism. Real terrorism, state terrorism, by Israel.

LS: What’s next for the movement to break the siege of Gaza?

KO: These discussions are taking place right now among the leading components of the movement, so I don’t want to say anything that preempts that. But I think that the following is common ground for everybody.

Firstly, there has never been such an event in the history of the solidarity movement with Palestine. This is the Sharpeville and the Soweto of the Palestine solidarity movement. Not, of course, the Sharpeville and the Soweto for Palestinians, themselves. They’ve experienced many such massacres–from Deir Yassin in 1948 all the way through to the attacks on Gaza in December-January of 2008 and 2009.

But for the Palestinian solidarity movement, this is the Sharpeville and Soweto, and it must be turned into such. Both of those events marked international turning points in the struggle against apartheid and the isolation of the apartheid regime in South Africa, and this strategically is what we need to work toward now. The momentum, which has come at an incredible, almost unbearable price, cost, is nevertheless against the Israelis. It’s with the Palestinians and with all those who stand with them.

This development has several strands. First, various international bodies and governments have taken strong — and in some cases, unprecedentedly strong –positions, not just over the massacre and the call for an independent, international tribunal, but also saying clearly that the siege on Gaza has to come to an end.

This has absolutely been the position of the British government — a right-wing government has come out with a position that is stronger than the position of the Labour government 18 months ago during the time of the Gaza atrocities. That’s not a product of government thinking.  It’s a product of the groundswell in Britain, and many, many other countries.

Former British MP, George Galloway, my close friend and colleague, was on a speaking tour in the U.S. designed to maximize support for the flotilla and for Palestine. He spoke in one city on Monday night as news was beginning to break in Houston, and there were 300 or 400 people there. By Tuesday night, he spoke in Dallas, and there were 1,200 people there. He describes it as the most electrifying meeting he’d ever been at, and this is someone who’s been at many meetings and many momentous events, particularly around this question.

So the tide is definitely turning. First, we have to turn all our energies into pushing every government and international body to come out with the strongest possible position, which has to include ending the siege on Gaza as an immediate step towards a wider advance for the Palestinian position.

Second, we have to appeal to the core of people who have already been active on one level or another around the Palestinian question, or those who are already convinced, to re-galvanize the movement, and go out and convince yet wider layers of people. We must argue the Palestinian case, and also push the case more generally to very wide layers of people.

In Britain, we’re saying: How great is the price to be for blanket support for Israel, and for whatever its governments choose to do? The price has now become a murderous attack on nationals from 32 difference countries, the murder of nine people, attacks and humiliation and mistreatment of British citizens in the Eastern Mediterranean in an act of piracy on the high seas — an attack on a Turkish ship with Turkish crew. People talk of alliances, and Turkey is a NATO ally.

Is this the price they have to pay?  That people who are supposed to be allies are to be murdered so that Israel is supported in anything it does? That’s a price which people in Britain are not prepared to pay.

Through this argument, we can move people progressively to a deeper understanding of what’s taking place. I genuinely believe that this is a major turning point, not just over the siege of Gaza, but over Palestine and the wider politics of the region. Everything we do needs to be carefully calibrated and strategically thought out to drive that home in the coming months.

The crackdown intensified five days after the June 16 demonstration of up to 2 million people in Tehran protesting the disputed re-election claim of President Mahmoud Ahmadinejad. Offices were shut down as large numbers of workers stayed away from their jobs.

This great outpouring recalled the 1979 revolution that toppled the Shah of Iran, the hated US-backed dictator. Many protesters revived the anti-Shah chant, “Down with the dictator.” Video and photos of the great mobilization inspired people around the world who support democracy and social justice, and set off alarm bells for despots in the Middle East. While the Iranian protests began over a stolen presidential election, their increasing size and intensity raises the possibility of revolutionary change in Iran and beyond.

Iran’s Supreme Leader Ayatollah Ali Khamenei declared during Friday prayers June 19 that there would be “bloodshed and chaos” if the protests continued. “Street challenge is not acceptable,” he declared.

The basij militias, paramilitary groups that patrol the streets for supposedly un-Islamic behavior, such as immodest dress by women, made good on Khamanei’s threats, attacking supporters of reformist presidential candidate Mir Hussein Mousavi the following day.

One killing captured on video — the shooting of 21-year-old Neda Agha Soltan on June 20 — quickly came to symbolize the human toll of the vicious crackdown. But as with previous attacks, protesters fought back, even though their numbers were smaller than previous protests.

As a university professor wrote of his decision to demonstrate that day, along with students:

“After the Supreme Leader’s fierce speech at the Friday prayers, we knew that today we would be different. We feel so vulnerable, more than ever, but at the same time are aware of our power. No matter how strong it is collectively, it will do little to protect us today. We could only take our bones and flesh to the streets and expose them to batons and bullets. Two different feelings fight inside me without mixing with one another. To live or to just be alive, that’s the question.”

He added:

Here’s a true battleground. And this time, it’s huge. Columns of smoke rise to the sky. You can hardly see the asphalt. Only bricks and stones. Here, people have the upper hand. Three lanes, the middle one separated by opaque fences, under construction for the metro.

The workers have climbed up the fences and show the V [for victory] sign. They start throwing stone and timber to the street to supply the armament. I tell myself, “Look at the poor, the ones Ahmadinejad always speaks of.” But the president’s name is no longer in fashion. This time, the slogans address the leader, something unheard of in the past three decades. It’s a beautiful sunset, with rays of light penetrating evening clouds. We feel safe among people moving back forth with the anti-riot police attacks.

That day, using batons, chains, knives and occasionally bullets, the basij injured and arrested hundreds of people. Security personnel also added to the death toll among protesters, which official reports put at 19 as of June 22.

The overwhelming security presence on the street, along with violent attacks on university dormitories and arrests of prominent opposition figures, made protest increasingly difficult the following days — police even prevented a funeral service for Neda Agha Soltan.

Despite the repression, the mass movement that took shape around Mousavi’s election campaign has already been transformed into a broader fight for democracy. It will not dissipate anytime soon, whatever the intention of the candidate and his handlers.

In Tehran, protesters unable to mount street protests have taken to literally shouting from the rooftops at night to show their continued defiance. The mass demonstrations may have subsided owing to the crackdown, but the movement has not been crushed. The movement may be regrouping, but it has not disappeared.

This pressure has pushed Mousavi, a moderate former prime minister, into the unlikely role of champion for democratic reform.

A Facebook page attributed to Mousavi stated that he is “ready for martyrdom” and called on his supporters to carry out a general strike if he is arrested. And in an open letter to supporters issued June 21, Mousavi declared that, if allowed to stand, Iran’s election fraud would validate criticisms that Islam and democracy were incompatible:

If the high volume of cheating and vote manipulation that has put a fire to the foundations of people’s trust is itself introduced as the proof and evidence of the lack of fraud, the republicanism of the regime will be slaughtered and the idea of incompatibility of Islam and republicanism would be practically proven.

Such statements reflect the enormous pressure that the mass movement has put on the reformist leader. “Poor Mousavi, we took the easel away from his hands and gave him a gun,” one supporter joked to the Financial Times, in a reference to the candidate’s turn to painting while he was out of the public eye for most of the last two decades.

Yet it is far from clear that Mousavi is willing to use the “gun” of wider mobilizations and general strikes to force a recount of the stolen election or a rerun vote, let alone thoroughgoing democratic reforms. As an establishment politician and an integral member of the Iranian ruling class, he will be extremely reluctant to call forth the semi-underground labor movement that has waged intermittent strikes and protests since 2004.

Iranian reformers — like, for example, former President Mahmoud Khatami — have always oriented to educated and upper-class liberals while pursuing economic policies detrimental to workers and the poor. As a result, Ahmadinejad was able to strike a populist pose to win the 2005 presidential elections — with the help of vote fraud to get into a runoff election, which he won handily against Ali Akbar Hashemi Rafsanjani, a powerful cleric, former president and one of the richest men in Iran.

In office, Ahmadinejad was anything but a friend to the working class. He pursued policies of privatization to enrich his coterie around the national security apparatus and ruthlessly suppressed efforts at organizing independent unions. He tried to maintain popularity through a nationalist stance, defending Iran’s nuclear energy program against pressure from the West.

And in the run-up to the June 12 vote, Ahmadinejad made much-publicized handouts to the poor and bonuses for government employees to boost turnout for the election. He apparently assumed that middle-class liberals, disillusioned by Khatami’s failure to stand up to attacks on pro-democracy activists, would stay home, as they had in 2005.

By 2009, Ahmadinejad faced a challenge from both Mousavi and Rafsanjani. These former rivals (Rafsanjani had ousted Mousavi by abolishing the post of prime minister in 1989) made common cause to stop Ahmadinejad from consolidating power.

The Iranian president, with the backing of Khamenei, had systematically installed figures from the basij and the Iranian Revolutionary Guard Corps (IRGC) into key positions in government and the national oil company, displacing or squeezing the big capitalists around Rafsanjani, who jealously guard that turf. Beyond personnel questions, however, Iranian capitalists are leery of Ahmadinejad’s half-baked “development” projects that used state oil revenues to consolidate his base among the poor, rather than spending the money on strategic investments.

For his part, Mousavi was seen as an ideal candidate for the power brokers around Rafsanjani as well as the reformists. Having stressed the social justice side of Islam while prime minister during the Iran-Iraq war, he can appeal to workers and the poor in a way that Rafsanjani never could. He also has credentials as a hard-liner: as prime minister, he presided over the execution of as many as 5,000 political prisoners.

Nowadays, though, Mousavi portrays himself as a liberal by championing the rights of women and national minorities, an effort that helped revived an interest in politics among Khatami’s voters.

Mousavi’s support, which surged into the streets of Tehran and other cities in the days before the election, forced Ahmadinejad to resort to massive vote fraud to claim victory.

According to a study by the British think tank Chatham House, the number of votes cast in the provinces of Mazandaran and Yazd exceeds the total number of eligible voters. The authors estimate that if Ahmadinejad really won 62 percent of the vote claimed by the authorities, he would have had to won the votes of all new voters, all the votes of his last centrist rival, plus 44 percent of those who voted for reformist candidates in 2005. This is so unlikely as to be absurd.

As the speaker of Iran’s parliament, Ali Larijani, said on television June 20, “A majority of people are of the opinion that the actual election results are different from what was officially announced,” adding, “Although the Guardian Council is made up of religious individuals, I wish certain members would not side with a certain presidential candidate.”

As popular pressure mounted, the head of the 12-member Guardian Council, the body of clerics that approves election candidates, issued a surprising report June 22 that votes supposedly cast in more than 50 Iranian cities were actually higher than the number of eligible voters.

The Guardian Council’s announcement contradicts the earlier claim by Khamenei that Ahmadinejad had won a “definitive victory,” and marks a retreat from the council’s earlier position that it would only review 10 percent of the ballots.

Now there are even doubts that the council will uphold the election results when it makes its final ruling in the coming days. This vacillation partly reflects the influence of Rafsanjani, one of the most powerful members of the Guardian Council. But if the council reverses course and annuls the election or orders a recall, it will be because the clerics fear a revolutionary upsurge. Having hijacked a workers’ revolution to take power 30 years ago, the clerics understand full well the risks they face.

At the same time, Rafsanjani is rumored to be trying to assemble an emergency meeting of the 86-member Council of Experts, which chooses Iran’s supreme leader. The apparent aim is to remove Khamenei from power, which would decisively weaken Ahmadinejad as well.

Adding fuel to the fire is Grand Ayatollah Hussein Ali Montazeri, the country’s senior cleric, who endorsed protests to “claim rights.” According to religious criteria, Montazeri should have been the successor to Ayatollah Ruhollah Khomeini, the founding leader of the Islamic Republic in 1979, but was shoved aside and later placed under house arrest for several years.

In short, the competing factions of the Iranian ruling class are hesitating before they make irrevocable choices that could shatter the Islamist regime.

For Ahmadinejad and Khamenei, the question is whether a crackdown would succeed in drowning resistance in blood, or provoke a wider revolutionary challenge to their rule. For Mousavi and Rafsanjani, the choice is whether to accept a humiliating deal that would greatly diminish their power, or encourage the rebellion, and try to ride it to victory.

Meanwhile, the potential for far broader struggle for democracy is apparent. The Tehran bus drivers’ union, which has fought to improve wages and conditions, despite the beatings and arrests of union leaders, issued this statement June 20:

The fact that the demands of the vast majority of Iranian society go far beyond those of unions is obvious to all, and in the previous years, we have emphasized that until the principle of the freedom to organize and to elect is not materialized, any talk of social freedom and labor union rights will be a farce.

Given these facts, the Autobus Workers Union places itself alongside all those who are offering themselves in the struggle to build a free and independent civic society. The union condemns any kind of suppression and threats.

To recognize labor union and social rights in Iran, the international labor organizations have declared the Fifth of Tir (June 26) the international day of support for imprisoned Iranian workers as well as for the institution of unions in Iran. We want that this day be viewed as more than a day for the demands of labor unions to make it a day for human rights in Iran and to ask all our fellow workers to struggle for the trampled rights of the majority of the people of Iran.

With hope for the spread of justice and freedom,
Autobus Workers Union

It’s impossible to predict the next turn of events in Iran. But what is clear is that the struggles of the Iranian working class — not the maneuvers at the top of society — are the key to taking the movement forward.

GM was once the quintessential industrial powerhouse, synonymous with the dominance of U.S. capitalism worldwide. Now GM is a symbol of the decline of U.S. capitalism.

From AIG to GM, American capitalists’ short-term obsession with profits and their religious faith in the free market contributed mightily to an epic collapse. Even before the auto industry’s crash, the current recession had already shattered the lives of millions of working people in the U.S.

For the last 30 years, workers have been forced to compensate for stagnant or falling wages with ever-increasing amounts of debt. The financial meltdown and the housing bust put an end to that, wiping out tens of billions of dollars in household wealth. Now comes rising unemployment, reductions in wages and benefits, and deep cuts in public spending on education and health care. The bankruptcy of GM — and Chrysler before it — will only accelerate those trends.

But none of that bothers right-wingers in Congress or conservative commentators. To them, the deal that gives the federal government 60 percent control over GM is further evidence of President Barack Obama’s “socialism.”

“What we’ve done…it’s the road toward socialism, government intervention in the market in a big way,” said Sen. Richard Shelby (R-Ala.). “I’m sure they haven’t cut enough, and there aren’t enough concessions there.” Shelby, of course, was all for handing out government money when the state of Alabama gave $530 million in tax breaks to BMW, Honda and Toyota to get those automakers to build factories in his state — all non-union, of course.

The Wall Street Journal editorial page sounded a similar theme. “The new agreement simplifies some work rules and job descriptions but makes no reductions in hourly pay, pensions or health care for active workers,” the Journal complained. It was forgetting that the United Auto Workers (UAW) agreed to forgive a $20 billion debt that GM owes the union for a retiree health care fund. Instead, the UAW health care trust fund will get 17.5 percent of company stock — which is highly unlikely to ever be worth enough to pay for retirees’ health care.

At Chrysler, the UAW health care trust fund will get 55 percent of company stock under the takeover by Fiat — but that’s even more likely to force cuts in retiree health care. And at both Chrysler and GM, the UAW gave up the right to strike until 2015 — and contract negations will apparently be replaced by arbitration.

So despite the complaints of right-wing blowhards, it’s autoworkers, their families and communities who are getting screwed. With 14 GM plants set to close, the company’s UAW workforce will be downsized from 64,000 today to just 40,000 — compared to 450,000 in the late 1970s.

And as better-paid autoworkers retire, most will be replaced with new hires earning just about half the current top wage of about $28 per hour, thanks to a contract concession made several years ago.

That means that the UAW, once the pacesetter in winning improvements in wages and conditions for U.S. workers, is now collaborating with Corporate America in its race to the bottom. As Labor Notes’ Jane Slaughter put it, “From now on, working for the auto companies will be just another bust-your-hump factory job.”

The impact of GM’s collapse — and that of Chrysler before it — marks the convergence of three crises: the worst recession since the 1930s; the resulting acceleration of a long-term decline of decently paid, unionized manufacturing jobs; and the rollback of what little exists of a welfare state in the U.S.

Under these conditions, the impact of the auto crisis will radiate throughout the economy — not only in its direct effects on related industries like auto parts and steel, but in setting an example for employers who are determined to cut wages and benefits.

Of course, even in its heyday, GM was never the utopia for autoworkers that right-wingers imagine. The company was notorious for the brutal pace of its assembly lines, its militaristic discipline and constant attempts to undermine union power in the workplace. If the company set the standards for blue-collar wages and benefits, it’s only because the union was powerful enough to fight for them and win.

Over the last 30 years, however, the UAW has been unwilling or unable to resist continuous cuts in jobs. Hourly pay was effectively limited to increases in the rate of inflation. And now, as the Obama administration triumphantly proclaims, “the concessions that the UAW agreed to are more aggressive than what the Bush administration originally demanded in its loan agreement with GM.”

But none of this is good enough for anti-union forces, which never forgave the UAW for its radical beginnings in the 1930s that included illegal factory occupations and clashes with police and the National Guard.

While media commentators may complain about GM’s terrible management and disastrous investment decisions, they concentrate their fire on “overpaid” autoworkers for causing the company’s problems–even though labor costs account for less than 10 percent of GM vehicles’ costs.

The auto crisis should be an opportunity to forge ahead in new directions for the U.S. economy — to meet goals the Obama administration claims it supports, like creating jobs and supporting green industries.

But as former labor secretary Robert Reich pointed on the public radio program Marketplace, the government isn’t spending $50 billion to save jobs, since the Obama administration’s plans call for the elimination of 21,000 positions at GM. The only logic to the government intervention, Reich argued, is to soften the economic blows from GM’s unraveling:

But if the purpose is to help the Midwest adapt to industrial decline, investing that much money in GM seems an inefficient way to accomplish it. Wouldn’t it be better to use the money to convert GM and other declining manufacturing companies into producing what America needs, such as light rail systems and new energy efficient materials, and training laid-off autoworkers for the technician jobs of the future?

