Obama averted a government shutdown on April 8 by brokering a flimsy budget compromise between two increasingly hostile camps of U.S. capitalists.

One is composed of imperialists who need ever-expanding and more costly U.S. wars. This faction’s power and wealth depend on forcibly reasserting its once almighty control of the world’s energy trade. Until 1975, Exxon, Mobil and Chevron — descendants of John D. Rockefeller’s Standard Oil colossus — (along with ally Texaco) legally owned all of Saudi Arabia’s unsurpassed oil reserves. But today, rival oil and gas barons in China, Russia and Iran, unrest in the Arab world, and al Qaeda threaten the empire headed by U.S. flagship Exxon Mobil.

So, from Libya to Afghanistan, the U.S. war machine seeks to rescue the Rockefeller-Exxon wing of U.S. capitalists, at a cost of trillions of workers’ tax dollars; 27% of everyone’s federal taxes go to pay for these wars, which consume more than half of the Federal Budget.

On the other side of the split stand smaller, domestically-oriented bosses like oil billionaires Charles and David Koch, who consider war taxes an unnecessary burden. They rally popular support by bankrolling the anti-tax Tea Party. Koch Industries’ big new project, a proposed 900,000 barrel-per-day pipeline from Alberta, Canada, to Texas won’t require paying one dime for a single aircraft carrier, bomber or soldier. By contrast, Exxon’s newfound gushers in Iraq [see box] help explain why U.S. “Defense” chief Gates “suggested that American troops could remain [t]here for years.” (San Francisco Chronicle, 4/10)

Each side in this ruling-class divide, highlighted by the budget battle, employs think-tanks to organize opinion among fellow capitalists and mislead the working class. The Cato Institute, founded and funded by the Kochs, decries the U.S. invasion of Libya; calls for halving the Pentagon’s financing; and supported the government shutdown Obama sidestepped. The U.S. war machine does relatively little for the Kochs and allied minor-league bosses.

Thus, Cato fellow Doug Bandow complains, “Most American military forces are busy doing tasks which have no recognizable connection to U.S. security.” (Forbes, 4/4) But the far more influential Rockefeller-led Council on Foreign Relations (CFR) has the opposite take. CFR big shot Larry Diamond called U.S. military intervention in rebellious Arab lands a matter of life and death for U.S. imperialism: “It’s an existential challenge for the United States, because our interests in the region are so profound.” (CFR website, 4/8)  The CFR cloaks Obama’s Mideast-North Africa oil grab with the liberal fig leaf of “humanitarian protection.”

Saudi Oil Treasure Is Imperialists’ Grand Prize

Holding onto Exxon’s reshaped but still sweetheart Saudi deal forms the core of U.S. strategy relative to the “Arab Awakening.” Exxon now enjoys first dibs on crude oil from the nationalized Saudi Aramco outfit at undisclosed contract prices far below the current going rate of well over $100 per barrel.

When the Saudi royal rulers “seized” the Rockefeller companies’ holdings in 1975 — with oil selling for $13 a barrel — they were assured “access to seven million barrels per day...at the rate of 47 cents per barrel.” (“Oil, God, and Gold: the Story of Aramco and the Saudi Kings,” Anthony Cave Brown, 1998). With figures adjusted for price rises and Chinese encroachment on the U.S. share, this racket still endures.

That’s why Obama, while backing pro-U.S. “rebels” in Libya, Egypt and Tunisia, endorses Saudi-backed “shoot-the-protestors” actions in Yemen and Bahrain. They both border Saudi Arabia. Obama’s recent $60-billion arms sale to the kingdom cements both Washington’s status as Saudi Aramco’s military overlord — dependent on U.S. weaponry — and Exxon’s status as its especially favored partner. However, when market conditions force Koch to buy Saudi oil, he pays prevailing prices.

The liberal war-making Rockefeller wing needs an all-out purge of imperialism-thwarting businesses like Koch as well as a mass, liberal, pro-government, ideological civil war against the Tea Party. But they can’t pull off either yet.

Ex-New York governor Eliot Spitzer tried to force the imperialists’ war agenda throughout Wall Street. But some bankers — more focused on their bottom line than on “sharing sacrifice” to counter China and other imperialists — torpedoed him.

Meanwhile, the rulers face a contradiction: On the one hand, capitalists cut workers’ services to make the working class pay for the current economic crisis. But this severely reduces their ability to win these same workers’ loyalty to Washington’s war agenda.

Headed for World War III, U.S. Rulers Need ‘Roosevelt 2’; But Obama’s Not Achieving It

In The Great Depression, President Roosevelt carefully constructed a host of federal job programs such as his Works Progress and Civilian Conservation schemes which — along with his concessions to mass (communist-led) working-class struggle for Unemployment Insurance, Social Security and the 40-hour week — won a great deal of worker support that U.S. rulers needed to eventually wage World War II.

Presidents Kennedy and Johnson tried similar policies — a militaristic “high-tech jobs” space program in response to the Soviet ‘Sputnik’ (the first shot into space); Medicare and voting rights for black people in response to the Civil Rights struggle. However, they had far less success for the cold war against the phony “communist,” but anti-U.S, Soviet empire. And their efforts eventually failed to win backing for their war of aggression in Vietnam.

