Jan 042015

onaschoutsmall  by Bill Onasch

Let the Good Times Roll
The stock market is soaring
the gasoline is cheap
the job market is roaring
from inflation not a peep

Sorry, I’m not a poet and I know it, but I couldn’t resist a little quatrain spoofing of the mass media end of year optimism hailing the robust American economy. A recent AP story opened,

“The United States is back, and ready to drive global growth in 2015.”

Like in any good hustle, there are grains of truth in the Let the Good Times Roll pitch I parody. But unless you are in the One Percent the promised return of Happy Days is probably more sizzle than steak or soy.

The stock market alternate universe is a poor indicator of the health of our reality.

That roar in American quality job creation is as mighty as that of the Peter Sellers cinematic duchy of Grand Fenwick. High tech Sprint is in the midst of mass layoffs and it’s uncertain whether the telecommunications giant will survive. In the public sector, the Washington Post reported on New Year’s Eve,

“The U.S. Postal Service next week plans to begin a new round of plant closings and consolidations that will affect dozens of mail-processing centers, despite calls from more than half the members of the outgoing Senate to postpone the changes.”

Even the New York Times has taken their past downsizing of production and distribution workers to the next level in the news room with a combination of buy-outs and pink slips.

Nor are American corporations doing much to overcome anxiety about a triple dip recession in Europe. Reuters said on December 21,

“Two car plants closed this month as companies sought cheaper labor elsewhere…The final production day at Ford Motor Co’s plant in the eastern Belgian city of Genk came barely two weeks after General Motors closed its Opel Bochum factory across the border in Germany”

These closings affected more than 10,000 workers.

There has never been more emphasis on the necessity of a college degree to get a decent job and never has there been a better educated generation than the so-called Millennials—those currently age 18-34. But Census Bureau reports show even fewer Millennials are gainfully employed at all than the same age group during the stagflation days in 1980. And twenty percent of them today are living in poverty—many with crushing student loan debt.

The official inflation rate has remained low and stable. But it doesn’t adequately reflect sharp rises of such necessities as food and health care. Part of a national trend, Kansas City Power & Light is seeking approval of big hikes in utility rates—15 percent in Missouri, 12 percent in Kansas. Only presently cheap gasoline is a hardy motivation for exuberant expectations.

The serendipitous plunge in oil prices superficially resembles the frequent Gas Wars back in the Fifties when I started driving. During the “Wars,” pump prices sometimes sank below twenty cents a gallon and full service filling stations lured customers by offering premium gifts—such as sets of then popular aluminum tumblers that my Mother fancied for cold beverages on a hot summer day. There were two components to that price strategy.

* The top echelons of the ruling class understood cheap gasoline was essential to fulfilling their postwar master plans of Urban Sprawl and Car Dependency. For decades, American fuel prices were less than half of those in Europe and Japan.

* The free market competition of fifteen or so major oil companies fifty years ago meant slim profit margins. The biggest and most ruthless were prepared to sell their product below cost for long stretches to drive the weakest in to favorable mergers—or out of the market. Today just five major players—Exxon/Mobil; Conoco/Phillips; BP/Amoco; Chevron; and Shell—command the lion’s share and can call the shots.

With more registered vehicles than licensed drivers, the need for the original goal of cheap gasoline long ago went the way of full service and aluminum tumblers. Ever since OPEC was established in the Seventies oil prices have, with ups and downs, climbed.

It was predictably high market prices that led to the introduction of hydraulic fracturing—fracking–to extract oil from once unprofitable shale deposits. Led by the fracking boom in North Dakota, within a few short years domestic production began to match consumption and it looked like America might become a net exporter of oil and refined gasoline.

The current price depression is a different kettle of piranhas than the domestic Gas Wars of the Fifties. It comes from global competition. Russia, heavily dependent on export of fossil fuels, has denounced it as an American plot to undermine them. But this isn’t another example of Cold War redux. Evidence points to the real culprit—Saudi Arabia.