Filmmaker Michael Moore made a similar argument, calling for the conversion of GM factories to social needs, modeled on the changeover from car manufacturing to military production during the Second World War:

President Obama, now that he has taken control of GM, needs to convert the factories to new and needed uses immediately: Don’t put another $30 billion into the coffers of GM to build cars. Instead, use that money to keep the current workforce–and most of those who have been laid off–employed so that they can build the new modes of 21st century transportation. Let them start the conversion work now.

Instead, the Obama administration is using bankruptcy as a means to beat down the UAW and lure private capital into taking over a profitable “new GM” that’s rid of its debt and unwanted assets. “The [administration's] GM/auto task force plan for bankruptcy and restructuring — shaped by a secretive, unaccountable group of Wall Street expats without expertise in the industry — seems designed above all to perpetuate GM as a corporate entity,” wrote left-wing journalist Robert Weissman.

The GM and Chrysler bankruptcy proceedings fit perfectly with Obama’s banker-friendly economic policy: a thinly disguised state capitalism in which the government bails out and props up failed companies, but hides behind private managers in order to dodge political responsibility for everything from rising home foreclosures and the bankers’ outrageous executive pay to auto factory closures.

The collapse of GM is a signal moment in the history of U.S. capitalism. A stronger and more militant labor movement could seize the opportunity to call for new economic priorities that not only maintain good-paying manufacturing jobs, but create millions more of them.

Instead, the bankers and their enablers in the Obama administration are calling the shots. That means the autoworkers and other workers will keep paying the price for this crisis — until they’re organized enough to fight back.

The workers, members of the Workers United union, are demanding that Wells Fargo agree to finance efforts to maintain production and 3,600 jobs, either with current management or a new owner. They argue that the bank, which received $25 billion in government funds as part of last year’s rescue of Wall Street, should be obligated to support workers whose taxes are being used to fund the bailout.

“We’ll stand up and take whatever action is necessary,” said Joe Costigan, a Workers United official. “We’re going to draw a line in the sand and fight back.”

The situation at Hartmarx parallels that of Republic Windows & Doors, a Chicago factory where workers’ six-day occupation in December forced Bank of America to pay $1.35 million to settle the company’s severance package obligations to workers–along with another $400,000 from JPMorgan Chase.

The Republic struggle became a rallying point for labor in the U.S. and internationally, as BoA’s initial refusal to pay up symbolized the double standards of George W. Bush’s bank bailout–Bank of America had gotten $25 billion in taxpayer money as well.

The Republic struggle was led by the independent United Electrical, Radio and Machine Workers of America, a small union with 35,000 members.

By contrast, the Hartmarx workers have labor’s big guns on their side at the outset. Their union, Workers United, a breakaway group from the UNITE HERE union, is affiliated with the Service Employees International Union (SEIU), which represents more than 2 million workers.

SEIU and Workers United are expected to announce a national toll-free number for workers to call when their companies are facing similar situations. Since the big banks that are typically creditors of bankrupt companies have received government funds, they should be compelled to use that money to save jobs, union officials argue.

Illinois politicians are backing the workers, too. State Treasurer Alexi Giannoulias threatened to withdraw $8 billion in state funds from Wells Fargo. And Rep. Phil Hare (D-Ill.), a former worker at the company’s plant in Rock Island, Ill., threatened to become Wells Fargo’s “worst nightmare” if the bank forces a liquidation of the plant.

The workers also have major political support from top Democrats in Washington, including New York Sen. Charles Schumer, a longtime Wall Street ally, and Massachusetts Rep. Barney Frank, chair of the House Financial Services Committee.

So far, though, Wells Fargo hasn’t blinked, demanding that Hartmarx repay $114 million, or be liquidated to raise money to cover the debt:

Despite extensive marketing, Hartmarx has no credible offers to be acquired, but the bank group continues to work with Hartmarx to find potential buyers. Financial institutions must lend prudently, consistent with safety and soundness principles. Advancing more funds with no reasonable likelihood of being repaid is not consistent with sound banking.

The 122-year-old company has been unionized since 1910. It’s Hart Schaffner & Marx and Hickey Freeman suits are iconic brand names, and the company made President Barack Obama’s tuxedo and topcoat for his inauguration.

For Hartmarx workers, the stakes couldn’t be higher. Overwhelmingly immigrants–from China, Poland, Mexico, Italy and many other countries–the workers average about $12 per hour. It’s not high pay, but given the recession, it would be extremely difficult for workers to find other jobs at such wages–if they could find a job at all.

“Everyone at the plant is worried about their future,” Ruby Simms, a 32-year veteran at the Des Plaines factory, said in a statement issued by the union. “It all hinges on Wells Fargo. They have to do the right thing and allow this company to be reorganized–so jobs can be saved.”

“Everybody feels great,” said a tired but beaming Armando Robles, president of United Electrical, Radio and Machine Workers (UE) Local 1110.

Melvin Maclin, the local’s vice president, agreed. “I feel wonderful,” he said. “I feel validated as a human being. Everybody is so overjoyed. This is significant because it shows workers everywhere that we do have a voice in this economy. Because we’re the backbone of this country. It’s not the CEOs. It’s the working people.”

Pointing, he continued, “See that sign up there? Without us, it would just say ‘Republic,’ because we make the windows and doors. This shows that you can fight–and that you have to fight.”

The settlement was a resounding victory for union members who were told a little more than a week earlier that the factory would be closed in less than three day’s time–and that, contrary to federal law, they would get no severance pay.

So to pressure the company to make good on what it owed them, the workers voted to stay put after the plant ceased production on December 5.

By deciding to occupy their factory–a tactic used by labor in the 1930s, but virtually unknown in this country since–the Republic workers sparked a solidarity movement that forced one of the biggest banks in the U.S. to pay two months of wages and health care, even though the bank had no legal obligation to do so.

What began as a resolute act of some 250 workers quickly became a national symbol of working-class resistance in a crisis-bound economy. Hundreds upon hundreds of union members and officials–not only from Chicago, but around the Midwest–came to the Republic factory to express their solidarity and bring donations of food and badly needed funds.

But support for the Republic struggle went beyond the ranks of organized labor. The fightback crystallized mass anger about the $700 billion bailout of Wall Street. Even though Bank of America–Republic’s main creditor–is in line receive $25 billion in taxpayer money, the bank refused to finance the 60 days’ pay due to workers under the WARN Act if a plant closes without the two-month notice required under the law.

Democratic politicians, from President-elect Barack Obama down to Chicago aldermen, felt the pressure to declare their support for the struggle.

Press coverage was affected as well. For once, the media not only highlighted the issues in a labor struggle, but also used its resources to investigate the employer. The Chicago Tribune reported that Republic’s main owner, Rich Gillman, was involved in the purchase of a nonunion window factory in Iowa to move to. Journalists also uncovered evidence that Bank of America refused repeated requests to extend more credit to Republic, despite its infusion of bailout money.

Thus, when UE decided to make Bank of America the target of a December 10 rally, there was a ready response–about 1,000 people turned out on short notice.

“Since we’re down here in the financial district, let’s do a little mathematics,” said Rev. Gregory Livingston of Rainbow/PUSH. “Bank of America got $25 billion. Citibank got $25 billion. Republic workers got how much? Zero.

“That’s why we’re here in the financial district. It’s where the money is. The people work, and guess whose money is in these banks? Guess whose money is in the market? Guess whose money is in their pockets? It’s our money.”

But what was noteworthy about the picket wasn’t the anger against the banks, but a palpable sense of workers’ power. Members of a dozen different unions were on hand, as were student groups, socialists and community groups, all inspired by the Republic workers’ bold stand.

Larry Spivack, regional director of AFSCME Council 31, summed up the mood in his speech. “Look around you,” he told the crowd, naming the main financial institutions nearby. “Who created all their wealth?” he asked–and was answered by the chant, “We did!” “Who has the power?” “We do!”

Spivack continued: “This is a beginning, like when the Haymarket struggle took place in 1886,” a reference to the Chicago martyrs in the struggle for the eight-hour workday. He concluded with a shout, “Power to the workers!”

A few hours later, back at the Republic plant, after workers heard the terms of the agreement and voted, Bob Kingsley, the national director of organization for UE, made a similar point in assessing the victory:

The significance of this struggle for the labor movement is that at a time when millions of American workers are facing greater and greater economic turmoil, and with it more and more instances of unfairness, there needed to be a clear symbol of resistance.

What the workers at Republic are is the face of that resistance. They personify the challenge that the working class faces in today’s economy, but they also symbolize the hope that if we, as workers, stick together, if we fight together, and if we’re willing to push the limits, we can achieve incredible things. And their victory comes at a time when the labor movement needs it.

Grassroots activists, rank-and-file union members, labor leaders, members of Congress and Rev. Jesse Jackson have all come to Republic Windows & Doors factory just north and west of the city’s downtown to show their support for the overwhelmingly Latino workforce.

In a matter of a few days, news of this fight has spread far and wide–even gaining the attention of President-elect Barack Obama, who declared that the workers’ struggle was just.

The occupation of the Republic factory began December 5 when workers on the afternoon shift voted to stay in the plant rather than accept a shutdown on just three days’ notice–and without the vacation pay or severance money mandated under federal and state law.

The workers, members of the United Electrical, Radio and Machine Workers of America (UE) Local 1110, were prepared to be arrested to make a statement about the Republic owners’ violation of the law–and about the refusal of the company’s main creditor, Bank of America (BoA), either to extend credit to the company to keep it operating or to make good on management’s obligations to workers.

Republic workers are angry that BoA received $25 billion from the U.S. government as part of the Wall Street bailout–taxpayer money handed over to banks specifically to stimulate lending. Instead, the bank’s Chicago managers were sitting on the money while Republic prepared to toss workers into the street and cut off their health insurance.

As a result, workers said, the decision to occupy was an easy one–whatever the consequences. Suddenly, an American factory occupation–something usually relegated to dusty labor history books about the 1930s and nostalgic speeches at union conventions–was a reality.

If Republic’s owners considered calling the cops to evict the workers, they perhaps thought the better of it given their own obvious violation of the law.

Within a few hours, said UE International Representative Mark Meinster, the company reached an “understanding” with the union: Workers would keep the plant clean and safe, and a handful of company security guards would stay away from the cafeteria where the workers have set themselves up.

Workers have another very practical reason for guarding the plant–to make sure that management would no longer be able to move out critical equipment. In recent weeks, important and expensive gear had disappeared–including brand new presses that showed up on the loading dock one day, but were never installed.

“They said we were cross-docking,” said Local 1110 Vice President Melvin Maclin, referring to the practice of taking delivery of items and shipping it out the same day. “In more than 20 years, they’ve never cross-docked.” Maclin and other workers suspect that the owners are either selling off equipment or preparing to restart production in a separate, nonunion company–a practice perfected in the trucking industry in the late 1980s and adopted by other employers since.

Republic workers were determined it would not happen this time–not without a fight.

Hours into the occupation on Friday evening, local labor and immigrant rights activists began turning up at the plant’s entrance with bags of takeout fried chicken, coffee and soda. Others who rushed over without stopping for food dug into their wallets instead, handing cash to union organizers to get more supplies. Meanwhile, more than a half-dozen TV news vans crowded the street outside as reporters prepared to do live broadcasts.

E-mail alerts, text messages and reports from the mainstream and independent media circulated around Chicago to promote a vigil to be held at Noon the next day. At the appointed hour, there were more than 300 union members and supporters on hand, as prayers gave way to an exuberant solidarity rally and fundraiser.

Rev. C.J. Hawking of the Chicago-based Interfaith Worker Justice committee led prayers–and revved up the crowd with her fiery pro-worker message. Several Republic workers spoke, explaining to the crowd why they decided to draw the line.

U.S. Rep. Luis Gutierrez, who had tried to broker a meeting between Republic management, BoA and the union–the owners didn’t show–was the featured speaker.

“Somebody said to me, ‘Those windows don’t belong to them. What do you mean they’re staying with them?’” Gutierrez told the crowd. “It seems to me that it was [the workers'] labor that put together those windows. It was their creativity, it was their work, their commitment to quality that made this company successful…Those windows belong to the workers until they are paid for.”

Veterans of other labor struggles spoke–such as Rich Berg, president of Teamsters Local 743, who took office earlier this year after a long fight for democracy in a union notorious for corruption. Other speakers included James Thindwa, executive director of Chicago Jobs with Justice, and Jesse Sharkey, a delegate in the Chicago Teachers Union and member of the Caucus of Rank-and-File Educators (CORE), a union reform group. UE Western Region President Carl Rosen closed out the rally.

By that afternoon, the Republic occupation was international news. The mainstream media, usually clueless where labor issues are concerned, got the essentials across: BoA has $25 billion of taxpayer money but it wants to cut off credit to a viable company and toss more than 250 workers on the streets.

Sunday morning saw Jesse Jackson bring 200 turkeys to workers as UE staff set up a food distribution system. “These workers deserve their wages, deserve fair notice, deserve health security,” Jackson said at a press conference. “This may be the beginning of [a] long struggle of worker resistance, finally.” U.S. Rep. Jan Schakowsky also arrived to tour the plant and pledge her support.

Barack Obama felt compelled to address the Republic struggle at his own press conference. “The workers who are asking for the benefits and payments that they have earned,” Obama said. “I think they’re absolutely right, and understand that what’s happening to them is reflective of what’s happening across this economy.”

While the political figures have dominated the media’s attention, the crowded foyer of the plant has become a rolling solidarity meeting involving union members, social movement activists and students.

On Sunday, a young Chicago bus driver and union activist was there to show support–and make activists aware of the Chicago Transit Authority’s attempts to eliminate mechanics’ jobs.

Rich De Vries, business agent for Teamsters Local 705, visited the plant, as did Gerald Colby, president of the National Writers Union, who came as part of a delegation from the U.S. Labor Against the War national leadership meeting, held just outside Chicago over the weekend. “This struggle shows that working people are not going to be pushed around–that they are going to stand up for their rights–and that they have rights at the point of production,” Colby said.

James Thindwa of Jobs with Justice made a similar point. “This is the end of an era in which corporate greed is the rule,” he said. “This is the start of something new.”

And if the government does step in to rescue General Motors, Chrysler and Ford — a move backed by top congressional Democrats — it will raise pressure on Obama to offer government aid to more big companies threatened with bankruptcy and underwrite the restructuring of entire industries.

Already, Rahm Emanuel, Obama’s pick to be his chief of staff, has joined Senate Majority Leader Henry Reid and House Speaker Nancy Pelosi in calling for government aid to the auto industry.

But if the companies get government loans or other assistance, what happens to workers’ jobs, pay and benefits? Will, for example, the government finance a proposed merger of GM and Chrysler that could eliminate 40,000 jobs? Will the U.S. Treasury put up the $58 billion that the companies must pay the UAW to support a trust fund for retiree health care?

Those questions loomed in the background as the Big Three automakers reported their worst monthly sales figures in years and huge losses. GM executives said that the company has $16.2 billion in the bank, but it expects to spend money for daily operations at a pace of about $2 billion a month. The company could run out of money by the end of next year.

CEO Rick Wagoner said that GM can’t file for bankruptcy to get protection from creditors, since consumers are unlikely to buy cars from a bankrupt company. If the company were to go out of business altogether, it would send a wave of job losses through manufacturing and car dealerships that could eliminate 2.5 million jobs and wipe out $125 billion in personal income in just one year, according to the Center for Automotive Research, a think tank with close ties to GM.

“Letting GM go is a terrible idea,” Wagoner said on CNBC. “Look at the effect of Lehman Brothers.”

By invoking the September collapse of Wall Street giant Lehman Brothers, which led to a worldwide financial plunge,Wagoner is trying to maximize pressure on the government to fork over billions to GM.

He’s following the example of U.S. Treasury Secretary Henry Paulson, who declared that the world economy would collapse if Congress didn’t approve his $700 bailout for the Wall Street banks — and give him dictatorial control over how the money was spent. Wagoner wants the same flexibility — the ability to use a $25 billion Department of Energy loan for fuel-efficient cars to shore up losses, as well as access to the Wall Street bailout funds.

Even if the threat of a collapse of GM is real, Wagoner, like the bankers, is angling to use the money to cover up for his disastrous management of the company and carry through a restructuring at workers’ expense.

GM, Chrysler and Ford kept pushing SUVs and pickup trucks that were profitable in the 1990s and resisted pressure for higher standards on fuel efficiency. As a result, the companies are still hemorrhaging money even after eliminating an estimated 100,000 jobs since 2006 and extracting tens of billions more in concessions from the UAW.

Free-market ideologues use the auto company’s mismanagement to argue that they should be allowed to fail or radically downsize, as the steel industry did in the 1980s. But a U.S. government of any political stripe is unlikely to allow this to happen, given the disproportionately large economic impact of the auto industry.

To be sure, the domestic automobile industry is no longer synonymous with great-power military status as it was in the 1930s and 1940s, when car assembly lines were retooled to make tanks and bombers in the Second World War.

Nevertheless, the world’s dominant economic and military power must maintain an industrial base, despite the pressures on individual companies to outsource or invest in cheaper labor markets overseas. For U.S. industry, the contradictions of globalization are coming to a head.

For Obama, the pressure to shore up the auto industry and manufacturing generally will be especially acute. Having promised aggressive policies to overcome the economic crisis and create jobs, it will be politically difficult for the new administration to sign off on a government rescue that includes the elimination of some of the best-paying blue-collar jobs in the country.

Limiting compensation for already-wealthy CEOs, as is the case in the bank bailout, may be a good political symbolism, but it won’t halt, let alone reverse, the unraveling of the industry.

The issue is — or should become — what kind of auto industry bailout will take place. If the government is going to put up billions, why should a discredited and bloated management remain in place? Call the intervention what it is — nationalization. Throw out the management and use their compensation for investment — and put workers’ committees in control of production.

Then there’s the question of jobs. In the last UAW contract, the union agreed to allow the Big Three auto companies to hire new workers at about $14 per hour — about half the rate of current workers. One condition of a government loan should be payment of industry-standard wages. (Prompt passage of the proposed Employee Free Choice Act would spur the unionization of the nonunion, foreign-owned auto plants located mainly in the South, and take wages and benefits out of competition in the U.S. auto industry).

