Week In Review

A Weekly Column by Bill Onasch
August 24, 2009

Market Solutions–Nothing New Under the Sun
The single most important potential alternative to the use of fossil fuels now destroying our biosphere is solar power. Harnessing and distributing this powerful, clean, renewable source could allow us to maintain a quality–though altered–lifestyle while stopping further irreversible damage from greenhouse gas emissions.

The most progress in this area has been in Europe, especially Germany and Spain. Fueled with government subsidies corporations have made solar a significant component of energy generation-- though still far short of what is needed. The German solar industry until recently had created 75,000 “green” jobs. There is even a stock index in Frankfurt nicknamed “SunDax,” charting the financial progress of the booming industry.

But now two big factors have hit this industry once considered “recession proof.” The Spanish government eliminated subsidies for solar panel installations–which had been growing at an annual rate of 200 percent–and that market has largely dried up.

But much more importantly, China, who has become the most polluting nation of all in volume of greenhouse emissions, is rapidly expanding production of solar cells. This should be good news. But, like it does with almost everything it touches, the global capitalist market has fouled this up as well.

Chinese solar cell factories are not producing for the China market despite the obvious desperate need there. Driven with the zeal of the recently converted, the Chinese capitalists aim to maximize their bottom line by taking on the Germans in competition for where the big bucks and Euros are. Agence France-Presse reports,

“Germany's solar power industry, until recently the world leader in the technology, is facing an unprecedented crisis, analysts say, outshone by cheaper competitors from Asia, most notably Chinese firms. Q-Cells, the world's biggest solar cell producer, last week issued a far from glowing set of results, with losses of 700 million euros (984 million dollars) in the first half of the year. As a result, the German firm said it would cut 500 jobs from its workforce of 2,600 and put others on part-time working arrangements.”

Q-Cells is far from alone. Many companies on the SunDax have lost as much as thirty percent of their value over the past year.

China is gaining not because of any technology breakthroughs; they use the same methods developed initially by the Germans. The secret of Chinese success, as noted by AFP,

“Chinese solar power companies are able to produce cells much more cheaply, due to lower labour costs and also the plummeting price for silicon, the raw material for solar cell manufacture. Whereas German firms are tied in to long-term contracts for silicon deliveries, Chinese firms have been sourcing it from the spot market, where the price has dropped by around 70 percent in the past few months.”

In response, the SunDax capitalists are now beginning to follow other manufacturing to China, and even lower cost locations in south Asia, in new plants or joint ventures. Any increase in actual solar power installation as a result of this teaming up with China will be marginal. The main impact will be elimination of tens of thousands of good “green” jobs in Germany, replaced with low wages and miserable working conditions in Asia.

To expose this new stage of globalization is not China-bashing–though there is much of that going around even among those campaigning in the USA for “green” jobs. Television ads by Repower America, a project of Al Gore and the Blue/Green Alliance, urge contacting congress in support of subsidies for “American” companies so the green jobs don’t go to China.

The idea of international competition in this industry is ludicrous. The climate change crisis demands global collaboration to put as much solar power online as soon as possible everywhere. There’s more than enough needed work for everybody. But clearly this will not be done through the markets based in Frankfurt, Shanghai, and Wall Street.

Unfortunately, this was not the only bad news on the environmental front this past week. Here are just a few examples:

• The Obama administration gave approval to the 989-mile “Alberta Clipper” pipeline running from the environmental disaster “oil sands” in Canada through North Dakota, Minnesota, terminating at the Lake Superior port of Superior, Wisconsin. A coalition of environmental and Native American organizations plan to challenge the deal in court.

• An example of capitalist-era neglect of infrastructure built by the Soviet Union turned deadly with a partial breach of the giant Sayano-Shushenskaya hydroelectric dam in Siberia. There are conflicting reports on fatalities but the usually reliable Guardian set the number at seventy. The plundered dam’s cheap electricity attracted the largest aluminum plant in the world–now scrambling for power–but little in resources for repairs and maintenance. Leaking oil devastated a trout hatchery downstream.

• The New York Times reported, “When government scientists went looking for mercury contamination in fish in 291 streams around the nation, they found it in every fish they tested....Emissions from coal-fired power plants are the largest source of mercury contamination in the United States. A quarter of the fish studied had mercury levels above safety levels set by the Environmental Protection Agency for people who eat the fish regularly.”

• A second Chinese smelter in a month has been shut down after positive tests for lead poisoning were found in hundreds of children living nearby.

I recall people at the first Earth Day events carrying signs reading, “capitalism fouls things up.” The only needed modification of that observation today is global capitalism fouls things up globally.

In Brief...
¶ Hats off to the 850 members of IAM Local 1947 who overwhelmingly rejected Mercury Marine’s demand to open their existing contract for draconian take-backs. The company’s “final offer” at their Fond du Lac, Wisconsin plant would have eliminated previously negotiated wage increases, gutted pensions, and would have established a second tier for not just new hires but any presently laid off workers recalled. The company demand was accompanied by the threat to move the work to an unorganized plant in Stillwater, Oklahoma. Perhaps the Fon du Lac workers absorbed the lessons of the futility of trying to save jobs through give-backs–as in auto for example.
¶ The New York Times reports, “With the economy faltering and property values plunging, homeowners and landlords are falling behind on their bills or abandoning their property, just as governments are facing huge budget shortfalls. Private investors step in and buy tax liens, paying governments upfront all or part of the value of the taxes. The investors then get the right to foreclose on the properties, taking priority over mortgage lenders, and to charge interest rates as high as 18 percent on the unpaid taxes.” These are not shoe string operations. The biggest is a subsidiary of JPMorgan and has foreclosed on two billion dollars worth of properties over the last year.
¶ I paid particular attention to this AP dispatch on Sunday, “Millions of older people face shrinking Social Security checks next year, the first time in a generation that payments would not rise. The trustees who oversee Social Security are projecting there won't be a cost of living adjustment (COLA) for the next two years. That hasn't happened since automatic increases were adopted in 1975.” The shrinking comes from increased premium deductions for Medicare Part B.
¶ My old friend Judy Ancel, director of the Institute for Labor Studies, was part of a Global Exchange delegation to Honduras that has produced a report which can be read by clicking
¶ Kansas City Labor Against the War will hold a meeting to plan fall activity next Sunday, August 28, Noon, at 2113 Erie, North Kansas City. For more information call Tony at 816-221-3638.

As usual, most of the material for this column came from stories posted on the Daily Labor News Digest.

That’s all for this week.

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