The Saudis have become increasingly concerned about the “energy independence,” and export potential, of the USA due to fracking. The last time the Saudis did battle with America they led OPEC in sharply reducing oil supplies. This forced unpopular conservation measures of gasoline rationing and imposition of a national 55mph highway speed limit. OPEC won that contest of endurance.

Today the Saudis are taking an opposite approach. They seem prepared to continue to offer their benchmark light sweet crude at bargain prices the frackers can’t profitably match. This flip side of the Seventies Oil Shock has to be seen as a major destabilizing worry for both American and Russian capitalists.

For now at least, a large part of the working class has more discretionary money to spend because of the free fall in pump prices. This can be a boost to consumer spending. Since I can’t afford a Tesla, I too may gain some chump change. (Of course, there are millions of urban poor who don’t have a car. They get no more benefit from fuel bargains than they do from low capital gains tax.)

But there are countervailing factors that should dampen our enthusiasm for even this ballyhooed win-win. The petroleum that fuels and lubricates cars, trucks, farm equipment, motor boats, recreational vehicles, and those ubiquitous dirty two-stroke lawn mowers, is a prime source of greenhouse emissions causing global warming–as well as a host of other deadly forms of air pollution. Fracking adds even more nasty results to the mix. Science and common sense tells us we need to find alternatives quick–and leave the oil in the ground. Lower prices that can stimulate greater oil consumption is in fact a lose-lose proposition for working people—and all humanity.

The bizarre, likely temporary twist of cheap oil exposes yet another colossal failure of global capitalist markets. To protect our class interests, not to speak of our biosphere, we need to take control of the entire energy and transportation industries through nationalization and restructure them through planning under worker management. Our future depends on converting to clean, renewable energy and greatly expanding electric powered passenger and freight rail and urban mass transit. As we do that we will create good jobs for all who want them here—and truly spur global sustainable growth as well.

In Case You Missed Them…
There were some perceptive year-end retrospects published during my holiday break including,

Organized Labor — Year 2014 in Review in the NorthWest Labor Press
Deep Trouble But Stirring Troublemaking by Jenny Brown, Labor Notes
Dangerous year for journalists as 2014 death toll reaches 60 in The Guardian
The Year in Inequality: Racial disparity can no longer be ignored Aljazeera America
The Strategic Significance of the Fight for $15 Common Dreams

Thanks For a Job Well Done
Robin Alexander has retired after 27 years of service with the UE, first as General Counsel and then for the last couple of decades International Affairs Director. The latter post plays a far different role in UE than in most unions. There’s no coordination with the State Department and CIA, or promoting sale of Israeli bonds, as has been the case in too many labor bodies.

The UE has focused their international work on global worker solidarity. They have a formal alliance with the Frente Autenico del Trabajo (FAT), an independent union movement in Mexico. Even though there is no UE presence here, Cross Border activists in Kansas City have received much assistance from Robin on her watch. She will be missed.

Leah Fried, who played a prominent role in the sit-down strike at Republic Windows in Chicago a few years ago, is the new International Affairs Director. Best wishes to both old and new in this changing of the guard.

Paid Up For Fifteen
I’m not likely to make 27 years as webmaster of kclabor.org but 15 is coming up soon. I was reminded of this this morning when I got a confirmation from PayPal that my recurring expense for web hosting has been paid up for another year. March 8 will be our actual fifteenth anniversary online—a long life for a labor oriented site with no institutional or advertising support.

We will probably have some low key celebration in March. In the meantime if any of you have any kind words about this project that you wouldn’t mind saying in public your greetings would be most welcome. If you have any spare change left over after the barrage of year end fund appeals from worthy causes donations are also appreciated.

Tomorrow, January 5, daily news link postings will resume on our companion Labor Advocate blog.

That’s all for this week.


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Bill Onasch is a paid up NWU member

Bill Onasch is a paid up NWU member

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