Certainly, the Obama government should insist on a moratorium on layoffs and guarantees of job security. It’s nonsensical — not to say outrageous — to suppose, given the skyrocketing unemployment rate, that the government should finance Corporate America’s elimination of any more jobs.

Won’t keeping jobs protected and factories open add to the capacity glut in the auto industry–the capability to produce more cars than consumers will buy?

Not if the investment is directed toward development of new, energy-efficient vehicles and mass transit. If tens of billions of taxpayer dollars are going into the Big Three, taxpayers should have the right to stipulate that production be carried out according to social needs.

Another major issue in a government intervention in the auto industry is workers’ health care and retirement costs.

The Big Three provide health care to about 2 million people, as well as pensions for 775,000 retirees or their survivors. And the Voluntary Employee Beneficiary Association (VEBA) trust funds worth $58 billion being set up by the companies will be underfunded at the outset, thanks to concessions made by UAW leaders, who are to control the trusts.

This problem, though, is best handled at a higher level: A government national health care program modeled on Medicare would eliminate the problem altogether.

If these demands seem far-fetched, it’s useful to think back on the scale of the economic crisis and the speed at which it spread. After all, it was Henry Paulson — a former Wall Street CEO and free-market Republican — who carried out the nationalizations of Fannie Mae, Freddie Mac and AIG.

It’s time for organized labor and the left to raise the stakes, especially when the incoming president has been elected on a promise to make the economy benefit working people.

“Democratic presidential nominee Barack Obama spoke to many in the Congressional Black Caucus and helped persuade 13 to switch their votes,” the Associated Press reported, describing Obama’s efforts to salvage the Bush administration plan to use government funds to bail out Wall Street by buying up bad debts from banks and other firms. “Nine freshmen Democrats also switched to yes votes after a conference call with Obama in which he promised an economic stimulus bill would be a top priority if he is elected.”

In other words, Obama was personally responsible for swinging the votes needed to reverse the House of Representatives’ initial rejection of the bailout at the end of September.

Ultimately, dozens more House Democrats and Republicans also switched their votes after coming under enormous pressure from virtually every business lobbying group. But it was Obama who provided the political cover for Democrats to brave the backlash of voters who are furious about this gigantic transfer of wealth from the working class to the rich.

The passage of the bailout bill has once again laid bare the pathetic realities in the “world’s greatest democracy.” There was no question what the fate of the legislation would have been if there had been a referendum of the U.S. population. But the politicians in Washington were responding to the sentiment among those they really represent–in the boardrooms of Wall Street and Corporate America–not the ordinary people who put them in office.

On the campaign trail, Obama played to the anger over the bailout, even as he justified it as necessary.

“We are now in a very dangerous situation where financial institutions across this country are afraid to lend money,” he said at a campaign stop in Nevada. “If all that meant was the failure of a few big banks on Wall Street, that’d be one thing, but that’s not what it means. What it means is that if we do not act, it will be harder for you to get a mortgage for your home, or the loans you need to go to college, or a loan you need to buy a car to get to work.”

“There will be time to punish those who set this fire,” he added, “but now is the moment for us to come together and put the fire out.”

Certainly the 777-point drop in the stock market after the first House vote on September 29 also created political pressure for a “yes” on the bailout. It seemed to give credence to dire warnings by Treasury Secretary Henry Paulson, Federal Reserve Chair Ben Bernanke and George W. Bush (remember him?). The message: Give Paulson dictatorial authority to spend $700 billion virtually any way he wants, or, as Bush put it, “this sucker could go down.”

The problem with that argument is that the bailout may do little to stop “this sucker” from going down anyway. In fact, as this editorial was being written, world stock markets suffered through another day of huge losses on October 6, as a result of a banking crisis in Europe and skepticism among U.S. business that even a $700 bailout can solve the credit crunch that is slowing the economy to a crawl.

A more direct government intervention in the crisis–including nationalizing the banks–would have a much greater chance of alleviating the credit squeeze. And any bailout plan aimed at helping working people would have included a moratorium on home foreclosures and a program to allow homeowners to renegotiate their adjustable-rate mortgages based on today’s lower home values.

If Obama was sincerely campaigning on a promise of “change,” he would have used his clout to push for measures like these. Instead, he promoted the Senate version of the bailout bill, which, though packed with tax cuts for business to win Republican support, will do nothing to help homeowners and the great majority of workers. (The only progressive part of the bill was unrelated to housing–a measure to require health insurance companies to cover mental and physical health care equally.)

Politically, though, Obama knows he’ll come out a winner, no matter what. That’s because Republican presidential candidate John McCain’s inept attempts to intervene in the crisis only reminded people that corrupt and incompetent Republicans presided over this descent into the worst financial crisis since the Great Depression. However much McCain and running mate Sarah Palin try to posture as being independent of Bush, they’re inevitably catching blame for this debacle.

As a result, Obama can have his cake and eat it, too. He can slam McCain for declaring that the “fundamentals” of the economy are strong, even as he positions himself as the “responsible” candidate who will tend to the interests of capital.

However populist Obama may sound in the closing weeks of the campaign, Corporate America will be reassured by the economic advisers on his flank: billionaire investor Warren Buffet, the richest man in the U.S.; former Fed Chair Paul Volker, whose high-interest rate policies drove up unemployment in the early 1980s; and Robert Rubin, the Wall Street executive who, as Treasury Secretary under Bill Clinton, imposed the bankers’ priority of slashing government spending.

With advisers like these, you can be sure that when Obama’s promises to voters conflict with the business agenda, voters will get the shaft.

If you listen closely, you can hear Obama signal as much. “People have asked whether the size of this rescue plan, together with the weakening economy, means that the next president will have to scale back his agenda,” Obama said. “The answer is yes and no. With less money flowing into the treasury, some useful programs, and programs that I have proposed on the campaign trail, will have to be delayed. But there are some certain investments in our future that we cannot delay precisely because our economy is in turmoil.”

One “investment” that won’t be delayed is the further growth of the Pentagon budget, already bloated by wars in Iraq and Afghanistan and spending on outlandish new weapons systems. Richard Danzig, who was Navy secretary under Clinton and a possible defense secretary in an Obama administration, told the Wall Street Journal that he doesn’t “see defense spending declining in the first years of an Obama administration. There are a set of demands there that are very severe, very important to our national well-being.”

While the Pentagon can expect the money to keep flowing, Obama is promising hard-pressed workers a modest tax cut that won’t undo the impact of high food and fuel prices and declining real (after inflation) wages.

And Obama’s proposed $50 billion economic stimulus package is two-thirds smaller than the Bush stimulus program implemented earlier this year. Compared to the bailout of the bankers, that’s chump change.

The economy issue is almost certainly burying whatever hope McCain-Palin had of eking out a victory–always a long shot for them anyway on the heels of the most discredited Republican administration since Herbert Hoover in the 1930s.

But anyone who expects an Obama administration will seriously challenge Corporate America and its priorities ought to take a closer look.

But for working people trying to figure out what the hell has happened to the U.S. financial system — and why the leaders of the U.S. government, apparently regardless of political party, are prepared to spend more than $2,000 for every man, woman and child in this country to save Wall Street — the reaction was different.

For one thing, there was sweet satisfaction to be taken in the fact that the bankers and stockbrokers didn’t get their way for once, especially since they’re out to steal $700 billion in taxpayers’ money to cover their bad investments, under a program devised by former Wall Street CEO and now Treasury Secretary Henry Paulson.

With the business world ratcheting up political pressure and Paulson predicting certain doom if no action was taken, the Bush administration and the leadership of both parties in both the House and Senate were all sure that the bailout bill would go through. Yet the legislation was derailed because members of Congress are feeling the heat from a growing popular outrage over the staggering scale of a giveaway to the very same people who led the economy to the edge of the abyss.

It was an all-too-rare turn of events for the U.S. political system, the opinions of ordinary Americans actually mattered in what happened.

At the same time, though, there’s a sense of foreboding. If the government can’t agree on a bailout, will Wall Street really crash and burn and cause an economic catastrophe on Main Street, too?

After all, that’s the claim of “King Henry” Paulson and his nominal boss, George W. Bush. They’re basically extortionists, insisting that if Congress doesn’t agree to a king’s ransom for the banks, the economy gets it – -in the form of a worldwide financial meltdown that would wipe out workers’ savings and eliminate millions of jobs overnight.

The stock market plunge that followed the House vote Monday will have reinforced such fears. Few workers have the resources to play the stock market, of course, but their lives are affected by its ups and downs, especially the downs: for example, the loss of retirement savings in 401(k) accounts that many workers rely on, now that defined benefit pension plans are going the way of the dinosaur.

So is it true? Are we all, the multi-millionaire bankers on Wall Street and the tens of millions of workers on every other street, in the same boat after all? Do we really need the Paulson bailout to avert a second Great Depression?

The answer is no.

The argument that a bailout of the banks is good of all us is an ideological smokescreen, to cover the specifics of the Paulson proposal, as sanctioned by the Democrats — which benefits the rich and powerful, at the expense of the rest of us.

There are plenty of ways that government intervention could alleviate the financial crisis and provide urgently needed relief to working people. But that would involve programs, policies and priorities that the bankers despise and that political leaders in Washington want nothing to do with.

Paulson is right to say that Wall Street is facing its most severe crisis since the Great Depression — a catastrophe entirely of its own making — and that the U.S. government has to respond. But the form that response takes — a huge handout for the super-rich or a progressive plan to rein in the banks and help ordinary people — depends on whether workers organize to make their voices heard and felt in Washington.

Democrats like House Speaker Nancy Pelosi and Rep. Barney Frank say they drove a hard bargain and forced concessions from the Bush administration on the Wall Street rescue.

But the provisions they point to, a toothless section that urges banks, “where appropriate,” to negotiate with homeowners faced with foreclosure, as well as easily avoided restrictions on executive pay at rescued companies, are window-dressing at best.

The heart of the plan proposed by Paulson remains in place — a naked power grab of the bankers, by the bankers and for the bankers. This is the scheme that allows Paulson and future treasury secretaries to buy the worthless securities and “troubled assets” of banks and other financial institutions, and not at their current value, if they’re worth anything at all, but at or near the original inflated price the banks paid for them.

In other words, Paulson wants unrestricted power to cover the losses of the world’s most reckless gamblers. All the scare tactics in the world can’t disguise that.

Normally, under the U.S. political system, lawmakers are insulated from any accountability to the people who vote for them. That enables them to pursue an agenda against the interests of the majority. But they do have to face voters from time to time and, unfortunately for the 435 members of the House, the bailout package came up for a vote just five weeks before Election Day.

As a result, no one in Congress wants to be too closely associated with Paulson’s plan, no matter how badly their patrons on Wall Street want it. Thus, leading Democrats, while going along with Paulson, claimed they did so to “save” the economy, while blaming Bush and the Republicans for creating this catastrophe.

As for the House Republicans, whose defection led to the legislation’s defeat on Monday, there’s plenty of hot air about standing up for the interests of ordinary people. Yet the telling fact was that among those facing a close reelection battle in November, virtually all voted against the bailout.

The Paulson plan will be back before both houses of Congress before the week is out, perhaps with some token changes to pick up a few more votes. But the essence will be unchanged: It is a proposal for the greatest transfer of wealth from workers to the rich in U.S. history.

What’s really required is an entirely different kind of government intervention in the economy.

For starters, the banking system should be nationalized. This could provide immediate relief for the international credit squeeze, in which banks are choking off economic growth by refusing to lend to one another.

The next order of business: ban the Wall Street casino for high-stakes gambling on incomprehensible investments like “collateralized debt obligations” and “credit default swaps.” The banks’ ability to damage our livelihoods with their speculation should be ended immediately.

Nationalized banks are nothing new. For much of the second half of the 20th century, they were the norm in Western Europe, and they remained capitalist institutions to boot. But a nationalized banking system would at least provide more public accountability over the operations of these institutions and subject them to greater political pressure.

What’s more, it’s hard to describe the federal government’s recent adventures in the banking industry as something other than nationalization. In the past week, the FDIC seized control of Washington Mutual (the largest savings and loan in the country) and sold it to Bank of America at a bargain-basement price, and then put Wachovia (the fourth-largest bank) out of its misery with a forced sale to Citigroup.

But to sweeten the latter deal, the FDIC had to agree to cover any losses in excess of $42 billion out of the $312 billion of bad debt on Wachovia’s books. Yet Citigroup gets to keep the profits from having a bigger share of the market. Why shouldn’t taxpayers get the gains from this merger, instead of just the losses?

After three decades of free-market dogma pushed by both Republicans and Democrats, nationalization of the banks might seem unthinkably radical for the U.S. But it was the Wall Street conservative Republican Paulson who presided over the nationalization of mortgage lenders Fannie Mae and Freddy Mac, and the insurance giant AIG.

Paulson’s $700 billion bailout plan is also a form of nationalization, but one that socializes the banks’ losses at taxpayers’ expense, while leaving the profits in private hands. Why not take control of the banks outright, and send their corrupt and incompetent executives packing?

An economic bailout on pro-worker terms would include much more than nationalizing the banks.

There would be a moratorium on home foreclosures, mandatory renegotiations of adjustable-rate mortgages, and incentives to convert empty, newly constructed condominiums into affordable rental housing. Also badly needed is a plan to create jobs, starting with a public works infrastructure program that could rebuild schools and housing in run-down inner cities. The expansion of public transportation and government investment in alternative energy would also be priorities.

Such a program is a long way from what’s being discussed in Washington. For their part, Democrats from Barack Obama on down are content to attack the Republicans as the source of the economic catastrophe. That may be enough to get them elected, but the policies they promote don’t even begin to address the scale of the problem.

This economic crisis is still in its early stages, but it’s already clear that the old ideology of the free market is out. However, nothing has appeared to replace it, and so the mainstream political and economic discussions are a muddle of old ideas and half-baked schemes.

We need to start the debate on the real alternatives now — to raise the ideas, the strategies and the organization that working people need to resist the attempt to make them pay for the crisis.

John McCain, of course, wins the prize for setting the most outrageous double standard. “In the 21st century,” he informed us, “nations don’t invade other nations.” Unless, of course, we’re talking about Afghanistan or Iraq, and the invading power happens to be the United States. McCain demanded and immediate pullout of all Russian forces from Georgia and insisted upon its “territorial integrity”–even as he claims the right for the U.S. to occupy Iraq for the next 100 years.

The supposedly progressive Barack Obama sounded little different. “I have condemned Russian aggression, and today I reiterate my demand that Russia abide by the cease-fire,” he said. “Russia must know that its actions will have consequences.”

One can imagine how a President Obama would respond if Russian Prime Minister Vladimir Putin or President Dimitri Medvedev declared that he wouldn’t withdraw all troops from Georgia right away, but would leave behind a large occupation force in order to be “as careful in getting out of Georgia as we were careless in getting in.” That, of course, is Obama’s excuse for keeping up to 50,000 U.S. troops in Iraq for “force protection,” the defense of U.S. military personnel and “anti-terrorist” missions–the same kind of pretext that Russia used to move beyond Georgia’s disputed South Ossetia region to a full-fledged invasion.

The media has been even more two-faced than the politicians. The same news outlets that parroted the Pentagon whitewash of civilian casualties in the horrific U.S. blitz on Falluja in Iraq in 2004 or aerial bombardment of wedding parties in Afghanistan now breathlessly report on the Russian bombs and artillery shells that hit apartment buildings and markets.

For the U.S. media, when Washington military action causes civilian deaths–between 600,000 and more than 1 million in Iraq, according to some estimates–it’s “collateral damage,” a regrettable but unavoidable part of modern warfare. Yet when a Russian plane drops a bomb that kills innocent bystanders, it’s a barbaric disregard for human life. One wonders just how much more unpopular the U.S. war in Iraq would be if the media worked as hard at exposing civilian casualties in that country as it has in Georgia.

To point out this U.S. hypocrisy isn’t to downplay the imperial nature of Russia’s latest occupation of Georgia. Georgia may have initiated the conflict by trying to smash the Russian-backed separatists among the Ossetian minority–and likely did so with a green light from the U.S. But Russia seized the opportunity to make an example of Georgia through military might–and not for the first time.

The Tsarist rulers of old Russia conquered Georgia more than two centuries ago. After a brief interlude following the Russian Revolution of 1917, Georgia was again imprisoned in Stalin’s USSR. The Georgian nationalist movement revived in the 1980s despite murderous repression by the supposedly liberal Mikhail Gorbachev, the last president of the USSR.

The 1991 collapse of the USSR saw the non-Russian “federal republics,” including Georgia, gain independence. With Russian imperialism in crisis, U.S. imperialism was determined to fill the vacuum, not only in Moscow’s former puppet states in Eastern Europe, but in countries formerly part of the USSR.

Georgia, however, was slow going for the U.S. The pro-Western Georgian nationalist leader, Zviad Gamsakhurdia, pushed a “Georgia for the Georgians” line that frightened the 30 percent of the population that was non-Georgian–people whom Gamsakhurdia ominously referred to as “guests.” The first non-Communist Party head of Georgia in the waning days of the USSR, Gamsakhurdia went on to revoke the autonomous status of Abkhazia and North Ossetia, which had been enshrined in the USSR’s constitution. Resistance from the Abkhazians and Ossetians led to civil war and ethnic cleansing and, with Russian intervention, de facto independence for both regions since 1993.

The situation was little changed under the regime of Eduard Schevardnadze, the former foreign minister of the USSR who returned home to Georgia to take over the presidency after Gamsakhurdia was ousted in a coup. During Schevardnadze’s decade in power, Russia and the U.S. jockeyed for influence in Georgia.

Washington found a willing business partner in Schevardnadze. He was in favor of an oil pipeline that would bypass Russia. He was also a career Soviet politician who had run Georgia in the 1970s and who refused to take a consistent anti-Moscow line. In 2003, an election year in Georgia, Schevardnadze set off alarm bells in Washington by making a deal with the Russian electrical power monopoly AES, which followed an earlier “strategic partnership” with the huge Russian gas company Gazprom.

