Guns v. Butter

In Mohammed Lakhdar-Hamina’s Chronique des Années de Braise (1975), a film which won the Palme d’Or, a crazy prophet emerges from the city to greet a horde of bedraggled peasants. He extends his arms and says, “You were poor and free. Now you are only poor!”

In my hometown, Bill Fabriocini (age 59) decided to avoid the humiliation of homelessness. “I’m not going to stand on the sidewalk and bum quarters and sleep in alleyways,” he told my local paper, the Daily Hampshire Gazette. Fabriocini, a fixture in town, who had a habit of running his shopping cart down the center of several busy streets, had been harassed by the city housing authority for accumulating cans and bottles in his apartment and its landing. The city evicted him, and he decided to take things in hand. Fabriocini threw a brick through a plate glass shop window, waited to be arrested and now lives in the local remand home. “The people have treated me good here,” he said, and his jailer complained, “It’s a very expensive way to take care of homelessness.”

Rancid Butter

On Friday, June 19, the Bureau of Labor Statistics released a stealth report. The media hastily buried it. The actuarians of joblessness zeroed in on the regional disparities, with the West showing the highest regional jobless rate (10.1%), and the Northeast with the lowest (8.3%). Both the Old Economy (Michigan is at 14%) and the New Economy (Silicon Valley is at 11.2%) were struck with the global financial flu. The national rate is now 9.4%, 3.9% higher than last year. No vaccine is in sight.

The Geneva-based International Labour Organization (ILO) estimates that this year around the world between 210 and 239 million people will be unemployed, making for a global unemployment rate of about 7.4%. These numbers are routinely low, since they are unable to properly capture the unemployment and under-employment in the informal economy, which is now on the rise. Alarmed by these figures, the ILO called for an International Labour Conference in early June, where the 4,000 delegates from 183 countries adopted the Global Jobs Pact. There is little new here, more pressure on firms to retain employees, more public finance for infrastructure, and more security for women workers who are often the first fired (although in the current U. S. layoffs men have been most vulnerable). The Pact went after the casino finance industry, calling for the construction of a “stronger, more globally consistent supervisory and regulatory framework for the financial sector, so that it serves the real economy, promotes sustainable enterprises and decent work and better protects the savings and pensions of people.” As with much that happens at the ILO, it carried no weight with the G-7, where labor issues are considered infra dig.

In May 2009, the banks foreclosed on 321,480 homes in the United States. That brings us to about a million homes seized by banks between March and May alone, with several million people joining the ranks of the homeless in the process. The numbers have not abated. In the wings flutter the “son of the subprime,” the adjustable-rate mortgages (ARM), a $230 billion market that would bring a new wave of foreclosures if the interest rates rise. What we have is not a recovery in the housing market, as many analysts seem to want to suggest: at best, the slide downward has produced an L-shaped curve, with the numbers now bouncing along on the bottom axis, in a kind of gentle decline after a speedy descent (i. e. till the ARM collapses). The Senate (in May) defeated a measure that would have allowed bankruptcy judges to help homeowners to reduce their principle and lower the interest rates, and so prevent foreclosure (what is called “cram-down”). The measure would have prevented 1.69 million foreclosures. David Kittle of the Mortgage Bankers Association preened, “We led the way on this and we are clearly responsible for defeating this.” There is a technique to this unsettlement. It has produced its dialectical opposite in groups like Southside Together Organizing for Power (Chicago), the Toledo Foreclosure Defense League, Moratorium NOW!, and Take Back the Land (Miami).

In Rome, at the Food and Agriculture Organization’s headquarters, UN official released sobering numbers on Friday, saying that the world’s hungry will top 1.02 billion this year. FAO Director-General Jacques Diouf has spent his entire career on food issues. Whether working on groundnut or rice or agriculture or hunger, Diouf has been a thoughtful champion of the problems of food and starvation. While releasing the recent report, Diouf could not contain himself, “A dangerous mix of the global economic slowdown combined with stubbornly high food prices in many countries has pushed some 100 million more people than last year into chronic hunger and poverty, The silent hunger crisis — affecting one sixth of all of humanity — poses a serious risk for world peace and security.” In 2008, food riots struck Burkina Faso, Cameroon, Egypt, Haiti, Indonesia, and the Philippines. Vietnam, India and Pakistan have banned the export of grain, worrying about food security, while food importers like Indonesia, Korea and Mongolia have slashed import tariffs. The FAO expects more of the same this year, and for the years to come.