In late 2003, the U.S., then still in the confident “Mission Accomplished” phase of the Iraq war, decided to up the ante. It backed the U.S.-educated lawyer Mikheil Saakashvili, the leader of the mass protests of the “Rose Revolution” that ousted Schevardnadze after his party tried to rig parliamentary election results. Modeled on the rebellion that drove Slobodan Milosevic from power in Serbia in 2000, the Rose Revolution was sustained in part by money from the foundation controlled by billionaire financier George Soros. In the wake of the Rose Revolution the Soros foundation and other donors, as well as the United Nations Development Project, even paid salaries for 11,000 civil servants as part of a three-year aid program.

The U.S. saw the Saakashvili government as a means to accelerate its energy and defense plans for Georgia. Saakashvili’s presidential inauguration in 2004 was attended by then-Secretary of State Colin Powell, who announced $166 million in immediate aid as well as a three-year, $500 million aid package to promote “economic reforms.” This was only part of a steady stream of U.S. dollars to a country of just 4.6 million people. According to one study, Georgia is the second highest recipient of U.S. aid per capita in the world. Meanwhile, the European Union and the World Bank pledged another $1 billion in assistance to Saakashvili’s government.

Soon, the White House was ready to plant the U.S. flag in the heart of the South Caucasus. George W. Bush visited Tbilisi in May 2005 to “underscore his support for democracy, historic reform and peaceful conflict resolution,” as the U.S. Embassy in Georgia put it in a press release. These “reforms,” according to Kakha Bendukidze, the Russia-based industrial oligarch turned Georgian economy minister, meant that the Georgian state would privatize “everything that can be sold, except its conscience.”

With Saakashvili in power, Washington moved aggressively to create in Georgia a crucial gateway for oil and gas pipelines that could bypass Russia on the north and Iran on the south. It was under Saakashvili that the long-sought Baku-Tbilisi-Ceyhan (BTC) oil pipeline was finally completed in 2005, providing a means to get oil from Azerbaijan on the Caspian Sea across Georgia to a Turkish port on the Mediterranean.

The U.S. had to strong-arm Western oil companies into building BTC–ultimately, BP agreed to take the lead. The U.S. also had to pressure the International Finance Corporation, the private development arm of the World Bank, to loan $250 million for construction of the pipeline.

“In the South Caucasus, U.S. and European state interests are bound up with the commercial interests of major oil companies that form the principal Caspian energy consortia,” wrote Damien Helly and Giorgi Gogia, two experts on Georgian politics. “To secure their investments in the Caspian Sea Basin, these companies have found allies among U.S. geostrategists who support a strong U.S. presence among Russia’s neighbors. High-level former officials such as Zbigniew Brzezinski, Brent Scowcroft, John Sununu, James Baker and Richard Cheney (when he was head of Halliburton) have all visited Baku [Azerbaijan] and the Caspian region and lobbied in favor of the oil companies.”

These U.S. economic and political projects had to be secured militarily. Thus, in the wake of 9/11, the U.S. began to send military advisers to Georgia. That move rankled Moscow, which also accused Georgia of doing too little to stop the flow of arms and insurgents across its border into neighboring Chechnya, where separatists were fighting the Russian armed forces.

For Russia, Georgia was seen as a red line that the U.S. and NATO could not cross. In the early 1990s, Russia had no choice but to allow the expansion of NATO to include its former satellites in Eastern Europe and the three former Soviet Republics on the Baltic. But the U.S. push to include Georgia and Ukraine in the alliance–as well as efforts to place anti-missile systems in the Czech Republic and Poland–was too much for the Kremlin.

After Saakashvili took over in Tbilisi, U.S.-Russian tensions over Georgia increased dramatically. In 2004, NATO approved Georgia’s “Individual Action Partnership Plan,” the first step toward membership of the alliance, and stationed a liaison officer in Tbilisi. In the years since, the U.S. and Israel have sent military trainers to upgrade Georgia’s military to NATO standards, and Saakashvili has showed his loyalty to the U.S. by sending 2,500 Georgian troops to participate in the occupation of Iraq. By 2007, the Georgian armed forces, previously a ragtag outfit unable to defeat irregular militias in South Ossetia or Abkhazia, was well-drilled, lavishly equipped and NATO-ready. The U.S. pushed for a fast-track acceptance into the alliance.

All that state-of-the-art weaponry, of course, is now smashed or captured by the Russian army, and the armed forces shattered by the Russian occupation. What began as the latest U.S. attempt to use a small nation as an outpost of the American Empire has ended with a brutal invasion by a rival empire, one just as determined to police its own “backyard” as the U.S. has been in Latin America. And in the wake of the Russia-Georgia war, oil-rich Azerbaijan–which has its own separatist region populated by ethnic Armenians allied with Russia–will think twice about crossing Moscow to sign up with the U.S. and NATO.

But the consequences of the Russian invasion go far beyond the South Caucasus region. The war has exposed the expanded NATO as a hollow organization. “For an organization that has come to rely heavily on words and symbolism, NATO issued a disconcertingly evasive communiqué at its emergency meeting on Georgia,” journalist Vladimir Socor wrote. “The first mention of Russia appears only in the second paragraph, and it is a positive mention: NATO ‘welcomes the [armistice] agreement reached and signed by Georgia and Russia.’ No reference to the Russian military duress, under which this flawed armistice was ‘reached.’ The communiqué urges prompt, good-faith implementation of the armistice, politely ignoring its loopholes.”

So much for NATO’s vaunted “one-for-all, all-for-one” principle. The U.S. and NATO have bankrolled and armed a tiny nation, encouraged or tolerated a military attack that was bound to trigger a response from a neighboring great power–and, when that small country was invaded and occupied, the U.S. stood back and did nothing.

So much for the neoconservative dream of a “new world order” under U.S. domination, guaranteed by pre-emptive warfare and regime change. The U.S. wars in Iraq and Afghanistan were intended to allow Washington to consolidate its grip on the Middle East and project its power into the Caucusus and Central Asia. Instead, the U.S. finds itself militarily overstretched, incapable of protecting its new client states and unable even to get a strong resolution out of NATO condemning Russia’s invasion of Georgia–to say nothing of NATO countries’ reluctance to commit troops to the losing war in Afghanistan.

There are other examples of waning U.S. imperial clout–the ouster of Pervez Musharraf as dictator of Pakistan being the latest serious example. The cracks in the empire, in turn, are widened by the ongoing U.S. financial crisis which is increasingly dragging down the entire world economy. The entire U.S. economic model–the pro-business, free-trade neoliberal program–is being discredited. The recent collapse of the latest World Trade Organization negotiations is a case in point.

U.S. imperialism is far from a spent force, of course. The country still has enormous military might and economic resources, and a President Obama would likely bring in a foreign policy and military team that’s more competent than the Bush administration hacks. But no matter who’s in charge in the White House, the shift in the world balance of power–economically, militarily and politically–is bound to lead to further instability and crises.

To be sure, Chávez has continued to sound the nationalist and populist themes of the Bolivarian revolution, named for the 19th century liberation fighter, and to declare his commitment to “socialism for the 21st century.”

Chávez recently announced the nationalization of the cement industry in order to step up construction of housing, which is in short supply in the capital of Caracas and other major cities. The government also announced plans for a surtax on oil revenues when prices exceed $70 per barrel, a move that would increase revenues for social programs that have already greatly improved the lives of millions of poor people by providing access to health care and education.

Yet at the same time, other developments highlight the contradictions and limitations of the changes.

For example, Venezuelan left was shocked March 14 when the National Guard repressed a peaceful demonstration of union workers at the Sidor steel plant in Ciudad Guyana, the country’s center of heavy industry.

Dozens of workers were wounded, 53 were arrested, and 50 cars were destroyed in the attack on workers whose only crime was to reject management’s contract offer and demand the re-nationalization of the formerly state-owned company. Before it was privatized, Sidor employed 15,000 full-time workers. Today, the number is 4,000, with nearly 9,000 employed through subcontractors and temporary agencies.

“The steelworkers support the revolutionary process,” said José Melendez, financial secretary of the workers’ union SUTISS. “But we want to deepen it in harmony with what President Chávez says. We don’t understand the type of socialism in which the officials give support to a transnational corporation against the workers.”

A little more than two weeks later, union activists at a Bridgestone-Firestone tire plant in the city of Valencia came in for similar treatment. When workers fired for union activity tried to block the plant gates, Carabobo state police arrested 30 of them.

Since the defeat of Chávez’s proposed constitutional reforms in a December 2 referendum, the conservative opposition and employers have been more confident in opposing Chávez and resisting social political change.

At the same time, the conservative, bureaucratic elements around Chávez have themselves become more aggressive in pushing for more moderate policies and reining in the left.

The grassroots movement has responded by making unprecedented criticisms of the derecha endógenena–that is, the right wing within the Chavista camp. The friction between right and left was on display at the founding congress of the United Socialist Party of Venezuela (PSUV), which recently concluded.

The context of the struggle within the Chavista movement is the difficulties facing workers and the poor.

Fast-rising food prices, corruption and hoarding by corporate food distributors have led to periodic shortages of staples like chicken and sugar in the state-subsidized Mercal grocery stores, and even in privately owned shops. The majority of workers in the country still earn the minimum wage, which, while among the highest in Latin America, can’t keep pace with inflation.

Meanwhile, the upper middle class and the wealthy oligarchy have benefited greatly from the Venezuelan economy’s high growth rates, binging on luxury autos and homes. Profits in the financial sector are unprecedented.

This class polarization set the stage for the defeat of the constitutional referendum. Had the proposals been approved, they would have restructured local and regional governments to institutionalize popular and “communal” power. They also would have enshrined into the constitution various social gains, including protection for gay rights and the six-hour workday. Social security benefits would have been extended to workers in the informal sector of economy, which includes about half of all workers.

More controversial were proposals to give the office of president more powers, including the ability to appoint additional vice presidents to run regions of the country, control over military promotions and the abolition of presidential term limits. The opposition portrayed these moves as a dictatorial power-grab by Chávez.

Chávez’s electoral base registered its impatience with economic and social problems by staying home on Election Day. Although the opposition vote in the referendum increased by just 200,000 over the presidential election held the previous year, the pro-Chávez vote fell by 3 million through abstention.

The defeat of the referendum has given a powerful boost to the right. This, in turn, spurred the left to take up criticisms of government policies, targeting in particular those seen as engaging in corrupt behavior or impeding radical change. For many, the personification of the “endogenous right” is Diosdado Cabello, a former military officer who is now governor of the state of Miranda surrounding Caracas.

For his part, Chávez alternately tilts to the left and to the right. On the one hand, he has launched the “three R” campaign–revise, rectify, and re-motivate–to tackle social problems and reconnect with the voting base that deserted him in December.

At the same time, Chávez leans on an increasingly powerful circle of politicians and functionaries like Cabello. If Chávez expected to use the referendum to consolidate the “Bolivarian revolution” through grassroots participation in a restructured political system, he now pursues that goal through alliances with regional powerbrokers.

The left’s criticism of such figures flowed into the congress of the PSUV, which was held on successive weekends for nearly two months earlier this year. The left complained that their proposals were blocked by bureaucrats–officials from parties that had comprised Chávez’s governing coalition before their merger to form the PSUV.

Many also complained of the undemocratic process used to choose the top leadership of the PSUV. Although every branch of the party was able to submit candidates, a commission headed by Chávez paired down the proposals to just 60 names, who were then elected by the PSUV congress. The most prominent conservatives failed to get elected, but most key posts went to those widely seen as yes-men and yes-women for Chávez.

The debate in the PSUV is set to continue as the party selects candidates to compete in local and regional elections set for October.

Most of the Venezuelan far left has opted to remain inside the PSUV as a means of building a larger critical current within the Chavista camp. Yet PSUV officials have already shown that there are limits to the amount of dissent they are prepared to tolerate. They announced a “unanimous” pre-expulsion on National Assembly member Luís Tacsón after he accused the younger brother of Diosdado Cabello of corruption.

The left’s ability to challenge the “endogenous right” has been greatly weakened by the fragmentation of the National Union of Workers (UNT), a labor federation formed in 2003 out of the remnants of the corrupt pro-opposition labor federation, the CTV, which had supported the U.S.-backed coup attempt the previous year.

The UNT scarcely exists today–its half-dozen internal currents operate more or less autonomously. One of the currents, the Bolivarian Socialist Federation of Workers (FSBT), controls the Ministry of Labor. According to its critics, the labor ministry tilts towards management and is trying to create a state-run labor federation.

On the left of the UNT, the largest grouping, the Class-Struggle, Unitary and Revolutionary Current (C-CURA), is itself divided. Its best-known figure, Orlando Chirino, split with other C-CURA leaders to call for a “no” vote in the constitutional referendum. The government took its revenge when the state oil company PDVSA fired Chirino from his job, a move that was denounced even by Chirino’s critics.

With the right-wing opposition energized by Chávez’s setbacks, the challenge for the left is to reinvigorate activism and build organizations that can confront both the employers and bureaucratic and corrupt elements in the government that weaken the struggle.

The left in the PSUV should inflict a cost high enough that those who wish to manipulate the party “have to think about it twice,” said Stalin Pérez Borges, a national coordinator of the UNT and member of the PSUV in Valencia. “I believe that if we fight for this, we can get some of our people in, some of the workers, some from the popular movements, some who, as the president would say, are for the deepening of the revolutionary process and the struggle to build socialism.”

After a handshake deal at a summit of Latin American leaders, Venezuelan President Hugo Chávez pulled his troops back from a possible border confrontation with Colombia. Nevertheless, Colombia’s right-wing leader, Álvaro Uribe, remains the U.S. government’s close ally in its ongoing effort to destabilize Venezuela.

Ecuadoran President Rafael Correa and Chávez shook hands with Uribe at a summit of Latin American leaders in the Dominican Republic, winding down a crisis that erupted a week earlier when Colombia’s national police stormed across the border with Ecuador to kill the number-two leader of the Revolutionary Armed Forces of Colombia (FARC).

Colombia’s assassination of Raúl Reyes, who was killed along with more than 20 other FARC fighters, was a calculated blow to negotiations with the FARC over the release of hostages held by the rebel group.

The talks were begun last year by Chávez, initially with approval from Uribe, who was under pressure to secure the release of hostages after a series of scandals linked his government to right-wing paramilitaries. But Uribe withdrew from the process months later, accusing Chávez of meddling in Colombia’s internal politics. Several hostages were released by the FARC into Venezuelan custody anyway.

Now, by eliminating Reyes, the FARC’s main negotiator for hostage releases, Uribe is hoping to gear up for another round of fighting in Colombia’s decades-long civil war. He has the full backing of the U.S., which has long been frustrated by Uribe’s past cordial relationship with Chávez.

But while Uribe postured as the defender of Colombia from terrorism, some 200,000 people marched in the capital city of Bogotá against state violence and terror by right-wing paramilitaries, an unprecedented event in a country where opposition is routinely met with violence. The march–part of protests held in every big Colombian city and in Colombian communities worldwide–was an answer to pro-Uribe marches held a month earlier against kidnapping by the FARC.

Adding to Uribe’s problems was the fact that almost every Latin American country condemned Colombia’s raid as a violation of Ecuador’s territorial sovereignty.

Only George Bush seized the moment to praise “Colombia’s democracy.” He pledged U.S. support against “the continuing assault by narco-terrorists as well as the provocative maneuvers by the regime in Venezuela.”

To further please their backers in the U.S., Colombia’s armed forces released information from a computer hard drive captured in the border raid that supposedly provided evidence that Chávez had funneled $300 million to the FARC, and that the rebel group was using the funds to develop a radioactive “dirty bomb.”

A few reporters, including Juan Forero of the Washington Post and National Public Radio, lapped this up, but unnamed U.S. intelligence officials told ABC News that such reports should be treated with “extreme skepticism.”

Colombian government officials also released documents that, they claim, document an e-mail discussion among FARC leaders over how much money they should donate to Rafael Correa’s presidential campaign in Ecuador in 2006. Correa denied ever receiving funds from the FARC.

The Bush administration hasn’t yet accepted the legitimacy of these documents. But in any case, Washington’s endorsement of the Colombian attack on Ecuador’s territory is a message to Correa’s reformist government that the U.S. will try to undermine his government as well.

The U.S. has been looking for an opportunity to slap down Correa, who since taking office has crossed Washington by forging close ties to Chávez and refusing to renew the lease on the big U.S. air base in the town of Manta when it expires in November 2009.

It’s unclear whether U.S. officials had a broader offensive in mind when they gave Colombia the green light to carry out the raid on Ecuador, which was also a symbolic attack on Venezuela as well. With most of Latin America under center-left or left-wing governments, the conservative presidents who run Colombia, Mexico and Peru remain the U.S. government’s only major allies in the region.

But even Peru’s Alan Garcia and Mexico’s Felipe Calderón refused to support Uribe. Washington, desperate to prevent Chávez from using oil revenue to assist in Latin American economic integration outside U.S. control, apparently hoped Colombia’s provocations would isolate Chávez. Instead, the U.S. only pushed Latin American leaders further into Chávez’s camp.

All this is lost on the U.S. media, which routinely portray Uribe as a democrat and Chávez as a strongman or worse.

But honest observers of the region conclude otherwise. “Colombia presents one of the worst human rights records in the world,” wrote José Miguel Vivanco and Maria McFarland Sánchez-Moreno of Human Rights Watch.

“At nearly 3 million, Colombia’s population of internally displaced persons is second only to that of Sudan. Colombia also has the worst record in the world in terms of assassinations of trade unionists, with over 2,500 being killed in the last 20 years–more than 400 during the Uribe government. Journalists and human rights defenders live in fear they will be threatened or killed for simply doing their jobs.”

Much of this violence has been carried out by right-wing paramilitaries, often with covert or even open state support. According to the Colombia Support Network, right-wing paramilitaries have killed about 600 people per year between 1982 and 2005.

Uribe attempted to clean up Colombia’s human rights record with an amnesty program that allowed paramilitaries to “surrender” to the state. But as last year’s revelations showed, paramilitaries continue to function and have influence at the highest levels of government–the figures known in Colombia as “para-politicians.”

None of this stopped Washington from bankrolling Colombia’s civil war in the name of the “war on drugs.”

“During the Clinton administration, Colombia became, outside of Israel and Egypt, the leading recipient of U.S. military aid in the world,” Jake Hess wrote last year. “Since 2000, under Plan Colombia, Washington has funded Bogotá to the tune of some $5 billion, about 80 percent of which has been military aid. Overall, in the past decade, two-thirds of all U.S. military and police aid to Latin America has been devoted to Colombia.”

While U.S. law enforcement officials claim that the FARC are “narco-terrorists,” it is the rightist paramilitaries who are intimately linked to the major drug cartels.

Now comes Plan Colombia II, a package that combines further U.S.-Colombian military ties with a proposed free trade agreement between the U.S. and Colombia.

“With this strategy, they are seeking to privatize, hand over natural resources to multinationals, provide cheap Colombian labor and also legalize the plunder of extensive zones of national territory, where entire populations have been victims of paramilitary vigilante groups that took over their lands,” the left-wing party Polo Democrático Alternativo said in a statement issued in December.

Growing opposition to the free trade deal, as well as to Uribe’s policies, was the backdrop to the march against paramilitary and state violence on March 6.

“The people want truth, justice and effective reparations for the victims of state violence,” protest organizer Iván Cepeda Castro told a reporter for Colombia’s Semana magazine. “The demonstrators marched for this, because there is a community that wants the total dismantling of the paramilitaries, and they’re against para-politicians.”

Five terminated members of the union’s bargaining committee who helped lead a one-day strike last year have been denied union membership by their local union president in what experts say is a violation of their union’s constitution.

One of the five, Allen Bradley, was arrested February 16, even as he, along with the other terminated members, were complying with a police order to leave a union meeting. His “crime?” Taking a photo of a police officer who was confronting a fellow worker.

To an outsider, it may appear that United Auto Workers (UAW) Local 3520 is simply beset by factional rivalry. Certainly, such a conclusion would be convenient for Freightliner executives, who benefit from any diversion from the heart of the matter–the unjustified firing of five local union officers who led a walkout from their plant after their contract expired and management broke off negotiations.

Since then, the workers, now known as the Freightliner Five–Bradley, Robert Whiteside, Glenna Swinford, Franklin Torrence and David Crisco–have been fighting to regain their jobs. A January letter from an official at the UAW International’s office in Detroit stated that the union would press the workers’ case at arbitration hearings that have yet to be scheduled.

In recent weeks, the five have mounted a solidarity effort that has raised money from unionists and sympathizers around the country to keep them in the fight. The response has been positive and growing–not only because labor activists recognize the justice of their cause, but because the outcome of this struggle will have an impact on labor’s long-delayed efforts to organize the South.

If a company can get away with terminating a union’s elected officers–Whiteside, Swinford and Torrence are members of the local’s executive committee, and the others also hold several elected union positions–organizing in what is already hostile territory will become even more difficult.

As has been the case historically in the South, the struggle for racial justice is intertwined with workers’ rights. Whiteside and Torrence are African American and have been at the forefront of the effort to fight discrimination in the Cleveland plant. They, as well as Swinford and Bradley, are all active members of the NAACP.

“Corporations continue to flock to the South, where they can take advantage of ‘right-to-work’ laws and intimidate workers,” said Donna DeWitt, president of the South Carolina AFL-CIO. “It is incidents such as the termination of the five Cleveland Freightliner union members that impedes the ability of unions to organize successfully in the South.

“When workers see what happens to union members–union leaders–they will choose not to be a part of a union. In the end, the corporations win, and workers lose.”

Yet in this struggle, the Freightliner Five have repeatedly found themselves up against UAW Local 3520 President George Drexel. It was Drexel who called off the strike hours after it began on April 2, 2007. It was Drexel who tried to suspend the five from union office and put them on a weeklong internal union trial last November, which failed.

And it was Drexel who informed the five that they were no longer members in good standing, and would henceforth be barred from union meetings, even though in the UAW such determinations rest with a local’s financial secretary. In fact, Local 3520′s financial secretary, Shayne Brown, accepted back dues from the five just days before the union meeting.

Drexel did not return messages seeking comment on these developments. Whatever his motivations, a campaign to remove the five from union office, and now membership, can only benefit management. And as a look at Freightliner shows, the company–recently renamed Daimler Trucks North America after its German parent corporation–has long pursued an anti-union agenda.

Of course, corporate public relations specialists gave Freightliner’s “human resources management” a different spin. On June 1, 2006, Dieter Zetsche, chair of Freightliner’s parent company, then known as DaimlerChrysler, visited the truck maker’s flagship plant in Portland, Ore., to celebrate the 25th anniversary of Daimler’s purchase of Freightliner.

“Today, Freightliner is not only an integral part of the DaimlerChrysler Truck Group and the pillar of our North American commercial vehicle operations, it is also the group sales leader for our entire truck business,” Zetsche told an audience of factory workers, praising them as “dedicated employees.”

Eight months later, 900 of those “dedicated employees” were laid off as Freightliner transferred work to plants in North Carolina and Santiago Tianguistenco, outside Mexico City.

By July, production workers at the Portland plant, which builds the Western Star brand trucks and military vehicles, had had enough. Some 670 members of International Association of Machinists (IAM) Local 1050 walked out, preventing the plant from re-opening after a maintenance shutdown.

Three other unions at the plant–the Teamsters, the Service Employees International Union and the Painters–had already reached tentative agreements. But they honored the IAM’s picket lines and kept the plant shut down.

According to union officials, the IAM won improvements in job security and severance pay–key demands in view of the fact that Freightliner is building a big new plant in Saltillo, Mexico, which is scheduled to produce 30,000 Freightliner and Sterling brand trucks when production begins next year.

Daimler’s hard-line approach to Freightliner unions in the U.S. bears little resemblance to the employee-worker “co-management” mandated by German law. The UAW fought a long battle to organize Freightliner’s Mt. Holly, N.C., plant, finally gaining recognition in 1990, and carried out a 16-day unfair labor practices strike to win a contract the following year. But as Freightliner expanded production in the region, it did its best to keep the union out.

After Daimler’s merger with Chrysler in 1998, the UAW tried to leverage its relationship with Chrysler to push for the company’s neutrality in union organizing drives. Instead, the company dug in.

A key factor was the arrival of Daimler’s Rainer Schmueckle as president and CEO of Freightliner. His heavy-handed tactics created an opening for UAW organizers. At the Gastonia, N.C., truck parts plant, for example, workers were upset over a 5 percent wage cut and higher health insurance costs.

But just a day before an NLRB-supervised election, Gastonia management threatened workers with job loss if they voted to bring in the UAW. The UAW lost the vote, with 322 in favor of union representation and 346 against. The NLRB, which has taken a decidedly pro-management tilt under the Bush administration, nevertheless ordered a new election because of management intimidation.

In the end, the Gastonia plant was unionized–not through an NLRB election, but through a “card check” agreement in which DaimlerChrysler agreed that its nonunion operations would recognize the union if and when a majority of workers signed union cards. Nate Gooden, then director of the UAW’s Chrysler and heavy truck department, predicted that DaimlerChrysler’s Mercedes-Benz plant in Tuscaloosa County, Ala., would be organized “very, very soon, I think in less than a year.”

Nearly five years later, the Alabama plant remains nonunion after the UAW failed to win sufficient support. (The union hasn’t succeeded in organizing any foreign-owned plants that aren’t part of joint ventures with U.S. companies.) In 2006, the IAM launched its own attempt to organize the Alabama Mercedes plant, which has yet to yield results.

At the Freightliner plants in North Carolina, however, the UAW was able to score a success. In late 2003, workers in the Gastonia plant supported unionization via card check. Their counterparts in Cleveland, where a $1.15 wage cut had been imposed, also got organized through card check.

In 2004, the UAW won through card check at the Thomas Built Bus plant in High Point, N.C., but a complaint by an anti-union worker led the NLRB to overturn the recognition. A year later, the UAW narrowly won again, with 714 signing cards for the union out of a total of 1,300.

But if Freightliner couldn’t stop unionization, it was able to impose conditions on the UAW. In August 2002, management met with union officials to discuss a “framework” for card check procedures. The details of the agreement were revealed in a lawsuit by anti-union workers supported by the anti-labor National Right to Work Legal Defense Fund.

In a document signed by the UAW’s Gooden, the union agreed, among other things, that there would be “no wage adjustments provided at any newly organized plant prior to mid-2003.” A memo from Freightliner human resources manager Scott Evitt also revealed that Freightliner insisted on canceling a wage increase for the unionized Mount Holly plant in December 2002, cancellation of a profit-sharing bonus and benefit “cost-sharing” by employees.

Other aspects of the pre-agreement, which was to be in effect for five years, included a ban on guaranteed employee transfer between Freightliner business units; no additional limits on overtime scheduling; company control over production standards and job qualifications; a ban on strikes during the life of the contract other than health and safety issues; and “no future expectations that any Freightliner business unit will be required to meet ‘UAW pattern’ agreements.”

Whatever the agreement reached by the UAW and Freightliner, a network of activists in the Cleveland plant were already building a union from the bottom up.

Allen Bradley, an electrical contractor with multiple licenses, joined the UAW Voluntary Organizing Committee (VOC) to organize among his fellow skilled trades employees. Also on the VOC was Glenna Swinford, who had worked at Daimler’s Mercedes truck plant in Hampton, Va., from 1980 until it closed in 1990, before transferring to Freightliner.

Robert Whiteside, who had been part of unsuccessful union drives in previous jobs, threw himself into the VOC, as did Franklin Torrence, who had been working at the plant for the previous decade. The activism of these and other VOC members helped the UAW overcome the resistance that management had mounted in Gastonia and High Point.

The first contract in the plant was ratified in 2003. But there were still plenty of issues in which the workers clashed with management, with health and safety among the most important. David Crisco, who had been working for an insurance company before starting at the Cleveland plant soon after the contract was ratified, agreed to run for a union committeeman (shop steward) position just a couple of days after he was eligible to do so.

What spurred Crisco to get involved was the number of injuries he saw–a man whose leg was run over by a truck, another killed because he stepped around a parked truck into the path of another, and a woman whose arm was twisted out of her shoulder socket because her wedding ring was caught in a machine. She had never used the machine before, and had no training, Crisco said. “I saw many things that could have been avoided that management just overlooked,” he said.

Crisco soon piled up more grievances than any other member of the shop committee, and he won a good deal more than he lost. “I was fired a couple of times and walked out of the plant a couple of times,” he said. “I always changed out of my UAW shirt first, because I didn’t want to give them the satisfaction of seeing someone in a union shirt taken out of the plant.”

It wasn’t until the 2006 local union election that Crisco teamed up with the others who would become the Freightliner Five. “I didn’t vote for Robert Whiteside for shop committee chair because I didn’t know him,” Crisco said. Soon, the two men were working closely, writing grievances and addressing issues on the shop floor.

“Robert Whiteside is the epitome of a labor leader,” said Crisco, recalling Whiteside’s working 16- to 18-hour days despite a paycheck based on a regular workweek. “He’s polite and professional, but when you stepped on his peoples’ toes, you unleashed a lion.”

Management immediately made it clear what it thought of Whiteside, the union’s leading African American official. “The previous shop committee chair had a nice office, with a secretary paid by the company,” Crisco said. “But when Robert was elected, they put the office in a metal hole in the back of the plant and took the secretary away. I asked him, ‘Brother, do you think you’re the wrong color for this company?’ He said, ‘It sure looks that way.”

There were three other “thorns in the side” of management, Crisco says. One was Franklin Torrence, chair of the local’s civil and human rights committee, which regularly investigated management for violations of racial and gender discrimination. Torrence, an activist in the NAACP, is also active in the Coalition of Black Trade Unionists, the A. Philip Randolph Institute and serves as his local’s delegation to the Charlotte-area labor council.

Asked at a Chicago solidarity meeting February 2 about the connection between union and racial justice issues, he replied simply, “Workers’ rights and civil rights walk down the same road.”

Torrence’s co-chair on the civil rights committee was Glenna Swinford, who earned management’s ire during the 2003 contract talks for opposing mandatory random drug testing.

“They called me the drug queen after that,” she said. “But we had a series of terminations for substance abuse. I don’t take drugs or even drink, but I think everyone has the right to be protected from false-positive tests,” she said. She succeeded in getting testing at an off-site, licensed facility included in the 2007 contract.

Another thorn in management’s side was Bradley, who was skilled trades chair and an expert on the plant’s equipment, and the health and safety risks it posed, Crisco said.

With the election of the five to the bargaining committee, health and safety took center stage in negotiations. The contract expired on March 31, 2007. The next day, the company presented its final offer, with 22 articles still to be negotiated and 86 unresolved issues on health and safety.

Management informed the bargaining committee that there would be no contract extension–therefore, a scheduled Good Friday holiday was cancelled. Workers also reported that they were told that their health insurance was cancelled.

Thus, on April 2, the bargaining committee voted 12 to 0, with four abstentions, to call a strike.

Local 3520 President George Drexel promised to support the bargaining committee. But a few hours into the strike, Drexel sent a recorded telephone message to union members calling off the strike on the basis that it had not been sanctioned by the UAW International.

Eleven members of the bargaining committee were terminated by Freightliner. Six were rehired later after signing a “last chance” agreement and a statement that they had been misled by Whiteside, Swinford, Torrence, Bradley and Crisco into calling the strike. Contrary to the impression given by some UAW officials, the remaining five terminated workers received no offer to return to work at all.

The Freightliner Five successfully fought to get unemployment compensation. But rather than defend them, Drexel sought to suspend them from office and put them on trial for alleged violations of union rules. That effort failed when the elected trial commission ruled against Drexel.

At a subsequent meeting, rank-and-file members of Local 3520 initially rejected the contract offer that had spurred the strike, but Drexel arranged a second vote, held inside the plant, from which the five terminated workers were banned. This time, it passed.

Drexel’s efforts to remove the Freightliner Five from the union have complicated the fight for the workers’ jobs. But the battle is far from over. According to Ellis Boal, a labor lawyer specializing in defending UAW members, the local has no basis for denying them union membership. “Indeed, they must have been in good standing to even be allowed a trial,” he wrote in an e-mail message about the issue.

And so the struggle continues. “This issue affects us all–it affects unions everywhere,” Whiteside said at the Chicago meeting. “It affects the future organizing in the South.”

Bradley added, “What we want is justice from our employer. And what we would like to achieve is solidarity from our international union and our brothers and sisters all over the world.”

No one knows for sure, and there won’t be official confirmation until after the fact, when several months of economic data come in and show negative economic growth.

But millions of workers and poor people in the U.S. have felt like they’ve been in an economic downturn for months, if not years. That’s because wages for the majority of the population have stagnated, once inflation is taken into account, for much of the 2000s. After finally growing by 2 percent in 2006, average weekly and hourly wages fell by 1 percent last year, according to the Bureau of Labor Statistics.

More recently, inflation in the price of food and fuel — gasoline, heating oil, etc. — has been rising, too. These price rises aren’t considered part of the so-called “core” inflation rate published by the government, so official inflation statistics don’t look as bad. But these price hikes are taking a toll on the working-class living standards.

One big warning sign of recession came in the government’s jobs report for December. While the unemployment rate is still lower than typical recession levels, the number of jobless jumped from 4.7 to 5 percent in one month, indicating a cutback in hiring by employers.

What’s more, the so-called labor-force participation rate, the percentage of working-age people who have dropped out of the job market, is well below the level of the late 1990s, before the last recession hit. And manufacturing jobs — with better pay and benefits than average — have been lost during the 2000s recovery, with 212,000 eliminated in 2007 alone.

Is the housing slump to blame for the crisis?

The crash in the housing market has been a major blow to the U.S. economy in several ways.

Most directly, there has been a big rise in unemployment in construction — the industry jobless rate was 9.4 percent in December. Sales of newly constructed homes dropped 26 percent from 2007 to 2006, the biggest decline since records started being kept in 1963.

Second, the difficulty that homeowners are having with increased payments due to adjustable-rate mortgages — or paying back loans at all — means that consumer spending is dropping.

The housing bubble created $7 trillion in wealth on paper, which was the basis for borrowing that kept consumer spending up even as wages declined and the savings rate went below zero for the first time since the Great Depression of the 1930s. Now the source for that spending is drying up.

If this were the only impact of the housing crisis, it would be bad enough for working people.

The reality, however, is that the collapse in the bubble of housing prices — mainly in the U.S., but also internationally — has badly damaged the ability of the world financial system to function effectively. The resulting “credit squeeze,” with banks unable or unwilling to lend, has in turn spooked the stock markets worldwide, causing the big losses on markets in Hong Kong, Japan, Europe, Brazil, Russia, India and elsewhere.

This financial crisis is coinciding with what mainstream economists call the “end of the business cycle”–that is, the contraction that inevitably follows a period of capitalist expansion. A credit crunch will make new investment more difficult and prolong the slump.

Why are the banks in such bad shape?

If you read the financial press about the reasons for the banks’ crisis, you’ll find a dizzying amount of jargon: SIVs, CDOs, conduits, mortgage-backed securities, credit default swaps.

But if you step back from the details, a pattern emerges. The key to the housing boom was the ability of Wall Street investment banks to buy up mortgages, chop them up into pieces based on their supposed quality, and turn them into giant bonds and other financial paper that was bought up by investors.

The supposed benefit of this arrangement is that it spread the risk of some of those mortgages going bad among many investors, while allowing people who couldn’t qualify for a mortgage in the past to buy a house.

We know now that unscrupulous mortgage brokers knowingly pushed high-interest adjustable-rate loans on low-income people because they got higher fees for doing so. The mortgages were sold off to Wall Street, which then passed them along to all kinds of investors, from East Asian central banks to teachers’ pension funds and to the banks’ own off-the-books subsidiaries.

They could do this because Wall Street ratings agencies like Moody’s and Standard & Poor’s certified that these were perfectly safe investments, and collected big fees from the banks for doing so. This okay from ratings agencies allowed the “securitization” of mortgages on a staggering scale of $7 trillion.