The April G-20 meeting in London offered platitudes, but no platform for a renewal. The fattened calves were more interested in protecting the interests of their transnational firms, for whom “protectionism” is as nasty a philosophy as socialism. No redress to suffering unless the banks are first taken care of, or as the communiqué put it so elegantly, “Our actions to restore growth cannot be effective until we restore domestic lending and international capital flows.” The commitment to growth as the means to equity remained stable. No outlay for the hungry or the homeless; the only outlay would go to the banks. No surprise then that the U. S. administration allowed Peter Defazio’s bill (Let Wall Street Pay for Wall Street’s Bailout Act of 2009) to wither on the vine (all it asked for was a 0.25% transaction tax on the market in financial instruments such as options, stocks and futures, a kind of domestic Tobin Tax).

Well-oiled Guns

One of the grotesque canards of our period is that government’s are broke. They can’t tender food and shelter, let alone jobs, because they simply have empty exchequers. This is a falsehood. The problem is, as it was, a matter of choices. Consider that during the entire collapse of the world financial system, none of the countries took their red pens to their military budgets. The Stockholm International Peace Research Institute’s 2009 handbook shows that in 2008 the world spent $1.5 trillion in weapons, up 4% since 2007 and 45% since 1999. As it released the report in June, SIPRI commented diplomatically, “The effects of the global financial crisis will be likely to exacerbate these challenges as governments and nongovernmental organizations struggle to respond effectively.” I suspect what they mean is that governments will continue to tip their hats to the weapons industry as they squeeze the human services section entirely. Down the street from where I live in Northampton, MA., is the National Priorities Project ( <> ), whose analysis shows us that 37.3 cents of every dollar paid in tax for 2008 goes to the military. Again, there is little sign of reduction. The F-22 will more likely find itself on the conveyer belt than the high-speed trains California dreams of.

The World Prison Project’s latest numbers show a steady increase in incarceration around the planet (9.8 million are in penal institutions, or 145 people are in jail for every 100,000; in the U. S., the world’s largest incarcerator, the rate is 756 per 100,000). Figures for expenditure on world police forces are hard to come by (the US alone spends $214 billion on the police). Local governments have increased their commitment to criminal justice by 422% between 1982 and 2006. There is no abatement of the trend, despite the financial meltdown. My town almost went ahead with plans to build a new $18 million police station at the same time as it was going to shed teachers and social workers. Inability to raise an additional $4 million, thankfully, stopped the move, and an additional tax increase on the citizenry (voted in by a majority) will preserve the school’s integrity.

A House of BRICs?

The leaders of Brazil, Russia, India and China (BRIC) met in Yekaterinburg, Russia for their first major summit in late June. They met where the Bolsheviks put paid to the Tsar’s family, and ended the possibility of a restoration. The symbolism might have led one to believe that BRIC would decapitate the G-7, and produce a new multi-lateral order. That was a failed hope. Brazil’s Minister for Strategic Affairs, Roberto Mangabeira Unger told the press, “Everyone is concerned about the delicacy of the issue. No one wants to say things or do things that would increase volatility in the circumstances of the crisis.” With kid-gloves, the leaders pledged their faith in the broad rules of the international political economy, asking only that the G-7 adopt one of them into the club, since “the emerging and developing economies must have greater voice and representation in international financial institutions.” This is of course a correct, democratic demand. But it is insufficient if these “locomotives of the South” are simply the new gendarmerie of the same old world order. Russia did raise the question of the dollar, threatening to push for a new reserve currency, a call that hastened the fall of its value in the currency markets. The final communiqué, however, backed away from these alternatives and took refuge in the more modest call for a “stable, predictable and more diversified international monetary system.” On his way home, Indian Prime Minister Manmohan Singh told journalists that the central banks of the four countries would study the problem of the international currency (the replacement of the dollar by the IMF Special Drawing Rights or some other mechanism), keeping the issue alive, slyly.

We return to the orchestrated policy of the Trilateral Commission, which responded to criticism from the Third World in 1976 with the hope that a new “international middle class” would emerge to squelch the rabble from below. Japan had entered the club in 1962, and the Trilateral turned its sights on Iran, Brazil, Mexico and Saudi Arabia (Iran would become a bit of a problem in 1979, and Mexico decided to go into a terminal debt spiral). The new claimants are the BRIC, whose fight has a limited democratic content (multilateralism), but with no significant alternative to the current mal-order. Singh told the press that the BRIC countries “are responsible for 40 per cent of global output and population. If all these countries act together in concert, their voice will be heard in the global councils.” What are these “global councils”? Are they the United Nations’ General Assembly or the cabinets in Washington, London, Bonn and Tokyo?

BRIC can carry some water toward drowning the G-7’s policies, but not enough. Sporadic protests from people’s movements also have their buckets in hand. What we lack is sufficient ideological clarity, and agreement on a program of action to bring forth a new dispensation. Till then, the crazy prophet, the G-7, emerges from the shadows, greets Bill Fabriocini and his tired comrades, and says, “You were poor and free. Now you are only poor!”

Vijay Prashad’s most recent book (with Noam Chomsky) is The Withdrawal: Iraq, Libya, Afghanistan and the Fragility of US Power (New Press, August 2022).