This was part of a much bigger practice in the financial system of trading “derivatives” — financial paper “derived” from underlying financial assets. In housing, however, the value of those underlying assets — the houses themselves — is dropping due to higher default rates on mortgages and falling house prices.

That means the value of the various mortgaged-backed securities is dropping as well, so much so that the big banks have had to write off about $110 billion in bad debt. Big banks big firms like Citigroup, Merrill Lynch and Bear Stearns have had to turn to the Saudi royal family and state-controlled sovereign wealth funds from Dubai and China for bailouts, at high rates of interest.

Bad as these numbers are, the worst is probably still to come, with bank losses expected to reach as high as $300 or $400 billion. A warning sign came recently when companies that insure bonds for Wall Street went to the brink of bankruptcy. And if bond insurance becomes more expensive and difficult to get, bonds can’t be easily bought and sold, which further disrupts the credit machinery of the system.

Lower interest rates can ease the situation for the banks, but they won’t prevent further big losses in housing-related investments. Those losses mean that banks must increase their capital reserves, which in turn means they’ll be less able or willing to make loans.

By one estimate, the banks will have $2 trillion less to lend as the result of the housing meltdown. So lower interest rates aren’t a magic bullet, not so long as the banks are unable to finance new investments needed for the economy to recover.

Then there’s the wider threat that the U.S. crisis poses to the global economy. U.S. borrowing fueled demand internationally, which stimulated China’s great industrial revolution and double-digit annual growth rates. That, in turn, boosted industrial exports from Europe to China, and increased food and commodity prices worldwide, extending the boom to Latin America.

The result by 2006-07 was the strongest period of economic growth outside the U.S. in 30 years — even as the U.S. economy slowed down. There was talk that the world economy had “uncoupled” from the U.S. But one of the reasons for the international panic on stock markets in January was a recognition that a recession in the U.S. would cause overcapacity and lower growth rates for China and other exporters.

Will the interest rate cuts by the Federal Reserve solve the crisis?

The Fed’s job is to keep banks solvent and profitable, not to help workers get through hard times.

And the Fed’s emergency interest rate cut of 0.75 percent did keep the U.S. stock market from following the rest of the world into a meltdown — at least initially. That’s because lower interest rates push investors to shift to the stock market in search of better returns on their money. Another interest rate cut is expected soon.

But lower interest rates don’t automatically prevent an economic slump. That’s the lesson from Japan, where a real estate bubble collapsed in the early 1990s. The economy was stagnant for years even though interest rates dropped to near zero, because there were still too few profitable investments to spur an expansion.

The other risk of lower interest rates is higher inflation. Also, lower rates tend to lower the value of the dollar relative to other currencies. Already, the dollar has declined 30 percent compared to other major currencies over the past five years.

While this has made U.S. exports more competitive, it hasn’t made much of dent in the huge U.S. current account deficit, the gap between what the U.S. sells and loans abroad and what it buys and borrows. In the last three years, the U.S. borrowed $2.5 trillion from abroad. This has given China and other countries huge dollar reserves and underpinned China’s rise as an economic competitor to the U.S.

U.S. policymakers often have worried that low interest rates and a weak dollar would lead foreign investors to dump their dollar-based investments and cause a currency crisis. Instead, however, foreign companies and sovereign wealth funds are taking advantage of the weak dollar to buy up U.S. assets at bargain-basement prices, a trend which diminishes U.S. capitalists’ control over their own fate.

A couple of years ago, Congress sounded the alarm about a proposed Chinese takeover of the Unocal oil company and Dubai’s attempted purchase of U.S. ports. Now, the politicians are silent, because the U.S. banks desperately need the cash.

What about the proposed economic stimulus package that the Bush White House and Democrats in Congress have agreed on?

This won’t stop a recession, either. The stimulus package is basically another Democratic Party capitulation to George W. Bush’s ideologically driven tax-cut agenda.

If passed, it package would give money to households through tax rebates — $600 for individuals, $1,200 for couples, and $300 credits per child, with low-income workers who don’t pay taxes getting $300 to $600.

While this money will be welcome to people scrambling to get by, it won’t boost consumption nearly as much as increasing funding for food stamps or extending unemployment benefits would — by putting money directly in the hands of people who need it most, and who must spend it immediately.

The tax incentives for greater business investment won’t make a difference, either, since investment, already historically low during the economic expansion, isn’t likely to pick up until market conditions improve anyway.

Finally, the proposed $150 billion package is paltry in view of what’s needed to kick-start the U.S. economy, with a gross domestic product of $13.9 trillion. What neither Bush nor the Democrats will acknowledge is that the money that could be used for economic stimulus is being spent on wars and occupations in Iraq and Afghanistan.

Author Chalmers Johnson wrote recently that combined U.S. war-related spending will top $1 trillion in 2008. Thus, the demand for money for jobs, education and health care, not war and occupation, will be politically central no matter who is elected president in November.

Certainly, Obama’s campaign owes its existence to that movement. The fact that an African American is today a serious contender for the presidency is part of the legacy of those who defied the violence and humiliation of American apartheid in the Deep South.

But as Martin Luther King Day approached, Obama chose to highlight the historic impact of another figure in U.S. politics — Ronald Reagan.

“I think Ronald Reagan changed the trajectory of America in a way that Richard Nixon did not, and in a way that Bill Clinton did not,” Obama told journalists. “He put us on a fundamentally different path because the country was ready for it.

“I think they felt like with all the excesses of the 1960s and 1970s and government had grown and grown, but there wasn’t much sense of accountability in terms of how it was operating. I think…he just tapped into what people were already feeling, which was [that] we want clarity, we want optimism, we want a return to that sense of dynamism and entrepreneurship that had been missing.”

Why would the country’s most prominent African American politician praise the supposed political genius of Reagan, who played the race card all the way to the White House?

Reagan launched his 1980 presidential campaign in Philadelphia, Miss., where the Ku Klux Klan had murdered three civil rights workers in 1964. In his speech, Reagan declared, “I believe in states’ rights” — the euphemism used by white racists in the 1960s to defend Jim Crow segregation in the South.

Reagan frequently resorted to racially charged stereotypes — the “welfare queen” driving a Cadillac and the “young buck” buying steak with food stamps. The Voting Rights Act of 1965 that ended legal racial discrimination in voting, was, according to Reagan, “humiliating to the South.”

In the Reaganite worldview, the “excesses” of the 1960s and 1970s cited by Obama included the struggle to end legalized racism, not to mention other social movements — against the Vietnam War, and for women’s rights, and gay and lesbian liberation.

Certainly, this can’t be news to Obama. His public appreciation of Reagan is part of a calculated attempt to appeal to “swing” voters — Republicans fed up over the economy, the war, White House incompetence and corruption.

This overture to the right is typical of Obama’s political career. He has positioned himself to the right of the generation of African American politicians that emerged from the civil rights and Black Power movements. The product of an interracial marriage, Obama has been deemed by some pundits as a “post-racial” politician.

The fact, is, however, that no African American in the U.S. can completely avoid the legacy of 500 years of slavery, racism and oppression.

Nevertheless, the relationship between race, class and politics in the U.S. has been transformed in the 40 years between the assassination of Martin Luther King and Obama’s candidacy. Understanding those changes helps provide a framework for understanding both the powerful appeal of Obama’s campaign to millions of people, as well as his moderate politics and the very limited horizons of his call for “change.”

The passage of the Voting Rights Act of 1965 marked the transition from a civil rights movement centered on the South to a Black Power revolt in U.S. cities.

The act was signed into law five months after Martin Luther King’s famous march in Selma, Ala., and five days before the Los Angeles Black ghetto of Watts exploded over an incident of police brutality. With segregation now outlawed, the movement had to reorient on economic and social demands.

As a leader of the Nation of Islam, Malcolm X had criticized Martin Luther King’s moderation at various points. But in the last year of his life before he was assassinated, Malcolm went further, embracing revolutionary politics and identifying the African American movement with Third World liberation struggles.

Malcolm’s development in turn influenced the Black Panther Party and other groups who saw revolutionary socialism as the means to achieve Black liberation in the United States. “Black Power” became a popular slogan in the movement.

But just what Black Power meant depended on who was talking. While the slogan implied socialism to the Black Panther Party, it meant economic opportunity for the Black middle class that had long been limited by legal segregation in the South and racial discrimination everywhere in terms of employment, housing, obtaining loans for business and much else.

The Democratic Party establishment sought to harness the “Black Power” demand to its own ends. In 1967, Louis Martin, an African American deputy chair of the Democratic Party, recommended that the Johnson administration try to “achieve ‘Black Power’ in a constitutional, orderly manner.”

Martin wanted Black Democrats to “take a more active role in community leadership and not leave the kind of vacuum which is usually filled by civil rights kooks.” He hoped that Black elected officials would provide the Democratic Johnson administration with a “link to the Negro community and…effectively bypass the Rap Browns and Stokely Carmichaels [both radical leaders] and even the Martin Luther Kings (none of whom have been elected to anything).”

However cynical, Johnson’s overture to Southern Blacks was intolerable to the party’s Southern wing. Most white Southern Democrats backed George Wallace’s segregationist presidential campaign of 1968, which received 8 million votes.

Richard Nixon’s Republican administration deepened the split within Democratic ranks by attempting to block civil rights legislation, and white Southerners overwhelmingly voted for Nixon in his landslide victory over George McGovern in 1972.

This was the origins of the Republicans’ “Southern strategy” — appealing to white conservatives in a backlash against the civil rights movement.

Instead of openly defending segregation and white supremacy, the racists repackaged their message around issues of “crime,” “welfare fraud” and affirmative action as “reverse discrimination.” It’s been effective ever since, giving the Republicans an electoral lock on much of the South since then.

Meanwhile, Louis Martin’s strategy of expanding the base of African American officeholders quickly bore fruit. The number of Black elected officials increased fourfold to 1,860 between 1967 and 1971. In many cases, Black activists weren’t intentionally co-opted by the Democratic Party. They had to fight their way in, challenging racist Democratic political machines in Northern cities.

The perspectives of the new radicals and the Black Democrats coexisted uneasily at the National Black Political Convention in Gary, Ind., on March 10-12, 1972. Attended by over 8,000 people, the convention marked the first large-scale gathering of the various currents in Black politics: radical nationalists, cultural nationalists, socialists, Maoists and Black Democratic elected officials, including the host, Mayor Richard Hatcher.

The preamble to the National Black Political Agenda written for the convention was radical. It read in part: “The profound crises of Black people and the disaster of America are not simply caused by men, nor will they be solved by men alone.

“These crises are the crises of basically flawed economics and politics, and of cultural degradation. None of the Democratic candidates and none of the Republican candidates — regardless of their vague promises to us or to their white constituencies — can solve our problems or the problems of this country without radically changing the systems by which it operates.”

The Rev. Jesse Jackson, then director of People United to Save Humanity (PUSH), went on record in support of a future break with the Democrats, but said the “Black political movement was too young” for such a move, and instead urged Blacks to seek “delegate power” at the Democratic National Convention that summer.

Jackson’s approach prevailed as the movement dissipated in the 1970s. By the 1980s, African Americans had captured City Hall in Chicago, Philadelphia, New York and other cities, and had held senior positions in key congressional committees.

This represented an advance for the Black middle class, which could use the dismantling of Jim Crow and new laws against discrimination in order to advance in politics and business and, often, escape segregated neighborhoods as well. But the advance within the system for a minority of African Americans was a retreat from the radical goals of the 1960s movements.

Jackson’s presidential campaigns of 1984 and 1988 highlighted these contradictions of the Black political establishment even as it showed that growing numbers of white working-class voters were prepared to support Black candidates.

In 1984, Jackson tapped African Americans’ anger at Ronald Reagan, and he swept the Black vote despite the opposition of most prominent African American politicians. By 1988, Jackson had forged an alliance with key Black politicians, who, even if they didn’t care for Jackson’s approach, concluded that if they couldn’t beat him, they’d have to join him.

The “Super Tuesday” primary of March 8, 1988, dominated by Southern states and designed to favor a conservative candidate, mobilized the Black vote for Jackson. Of 21 primaries, Jackson placed first or second in 16, and became the frontrunner in terms of delegates. This was followed by a victory in the Michigan party caucuses, with 55 percent of the vote. He ended the race with 7 million votes, 30 percent of the total.

Jackson’s success rattled the Democratic establishment. Yet on the other hand, the Jackson campaigns marked the final stage in the transition of African American politics from being dominated by social struggles to becoming — in the view of party leaders — just another Democratic voting bloc.

A voting bloc that needed to know its place, that is. Democratic powerbrokers reacted to Jackson’s success by forming the Democratic Leadership Caucus (DLC), a group dominated by Southerners who wanted the party to distance itself from Blacks, organized labor and women’s groups and develop closer ties to Corporate America.

A former DLC co-chair, Arkansas Gov. Bill Clinton, implemented a “Southern strategy” of his own to win over white conservatives in his 1992 bid for the White House and in his re-election. Clinton’s tactics included denouncing the rap artist Sistah Souljah at an event sponsored by Jesse Jackson; presiding over the execution of mentally disabled Black man, Ricky Ray Rector; and staging a photo op at a Georgia penitentiary work gang of hundreds of Black men.

Once in office, he presided over “anti-crime” legislation that left more African American men in prison than in college. He also collaborated with the Republican Congress to abolish the federal welfare system, something Ronald Reagan could never have gotten away with.

At the same time, however, Clinton cultivated allies in the Black political establishment, which was ever more distant from the struggles that had propelled it to prominence.

Clinton’s race-baiting politics were part of an overall turn to the right by the Democrats. While they remained to the left of the Republicans, the Democrats have embraced the post-Reagan formula of free market economics, a dramatically reduced welfare state and the projection of U.S. military power abroad.

To be sure, Black elected officials tend to be more liberal than the average Democrat, reflecting the preferences of their voting base. But most are completely caught up in politics as usual.

As journalists Russell Mokhiber and Robert Weissman point out, the Congressional Black Caucus Foundation receives big donations from auto, oil, tobacco, alcohol and junk food companies, which has effectively silenced the caucus on issues ranging from public health to alternative energy.

The black political establishment’s drift to the right isn’t a question of personal failings, however. It’s part of a trend towards greater class divisions among African Americans over the past 20 years.

Enter Obama. As a member of the post-civil rights generation, the one-time community organizer tailored his politics to fit the new political reality. As he said of his days as a college activist in his (second) autobiography, The Audacity of Hope, “I would find myself in the curious position of defending aspects of Reagan’s worldview. I couldn’t be persuaded that U.S. multinationals and international terms of trade were single-handedly responsible for poverty around the world; nobody forced corrupt leaders in Third World countries to steal from their people.”

Thus, Obama’s first high-profile campaign was an attempt to unseat Rep. Bobby Rush, a former Black Panther, from his seat in Congress in the 2000 elections. “Part of what we are talking about is a transition from a politics of protest to a politics of progress,” Obama said then.

He lost badly, but won new and influential backers. After winning his U.S. Senate seat in 2004, he regularly took pro-business positions, including voting for a bill that caps jury awards in wrongful injury lawsuits used to hold big business accountable for faulty products.

Meanwhile, Obama quickly became adept at raising campaign cash for others — and himself. He’s been able to match the vaunted Clinton fundraising machine, thanks in part to big money from hedge-fund managers and key players across Corporate America.

Yet for all his efforts to locate himself in the mainstream, Obama inevitably must contend with the question of race and racism in his personal and political life. And the prospect of an African American president in a country built on slavery and racism is exciting for millions of people — not just African Americans, but others who see a vote for Obama as a vote to put the U.S.’s sordid history of racism behind us once and for all.

But the symbolism of an Obama presidency, however powerful, wouldn’t uproot racism’s legacy.

The commentator Earl Ofari Hutchinson put it his way: “An Obama presidency would be a racial step forward in the sense that it shows that enough whites can and will look past race to make a Black, especially an exceptional Black, their leader.

“It would not, however, show that they are willing to do the same for the millions of Blacks that cram America’s jails and prisons, suffer housing and job discrimination, and are trapped in failing public schools in America’s poor, crime ridden inner cities. Their plight and how they are viewed and treated will remain the same after Obama takes office. A President Obama won’t change that.”

According to federal statistics, just 18,000 new jobs were created last month, and the overall unemployment rate jumped from 4.7 percent to 5 percent, the largest spike in joblessness since the aftermath of the September 11 attacks in 2001.

Overall, the U.S. economy added 1.3 million jobs in 2007, nearly half the number for 2006. The tiny jobs gain of December — the smallest increase in four years — led to a rise in the jobless rate that economist and New York Times columnist Paul Krugman called “brutally bad.”

In manufacturing alone, 31,000 jobs were eliminated in December, bringing the total loss of factory employment in 2007 to 212,000. Many of the jobs that disappeared were good-paying positions permanently eliminated by the Detroit automakers. What’s more, unemployment in the construction industry, hammered by the housing crisis, hit 9.4 percent in December.

Over the entire year, the unemployment rate rose 0.6 percent–which means 895,000 more people are out of work. As always, Blacks and Latinos were the first to lose their jobs. The African American unemployment rate in December hit 9 percent, and 6.3 percent of Latinos were out of work.

If current trends continue, joblessness is likely to get worse. “Though December’s net gains were the lowest [of 2007] . . . payroll growth has slowed since June, adding an average of 84,000 jobs per month, compared to 147,000 January-May of this year,” wrote Jared Bernstein of the Economic Policy Institute.

“Less than half of private-sector industries were expanding last month, the worst showing in over four years. The private-service sector, the core sector of job growth in our economy, added only 62,000 jobs last month, its lowest month since October 2005. Also, there was a very large jump–from 4.5 million to 4.7 million, the highest level in over four years–in persons working part-time who were unable to find full-time jobs.”

Long-term joblessness is on the rise, too. “The percentage of unemployed workers who have remained without a job for more than 26 weeks (the normal duration for regular unemployment benefits) and continue to search for work is considerably higher than on the eve of the last recession,” wrote economist Chad Stone of the Center on Budget and Policy Priorities. “In December 2007, 17.5 percent of all unemployed workers were long-term unemployed, compared with just 11.1 percent in March 2001.”

But some of the unemployed don’t have to worry about benefits running out. They’ve got enough money to last a lifetime. A whole lot of lifetimes, in fact.

Consider Charles Prince, CEO of Citigroup until the board of directors demanded his scalp for plunging the biggest bank in the U.S. into the center of the sub-prime mortgage crisis. Given the scale of the debacle at Citigroup–where the losses are still mounting–it’s not at all clear whether Prince can expect to find another job at the top of Corporate America.

But he’s not likely to suffer. A Wall Street Journal article reported that the disgraced executive was walking away with benefits worth $29.5 million. These include “deferred stock valued at $16.05 million, restricted stock awards valued at $10.72 million, retirement savings valued at $1.43 million and in-the-money options valued at $1.28 million, according to his separation agreement, a copy of which was filed with the Securities and Exchange Commission,” the Journal reported.

“In addition, Citigroup will provide Mr. Prince an office, an administrative assistant and a car and driver for at least five years, or until he finds a new employer. It will also pay certain taxes associated with those benefits, according to the SEC filing.”

The numbers didn’t include Prince’s multimillion-dollar bonus for 2007–prorated, of course, since he left the job a few weeks before year’s end.

Prince wasn’t the only Wall Street boss to walk the plank over the mortgage mess. Stan O’Neal was forced out as CEO of Merrill Lynch for presiding over billions in losses as a result of the housing crash.

But O’Neal’s walk-away money makes Prince look poor: $165.5 million in various types of stock grants and retirement funds. And that’s not all. The Journal noted, “Mr. O’Neal is also expected to receive a portion of his salary for the year”–although a Merrill spokesperson wouldn’t say how much. “Last year [2006], Mr. O’Neal earned $700,000 in base pay and $18.5 million in a cash bonus.”

Not bad for a guy who presided over an $8.4 billion in write-off of bad loans and a $2.2 billion loss in the third quarter of 2007 alone.

But even O’Neal’s payoff can’t match the golden parachute for James Cayne, recently ousted as CEO of the investment bank Bear Stearns.

Last July, when Bear Stearns became the first Wall Street firm hit by the credit crisis after two of its hedge funds collapsed, Cayne “was playing in a bridge tournament in Nashville, Tenn., without a cell phone or an e-mail device,” the Journal reported.

“As Bear’s fund meltdown was helping spark this year’s mortgage-market and credit convulsions, Mr. Cayne at times missed key events. At a tense August conference call with investors, he left after a few opening words, and listeners didn’t know when he returned. In summer weeks, he typically left the office on Thursday afternoon and spent Friday at his New Jersey golf club, out of touch for stretches, according to associates and golf records. In the critical month of July, he spent 10 of the 21 workdays out of the office, either at the bridge event or golfing, according to golf, bridge and hotel records.”

Cayne survived the scandal for a time, making a scapegoat of Bear Stearns co-president Warren Spector, who was forced out in August. Spector didn’t get a severance package, but he did pocket $23 million in “capital accumulation package awards.”

Then, in early January, the 73-year-old Cayne was forced out, too. But he remains the owner of 4.9 percent of Bear Stearns stock, worth an estimated $1.3 billion.

At the other end of the economic scale, workers who were bypassed by the boom are bracing for recession.

Economists of every political stripe are predicting a slump, the Democratic presidential candidates have all made proposals for an economic stimulus package — and even the Bush White House, long in denial about the housing crisis and its impact, is trying to put together a plan to jump-start the economy. Yet the stimulus proposals from both parties amount to just a fraction of the amount spent on the U.S. wars in Iraq and Afghanistan.

With more bad news emerging on practically every economic front–falling house prices, a credit squeeze, declining consumer spending, stagnant wages and higher inflation — the picture is likely to get worse.

But Wall Street has already signaled Corporate America’s plan: Grab all the cash you can, and make workers pay.

For the U.S. mainstream media, Venezuela’s vote on constitutional reforms December 2 is simply the latest power grab in authoritarian President Hugo Chávez’s bid to crush dissent, make himself president for life and impose a state-controlled economy.

The view from the streets of the Caracas barrio of 23 de Enero, however, is very different.

A densely populated, impoverished neighborhood seldom visited by U.S. reporters, it is famous for its role in mobilizing in January 1958 to overthrow a Venezuelan military dictator on the date that gave the barrio its name.

These days, it is home to an active local branch, or battalion, of the United Socialist Party of Venezuela (PSUV, according to its Spanish initials). On a rainy mid-November evening, activists gathered to distribute copies of the proposed reform by going door to door.

Of the 30 or so people who turned out–all but four of them women–just two had prior political experience in Chávez’s original political party, the Fifth Republic Movement (MVR). Only one–Rosaida Hernández–is an experienced politico, having served as a functionary of the Fifth Republic Movement and won election to Caracas’ municipal council.

More typical was Iraima Díaz, a neighborhood resident in her 30s who had long supported Chávez and benefited from his government’s social programs, but hadn’t been politically active. “I got involved to solve the problems of my community,” she said.

Another activist, Lúz Estella, a social worker whose father lives in the area, also became active recently, fed up with the opposition media and wanting to get involved.

Now Díaz and Estella find themselves members of Chávez’s own PSUV battalion–the president often turns up at the weekly Saturday meetings held at the military museum in the neighborhood.

The facility also serves as a place for enrollment in government “missions”–national social welfare programs initiated by Chávez in 2003, which evolved from offering free medical care to literacy and education programs, subsidized grocery stores and a great deal more, thanks to revenues from oil exports and some of the fastest economic growth rates in the world.

Despite its well-known member and proximity to local missions, the 23 de Enero PSUV battalion faces a challenges common to its counterparts across the country–how to mobilize the 5.7 million people who have registered for the party since it was formed earlier this year through a merger of parties of Chávez’s governing coalition.

Nevertheless, as the group, singing campaign songs, made its way through the narrow streets on steep hillsides of the barrio, people came to their windows to take copies of the reform and discuss it briefly–an elderly man alone in his small apartment; a young woman of African descent breastfeeding an infant; the proprietor of a tiny store situated in what was once a living room, with a window facing the street; a group of young men in their 20s gathered outside a small restaurant.

The impact of Chávez’s reforms is visible on the streets of 23 de Enero and other barrios–people are better fed and better dressed.

As is often the case in Venezuela, the political direction in the barrios is the opposite Caracas’ well-off neighborhoods and the suburbs, where the upper middle class and the wealthy live in luxurious gated communities and drive Hummers and Land Rovers.

As opposition to Chávez’s reforms sharpened–first with protests by largely middle-class college students; then the defection of a longtime Chávez ally, former army chief of staff and defense minister Raúl Baduel–the mass of Chávez supporters began to mobilize.

Nevertheless, the opposition, tainted by the coup of 2002 and the subsequent lockout of oil workers by industry bosses, has been able to refresh its image.

Key to this was the student mobilization last summer over the government’s refusal to renew the broadcast license of the privately owned, opposition-controlled RCTV channel.

Wrongly portrayed in the Western media as a “closure” of a media outlet, the decision was made as the result of RCTV’s active role in supporting the coup. Nevertheless, the government’s refusal to renew the channel’s broadcast license gave Venezuela’s right the opportunity to claim the mantle of “democracy,” a theme it has continued in protests aimed at forcing a delay in the vote for constitutional reform.

Significantly, the student protests took shape as a national social movement, led mainly by middle class and wealthy students who predominate at Venezuela’s elite universities, such as the UCV in Caracas.

While portraying themselves as nonviolent in the face of allegedly armed Chavista students–two students were wounded on the UCV campus November 7–the opposition student protests have often turned violent. The U.S. media focused on the supposed gunplay of Chavista students, but it was the right-wing protesters who besieged pro-Chávez students in UCV’s law and social work schools, physically destroying both.

Still, the student protesters have carried the day politically on campus, with the opposition winning a reported 91 percent of votes in student government elections soon afterward.

The opposition got another boost when it was joined by Baduel, the former general and defense minister.

A key figure in preventing the 2002 military attempt to oust Chávez, Baduel has used the word “coup” to describe the impact of Chávez’s proposed constitutional changes.

While Baduel’s impact on the reform vote is probably limited, his turn may point to something more serious–concern among senior military brass over a constitutional reform that would reorganize and centralize the armed forces and give the president authority to promote all officers, not just top generals.

Already, Chávez has dropped a call to convert the reserves into “Bolivarian Popular Militias” to support the regular armed forces, presenting it in the constitutional reforms instead as a “National Bolivarian Militia.”

In any case, the retooled opposition presents a new challenge for activists of the “Bolivarian revolution”–named for the 19th century anti-colonial leader.

In the past, Chávez could mobilize his base among the poor on clear-cut issues–protesting the right-wing coup attempt of April 2002, voting to keep him in office in the recall election of 2004, re-electing him as president a year ago.

The constitutional reforms, however, are more complicated and controversial within the Chávez camp itself.

At issue is the balance between the creation of communal councils to enhance what Chávez calls “popular power,” and measures that would strengthen the powers of the presidency and the central state in several respects.

These include the removal of presidential term limits and lengthening the term from six to seven years; the ability to appoint an unrestricted number of secondary vice presidents; the authority to determine boundaries of proposed “communal cities” of municipalities and states; and control over the use of foreign currency reserves with no constitutional limits.

The right to recall the president still exists, but the number of signatures required to trigger a vote would increase from 20 percent to 30 percent of eligible voters.

Other constitutional measures debated on the left would give the president and National Assembly the ability to impose states of emergency in which the right to information is waived–probably a response to the private media’s complicity in the 2002 coup. The National Assembly would also gain the right to remove Supreme Court judges and election officials through a simple majority vote.

These changes hardly amount to the “Chávez dictatorship” conjured up in the mainstream media, and the Venezuelan constitution would remain more democratic in many respects than the U.S. Constitution, a relic of the 18th century.

The question, however, is whether the constitution promotes a transition to “popular power” and “socialism,” as Chávez would have it.

Essentially, the reforms reflect the contradiction at the heart of Chávez’s project–an effort to initiate revolutionary change from above.

The expansion of communal councils and creation of workers councils are seen by grassroots Chavista activists as a legitimate effort to anchor the “revolutionary process” at the grassroots.

However, the additional powers for the presidency and the reorganization of the armed forces highlight the fact that Chávez apparently sees the presidency–and the centralized state–as the guardian of the revolution.

Tellingly, it is the military, the most rigidly hierarchical institution in society, which is to protect the newly decentralized democracy, while remaining aloof from such changes internally.

Chávez’s effort to combine what he calls an “explosion of popular power” with greater centralism may reflect his military past. But if the government is able to portray itself as creating “motors” of revolutionary change, it’s because grassroots organizations, social movements and organized labor have so far failed to create sizeable organizations of their own.

While there is no doubt of Chávez’s popularity, particularly among the poor, their role thus far has been to defend Chávez from the right during the coup and lockout, and turning out for elections. The constitutional reforms, along with the creation of the PSUV at Chávez’s initiative, are intended to close the gap between these periodic mass mobilizations and the lack of day-to-day organization.

To consolidate this base, the proposed constitutional reforms offer further social gains. For example, virtually unmentioned in U.S. media accounts is the fact that the reforms would provide, for the first time, social security benefits to the 50 percent of Venezuelan workers who toil in the informal sector as street vendors, taxi drivers and the like. The workweek would be limited to 36 hours.

There are other advances as well, including the consolidation of land reform, outlawing discrimination based on gender and sexual orientation, lowering the voting age from 18 to 16, guaranteed free university education, gender parity in politics and political parties, public financing of political campaigns, recognition of Venezuelans of African descent, and more.

Critics on the right claim these measures constitute a bribe to the mass of Venezuelans–handouts in exchange for political support, a version of the traditional clientleism used Latin American populists such as Argentina’s Juan Perón.

In fact, Perón and other 20th century populists went far beyond Chávez in terms of nationalizing industries–Venezuela’s oil company, PDVSA, has been government owned since the 1970s, and the recent state takeover of the telecommunications and electrical power companies are renationalizations.

But the Chávez project aims at a more thoroughgoing social transformation than populists of the past. The aim is to build what Chávez calls “socialism of the 21st century” by trying to bypass the capitalist state with new structures and enshrining new forms of “social,” “public” and “mixed” property to promote “endogenous” economic development–that is, growth not dependent on the oil economy.

These efforts are, in turn, supposed to mesh with “communes” created by communal councils–which, under the proposed constitutional changes, will receive at least 5 percent of the national budget to manage local affairs. The text of the reform proposal explains: “The state will foment and develop different forms of production and economic units of social property, from direct or communal-controlled, to indirect or state-controlled, as well as productive economic units for social production and/or distribution.”

Moreover, the proposed reform on “popular power” also calls for the creation of councils for workers, students, farmers, craftspeople, fishermen and -women, sports participants, youth, the elderly, women, disabled people and others.

This new “geometry of power,” as Chávez calls it, is apparently designed to engineer social change while avoiding direct confrontation with big business, whose property rights are in fact safeguarded in the constitutional reforms. As Chávez himself said last summer, “We have no plan to eliminate the oligarchy, Venezuela’s bourgeoisie.”

Funds for social reforms have so far come from state oil revenues, rather than any transfer of wealth through higher taxes, and the nationalization of companies has been achieved by paying market price for stock market shares.

The question on the Venezuelan left is whether all this amounts to a transition to socialism, as Chávez and his supporters would have it.

For Orlando Chirino, a national coordinator of the National Union of Workers (UNT) labor federation, Chávez’s reforms herald the “Stalinization” of the state and state control of the labor movement “along the lines of the Cuban CTC labor federation,” he said in an interview.

Chirino, a key leader of the C-CURA class-struggle current of the factionalized UNT, is among the most prominent figures on the left to oppose the reforms. He made waves on the left when he granted an interview with a leading opposition newspaper and appeared on the platform with leaders of the CTV, the corrupt old trade union federation implicated in the 2002 coup.

Today Chirino, along with an oil workers union official, José Bodas, is a founder of a new group calling for an independent workers party.

Chirino’s and Bodas’ opposition to the reforms put them at odds with the majority of UNT national coordinators and organizers in C-CURA, such as Ramón Arias, general secretary of the public sector workers’ union federation, FENTRASEP. Arias is a supporter of the Marea class-struggle current of trade unionists in the PSUV, which calls for purging of employers, bureaucrats and corrupt elements in the new party.

Despite some criticisms of the centralizing aspects of the constitutional reform, including the new provisions for states of emergency, the Marea current has joined the majority of the Venezuelan left in calling for a “yes” vote to achieve social gains and defeat the opposition.

Arias and his C-CURA allies are already at loggerheads with prominent members of the PSUV, including Oswaldo Vera, a member of the National Assembly and leader of the Bolivarian Socialist Labor Front (FSBT), a faction of the UNT that also controls the ministry of labor.

The labor ministry refuses to negotiate a contract with FENTRASEP–which covers 1 million workers–because, it says, there is a dispute over union elections. As a result, many public sector employees are among the 73 percent of Venezuelan workers who earn the minimum wage–which, although the highest in Latin America, is still low in relation to the soaring prices caused by Venezuela’s rapid economic growth, to say nothing of enduring economic inequality.

Arias and other FENTRASEP leaders say that public sector workers are casualties of a larger factional struggle between the FSBT and C-CURA. This in turn is part of an internecine conflict that has prevented the wider UNT labor federation from holding a proper congress since it adopted a provisional structure at its founding event in 2003.

Now, C-CURA, the largest grouping in the UNT, is itself split over the PSUV and constitutional reform, which means organized labor’s voice is barely heard in the political debates of the day.

This sets the stage for a battle over the workers’ councils to be formed in the future, in which both factions of C-CURA expect to contend with an effort by the FSBT to exert control over the labor movement.

On the political terrain, the C-CURA activists of the Marea current inside the PSUV aim to make alliances with others on the left who have succeeded in being elected as spokespeople and delegates to the founding conference.

With the PSUV founding conference still in the future–it has been postponed repeatedly–it isn’t clear if, or how, such groupings will exist within the party, which already has a provisional disciplinary committee that reportedly expelled a prominent Chavista (the commissioners subsequently denied that this was the case).

Certainly the PSUV is a highly contradictory formation, and includes key members of the government apparatus and local elected officials who are unpopular among grassroots Chavistas. Marea’s slogan calls for a PSUV without bosses, bureaucrats and corrupt elements.

Whether the far left will be able to operate openly, be expelled or decide to leave to organize openly are open questions.

In any case, stormy weather is ahead, said Stalin Pérez Borges, a UNT national coordinator and supporter of the Marea current. Political polarization and class conflict, ameliorated in recent years by rapid economic growth, are unavoidable, he said.

“The constitutional reform marks Chávez’s consolidation of power, so the oligarchy can’t just wait for him to go,” he said. “Chávez wants to discipline and control the bourgeoisie. But they want to be in control themselves.”

During the October 30 Democratic presidential contenders’ debate, Clinton gave ambivalent answers about the issue. She supported the idea of offering driver’s licenses for immigrants without papers, but refused to specifically endorse the plan under discussion–a proposal by New York Gov. Eliot Spitzer to grant three different types of licenses the undocumented.

The following day, Clinton issued a statement backing Spitzer’s plan. But the mainstream media all but ignored how a high-stakes debate on driver’s licenses for the undocumented is playing out in states across the U.S.–and how the federal “Real ID” law passed in 2005 both discriminates against immigrants and serves as a back-door way to a national identity card.

In New York, Spitzer, a Democrat, originally proposed issuing standard driver’s licenses to all state residents who can pass the written and road tests. Then, under pressure from the right, he conferred with Department of Homeland Security (DHS) Secretary Michael Chertoff and announced an alternative–a three-tiered system of driver’s licenses.

“One license would be designed to meet still evolving federal Real ID requirements for boarding domestic flights and entering federal buildings,” a New York Newsday editorial explained. “The second could be used to cross into Canada without a passport. The third license, good only for driving, is the one that would be issued to undocumented immigrants who present a valid foreign passport and other, verifiable identification. Citizens and legal residents could also opt for this more restricted license.”

By running to Chertoff and Homeland Security for political cover, Spitzer has given new momentum to the Real ID law, which is being rejected by several state legislatures because of its great expense, complicated paperwork and encroachments on civil liberties.

Under Read ID states have until 2008 to upgrade efforts to verify the identity and immigration status of those who apply for a driver’s license that can be used as a form of identification for “federal purposes,” including interaction with federal agencies like the Social Security Administration, flying in an airplane and more. The law also allows “driver’s certificates”–licenses that have more limited use as identification or ones that can be used for driving, but not as valid ID.

If Spitzer’s plan goes through, the driver’s certificates will inevitably be seen by undocumented immigrants as a means to register them in a government database, which will discourage them from applying. Plus, simply holding the certificates will be seen by authorities as evidence of the carrier’s undocumented status.

That’s what happened in Tennessee, where, prior to the passage of the Real ID law, the state issued driver’s certificates for undocumented immigrants beginning in 2004. “[P]roblems, such as discrimination against certificate holders, are simply unavoidable given the nature of the document,” the Tennessee Immigrant and Refugee Rights Coalition reported in 2005.

Those who do qualify for Real ID driver’s licenses will have the dubious honor of receiving a de facto national ID card.

“Real ID poses serious privacy threats,” the ACLU stated in a press release earlier this year. “The federally mandated IDs would hold machine-readable data of every American. That information would be stored in a national database available to government employees at all levels, putting every American at risk of identity theft and security breaches.

“Ultimately, Real ID could pave the way for a society that tracks Americans’ movements and warehouses personal information in centralized databases that are rife with errors and highly enticing to identity thieves. Because Real ID promises to be such an integral part of our lives, from boarding a plane to opening a bank account to verifying your eligibility to work, a small glitch could have disastrous consequences.”

Bad as the Real ID law is, DHS has proposed rules for its implementation that are even worse for non-citizens, according to the National Immigration Law Center (NILC)–including an “irrational and incomplete” set of documents required to prove lawful immigration status.

“DHS does not even acknowledge that several groups of lawfully present immigrants are excluded from eligible categories,” a NILC report pointed out.

With Real ID under fire–Congress earlier this year rejected a $300 million appropriations bill to fund its implementation–Spitzer’s sudden embrace of the program is a big boost to Chertoff, the DHS and the Bush administration.

It’s telling that Chertoff, who’s presiding over the largest wave of immigration raids and deportations in decades, is willing to tolerate the issuance of driver’s certificates to the undocumented in New York. In return, he would get to entrench Real ID and its Big Brother apparatus in a large, immigration-heavy state.

Hillary Clinton’s waffling on this issue isn’t the result of a personal failing, but the Democrats’ contradictions about how to maximize their turnout of immigrant voters while avoiding right-wing opposition over the issue.

For example, John Edwards, who supported giving driver’s licenses to immigrants in the 2004 elections, now says it shouldn’t be done in advance of “comprehensive immigration reform”–translation: the creation of a guest-worker program.

This is the reality of the Iraqi refugee crisis. At least 4.1 million Iraqis have been displaced so far–and the situation is getting worse, despite the supposed success of the “surge” in U.S. troops to Iraq.

In a recent article in the Boston Review, journalist Nir Rosen describes the Iraqi refugees he met in the Syria capital of Damascus:

On a different street, I found three Sunni friends from Baquba. Firas had been shot a year earlier; his brother had been killed. He and Hamza had fled with their families to Syria one month earlier after Shia militiamen attacked their homes.

Ali had been in Syria for a year and a half. In Iraq, three of his uncles had been killed in front of his eyes and a cousin had also been murdered. “Because we are Sunnis,” he said, when I asked him why. “My school is gone. My father has no work. I’m never going back.”

Some 2.5 million Iraqis have been forced across the border into neighboring countries, mostly Jordan and Syria. Both countries are overwhelmed and recently moved to stop the flow of refugees.

As of September 10, Syria requires a visa for all Iraqis entering the country. Months earlier, Jordan restricted entry by requiring Iraqis to obtain residency permits or invitations issued for medical or educational purposes. Jordan previously tried to deny access to Iraqi men between the ages of 18 and 35. Expensive payments to smugglers or bribes are the only way around these obstacles.

But in spite of these harsh measures, Iraq’s neighbors have been far more generous to refugees than the U.S. or European countries.

Syria, with a population of just over 19 million, has allowed an estimated 1.4 million Iraqis free access to emergency health care and permitted Iraqi children to register for schools.

But only 35,000 of 250,000 school-aged Iraqi children attended school in Syria in the last academic year, according to UNHCR. Often, places in schools were simply not available. In many cases, children have to work in order to help support their families. And many refugees are isolated from aid agencies like UNHCR, which supply food aid and other support.

According to Amnesty International, a typical example is a woman who fled Iraq in July 2006 after her husband was killed by an armed group.

“I don’t have any income here, and all the savings I brought with me have been almost exhausted now,” she told interviewers. “My 12-year-old daughter and myself live in one room that we are renting from an Iraqi woman owner of the house, and we pay 5,000 Syrian pounds ($100) a month for this room. I don’t work, and no one is helping us.”

Such desperation has led to a rise in prostitution. Amnesty reported that “some Iraqi girls and women have been forced by their families to engage in prostitution to earn money to enable them to meet their daily needs, and there is concern that child prostitution and trafficking of Iraqi children is growing.”

Since the vast majority of Iraqi refugees aren’t permitted to work legally in Syria and Jordan–other than doctors, engineers and other professionals given special documents–many take menial jobs in the underground economy–for wages at least 30 percent lower.

Jordan, with a population of just 6 million, has absorbed an estimated 750,000 Iraqis. Most don’t have papers, which is tolerated by the government, but puts them at risk of deportation back to Iraq.

Amnesty International quoted a cheesemaker who fled Iraq with his wife and five children after his father was abducted, his brother killed and he himself was detained:

When we first arrived in Amman, the first three nights, the boys and I slept in the park. We just had one blanket. I just had $100 to live on–i.e., to pay for food and accommodation…I also now have to pay [visa overstay] fines for eight months…I am afraid that if the Wafidin Police stop me, we will be deported…My financial situation is below zero.

This man’s plight is common. According to a report by the UN-sponsored IRIN news agency, prices of housing and parcels of land in Jordan have increased by 300 percent since 2003. While wealthy and middle-class Iraqis can afford them, the vast majority cannot.

Moreover, Jordan didn’t allow nonresident Iraqi children to register for public schools until August 2007. Even so, many Iraqi families still haven’t registered their children–for fear of being identified as undocumented and deported.

Whatever criticisms can be made of the Jordanian and Syrian governments’ treatment of refugees, it is exceedingly generous in comparison to the locked-door policy of the U.S.

Between April 2003 and January 2007, the U.S. had resettled just 753 Iraqi refugees. The government promised to increase that number by 7,000 in the 2007 fiscal year, but recently admitted that only 1,608 had been resettled so far.

The Bush administration tried to change the subject by playing up financial support for UNHCR and other relief agencies. But Kristele Younes of the organization Refugees International says that the U.S. contribution–a new $100 million announced earlier this year–is tiny in view of the needs of Iraqi refugees.

“Since October 2006, the U.S. government has gone from denying that large numbers of vulnerable Iraqi refugees even existed to speaking openly of an ‘Iraqi refugee crisis,’” she wrote in May. “But its actual financial commitments are commensurate neither with the need nor with the U.S. role in creating the displacement crisis in the first place. The president and his war cabinet have yet to recognize the human toll the violence has been taking on Iraqi civilians and neighboring countries.”

Nir Rosen made a similar point. “This is not any other crisis,” he wrote. “It is an American-made humanitarian catastrophe.” Rosen noted that the International Organization of Migration issued an appeal for $85 million over two years, but has received less than half that amount.

For its part, the UNHCR has increased its budget for Iraqi refugees from $23 million to $123 million, and joined with UNICEF to try to raise $129 million for the education of Iraqi refugee children. But all this is a pittance compared to U.S. spending on war and occupation.

As grim as the plight of Iraqi refugees has become, the displaced who remain in Iraq often fare worse.

Numbering more than 2 million, according to the International Organization for Migration, these “internally displaced persons,” or IDPs, have either crammed in with relatives or friends, or live in camps and shantytowns on the edge of Baghdad and other cities.

The number of IDPs has nearly doubled since February 2006, when the bombing of a Shia mosque in Samarra led to an escalation in sectarian violence.

One of new refugees was Ahmed al-Timimi, a 39-year-old Shia tailor who lived with his wife and daughters in the Sunni majority area of Dora in Baghdad. One day, he found a note stuck to his door that read: “Leave, or else have your wife and daughters decapitated.”

He fled to a relative’s home in a Shia neighborhood, but his oldest daughter hasn’t been able to attend school. “What have I done in my life to lose my house and job and see my dream of building a happy family fade away?” Timimi told a reporter for IRIN. “Who should be blamed for all our misery?”

Many IDPs are too poor to make the journey abroad and become official refugees eligible for aid from UNHCR and charitable organizations–or have been stopped at the border by authorities of neighboring countries and turned back.

The only major non-governmental organization providing aid to the IDPs is the Iraqi Red Crescent Society (IRCS), which released a report in September detailing the scale of the problem.

A September 19 article in the New York Times summarized the IRCS’s findings:

In Baghdad alone, there are now nearly 170,000 families, accounting for almost a million people, that have fled their homes in search of security, shelter, water, electricity, functioning schools or jobs to support their families.

The figures show that many families move two or three times or more, first fleeing immediate danger and then making more-considered calculations based on the availability of city services or schools for their children. Finding neighbors of their own sect is just one of those considerations.

Over all, the patterns suggest that despite the ethnic and sectarian animosity that has gripped the country, at least some Iraqis would rather continue to live in mixed communities.

Raed Jarrar, an organizer on the Iraq refugee issue for the American Friends Service Committee, stressed that point. He argued that many IDPs end up in mixed neighborhoods, and can remain there if the sectarian groups don’t care about that particular area.

But if the U.S. carries out plans for what Washington insiders call a “soft partition” of Iraq, ethnic cleansing will increase enormously.

“It’s very ironic to see how the U.S. has allied itself with al-Qaeda,” Jarrar said in an interview. “Al-Qaeda and the U.S. support the same kind of political agenda, which is to split Iraq into three sectarian regions”–a Kurdish North, Shia South and Sunni central region.

Jarrar rejects the idea that the fighting among Iraqis is caused by ancient hatreds. “The basis of the ethnic and sectarian attacks are political,” he said, and are the direct result of U.S. support for the religious political parties that dominate the Iraqi government.

“It’s not that the Iraqi refugees and IDPs fell from the sky and we have to find a new home for them,” he said. “The majority of IDPs and refugees want to go back home. And the thing that is preventing them from going back home is that Iraq is unstable and under occupation. There is no way Iraq will be stable without a complete withdrawal of the U.S.”

Jarrar notes that the Darfur refugee crisis has attracted high-profile attention while the displacement of Iraqis is downplayed, if acknowledged at all.

“There is a displacement crisis in Sudan, but many specialists say the number is exaggerated,” said Jarrar, the son of an Iraqi and a Palestinian. “But the official number is less than half the numbers of Iraqis who have been displaced. Unfortunately, we don’t see big coalitions in the United States and Israel calling themselves Save Iraq, like Save Darfur.”

Jarrar points out that the U.S. spends $200 million a year on Iraqi refugees–while spending on the war in Iraq is $720 million per day. As he puts it:

The issue of refugees in Darfur and Sudan, while it’s a very tragic disaster, is not caused by U.S. taxpayers’ money. It makes me feel a little bit confused to see how people are more enthusiastic and interested in solving the situation in Sudan, and there is not much attention paid to refugees created by our own money. We are paying to kill and injure Iraqis and destroy their homes from our own salaries every month.

I can’t see why I would be more involved in stopping the Sudanese civil war than my personal and moral obligation to try to stop the Iraq war.

Speaking to the only audience likely to greet him sympathetically, the Veterans of Foreign Wars, Bush lectured, “One unmistakable legacy of Vietnam is that the price of America’s withdrawal was paid by millions of innocent citizens whose agonies would add to our vocabulary new terms like ‘boat people,’ ‘re-education camps’ and ‘killing fields.’”

Does Bush honestly believe anyone will buy this hogwash? That the aftermath of the war was worse than the war itself, when U.S. bombs, bullets and napalm exterminated millions? The U.S. would have stayed longer, too, if a growing rebellion within its armed forces hadn’t compelled the military brass to inform politicians that the war simply couldn’t be fought any longer.

As Marjorie Cohn, president of the National Lawyers Guild, pointed out, Bush “overlooked the 4 million Indochinese and 58,000 American soldiers who paid the ultimate price for that imperial war. And the myriad Vietnamese and Americans who continue to suffer the devastating effects of the defoliant Agent Orange the U.S. forces dropped on Vietnam.”

Even foreign policy establishment types were appalled by Bush’s speech–albeit because they fear Bush had managed to contaminate U.S. policy in the Middle East with the “Vietnam syndrome,” which limited popular support for U.S. intervention for decades after America was kicked out of Vietnam.

Anthony Cordesman, a former Defense Department official now at the Center for Strategic and International Studies, said Bush’s account “was history written by speechwriters,” adding that “I think most military historians will find it painful because in basic historical terms, the president misstated what happened in Vietnam.”

Washington Post columnist Jim Hoagland said the speech invites “examination of the mounting damage that Bush’s approaches to the war in Iraq and to national security in general are doing to U.S. institutions in an American society that has significantly changed since 1975,” the year the U.S. pulled out as North Vietnamese troops overwhelmed the U.S. puppet government in South Vietnam.

Of course, Bush’s intention was to blame the “killing fields” of Cambodia under Pol Pot, the murderous Stalinist dictator, on the U.S. withdrawal from Vietnam–and imply that similar violence would ensue in Iraq if the U.S. left.

But the fact is that Pol Pot was able to seize power in large part because the U.S. had fomented a failed right-wing military coup against the Cambodian monarchy. And not long after Pol Pot came to power, he became a secret ally of the U.S. and China to put military pressure on Vietnam.

The Cambodia analogy was too much for the Los Angeles Times editorial board. “Killing fields?” it wrote. “Iraq’s already got them: A dozen or two corpses are found dumped in the streets each morning, and bombs go off daily. Boat people? Two million Iraqis have already fled the country, and perhaps 50,000 more leave each month. Could it get worse? Absolutely. But can we stop it?”

However, the LA Times, like most mainstream media, glossed over who’s responsible for the vast majority of the killing in Iraq–the U.S., whose invasion caused at least 500,000 deaths according to a John Hopkins study that is now several years old.

The Media also ignored the other historical falsifications and distortions in Bush’s speech. For example, Bush equated the totalitarianism of imperial Japan and, later, the “communist” bloc with al-Qaeda today–as if the military threat of small armed groups are on par with some of the powerful states in the world in their day.

Then came the mythmaking about the U.S. role in the Pacific, which Bush portrayed as spreading democracy and freedom–first in the occupation of Japan following the Second World War, and next by waging war on the Korean peninsula to create a state allied to the U.S. in the South.

“[E]ven the most optimistic among you probably would not have foreseen that the Japanese would transform themselves into one of America’s strongest and most steadfast allies,” Bush said, “or that the South Koreans would recover from enemy invasion to raise up one of the world’s most powerful economies, or that Asia would pull itself out of poverty and hopelessness as it embraced markets and freedom.”

In fact, the U.S. “liberated” Japan by dropping two atomic bombs on it–entirely unnecessary militarily, but politically useful in sending a warning to the USSR, then looming as its main rival in the postwar world.

The U.S. occupiers of Japan suppressed militant trade unions and the left while fostering a corrupt political machine in the Liberal Democratic Party that has dominated the country ever since. Today, Washington is supporting the buildup of the Japanese military and a revival of right-wing Japanese nationalism in order to pressure China.

Bush’s other example of spreading democracy in Asia, South Korea, doesn’t pass the laugh test. Following the end of the Korean War in 1953, the country was an authoritarian U.S. puppet state, ruled by the military for long stretches. Democracy came to South Korea not because of the U.S., but in spite of it–because of mass strikes and protests in the 1980s that finally forced the regime to concede democratic elections.

Bush’s claims about “markets and freedom” conquering “poverty and hopelessness” in Asia are equally lacking in credibility. One decade ago, the East Asian economic “miracle” crashed, pushing millions into extreme poverty in Indonesia, Thailand and other countries. Today, two of the most dynamic market economies in East Asia aren’t U.S. models of liberal democracy, but the one-party states of China–and Vietnam.

Nevertheless, there is a connection between the U.S. war in Iraq today and its battle over domination of the Pacific with Japan, the Korean War and the Vietnam War. Whatever their ideological window dressing or popularity, all of these wars were waged to extend or consolidate U.S. imperial power.

One of the main political difficulties for Bush in selling the Iraq war has been to give it the ideological coherence of the “good war” against Germany and Japan or the Cold War against the USSR and its allies.

But re-fighting the war in Vietnam–rhetorically, of course, since Bush avoided actually going there–hasn’t helped him.

The hostile response to Bush’s speech should have been another nail in the coffin of his Iraq policy–now rejected by 75 percent of the country–on the eve of the September report by military commanders on what has taken place since the “surge” of U.S. troops announced at the start of the year.

Instead, the Democrats are letting Bush get away with recycling the same lies that presidents used to prolong the war in Vietnam. Bush talks about the surge producing “success on the ground,” “tactical momentum,” and yes, a “turning point”–and the Democrats back away from withdrawal proposals to embrace “success” in Ramadi, as Hillary Clinton would have it.

“The sad fact is that this war has created stasis in American politics,” wrote Washington Post columnist David Ignatius. “If Bush doesn’t budge, he is likely to be able to continue his approach–even if a majority of the country has turned against it and even if there is no political reconciliation in Iraq.”

This is because while Bush’s Iraq policy may be unpopular, the wider aims of the war–greater U.S. control of Middle Eastern oil–are shared by both political parties.

All this underscores the importance of the real lessons of Vietnam: that the mightiest occupying imperial army cannot subdue a nationalist resistance forever, and that to be effective, the antiwar movement in the U.S. must mobilize independently of the politicians, and build within the ranks of the military itself.