Obama, faring even worse, has yet to come up with anything to mobilize the working class for the wars the rulers’ dominant imperialist faction must prepare to wage against Iran, China and Russia. Al Gore’s liberal environmentalism didn’t quite succeed in winning masses to government service. So Obama, or his successor, must find another smokescreen for imperialism.

There exists, nevertheless, a viable but demanding course for workers against worsening ruling-class-enforced war-making and cutbacks. It lies in relying neither on liberal/imperialist nor Tea Party politicians but on our class alone. Exposing the profit motive of both capitalist factions’ attacks on us — on the job, in schools, neighborhoods, universities, among rank-and-file GIs and in every mass organization we work in — can help build a mass base for our revolutionary, communist Progressive Labor Party. We have the long-term outlook of forcibly replacing the bosses’ unceasing wars and repression with rule by the working class in our own class interest.J

Two Million Iraqi Lives, 5,000 Dead GIs Reap Profit Bonanza for Exxon

When Exxon invests in Iraq’s oil, its government pays Exxon $1.90 for every barrel Exxon pumps out of the ground. But it costs Exxon far less to pump that oil. Nominally the oil Exxon gets from Iraqi soil belongs to the Iraqi government. But the 2010 “Entitlement” program forces Iraq to sell the lion’s share of that oil to Exxon and to British firms Shell and BP.

This would be at a price far lower than the current potential $120-a-barrel, as well as less than Iraq sells to other imperialists. This enables Exxon to make fabulous profits. And Exxon’s Iraqi oil fields have enormous potential. The West Qurna field’s yield alone could soon out-produce that of entire oil powerhouses like Venezuela, Kuwait and Nigeria.

So the invasion of Iraq enabled Exxon to gain these enormous profits over the dead bodies of two million Iraqis and 5,000 dead GIs.



NEW YORK CITY, April 7 — The hall was packed with 2,500 New York State United Teachers (NYSUT) delegates, many from districts plagued by budget cuts and layoffs. Usually soft-spoken union President Ianuzzi opened the assembly by leading chants of, “This is what democracy looks like!” and “We are all Wisconsin!” But Ianuzzi & Co. have no plans to lead workers in fighting back.

He proudly showed pictures of himself speaking in Wisconsin but New York labor leaders did not organize the rank and file to support that struggle. When he reported that 180,000 NYSUT workers (one-third of the membership) from Buffalo to NYC were working under long-expired contracts, someone yelled, “Well, what are we going to do about it?”

The main speakers at the convention and at a Saturday outdoor rally spoke about the rich getting richer and the poor getting poorer but made no criticism whatsoever of billionaire Mayor Bloomberg or millionaire Governor Cuomo! 

A weekend highpoint was a workshop, “From Wisconsin to New York — Building the Struggle,” organized by the American Federation of Teachers Peace and Justice Caucus. The main speaker, a teaching assistant from Madison, Wisconsin, gave a detailed report about the attacks Wisconsin public workers faced and how they organized the occupation of the Capitol.

Two NYC school workers reported how parents, teachers and students were fighting the privatization of public schools, noting its racist nature, given that the students were overwhelmingly black and Latino and suffering disproportionately from these attacks.

The next panelist made a systemic analysis of the crisis of capitalism. She explained how both the Democratic and Republican parties were enemies of working people and warned that organized national campaigns attacking unions could pave the way for fascism.

At the Saturday street rally delegates were joined by thousands of other workers, NYSUT rank-and-filers and members of other unions as well. The crowd was militant and ready to fight but clearly the”leadership” is not going to lead a fight against capitalism — they’re part of that system. While Wisconsin Governor Walker aims to eliminate collective bargaining and unions entirely, governors like Cuomo here want to retain the unions as long as they’re led by phonies who hold workers back.

The only speech at the rally which had any analysis and substance was from a leader of CUNY’s Professional Staff Congress who described the harsh effects of the cuts and explained their racist and sexist nature. CUNY’s student body is pre-dominantly black, Latino, and Asian and they are taking the brunt of these cuts while most of the budget is paying for wars, not workers’ needs.

PL members distributed CHALLENGE at the Peace and Justice forum and at the outdoor rally. We could have had mass distribution inside the convention and issued a special convention leaflet similar to efforts at national conventions. The workers are open to communist ideas and we’ll do a better job next time. 

SAN FRANCISCO-OAKLAND BAY AREA, April 9 — “I really don’t have a problem raising the price of the youth pass.” These were the words of one of the AC Transit Board of Directors last month, as they discussed a range of plans to raise bus fares. How insulting! These are the bus passes that kids need to get to school!

The bus already costs $2 a ride, plus 25 cents for a 1-use transfer. On top of that, service was cut 15 percent in 2010, stranding many passengers and leading to longer waits and crowded buses. Where else but public transit can you get away with charging much more for less and worse service?

Several transit activists and transit workers attended the meeting and spoke out against the proposed fare increases: “You say there’s no money. Why don’t you go talk to Chevron?” said one speaker. Another commented, “It’s ironic that you talk about honoring Rosa Parks with a poster — if Rosa Parks were here, she would be disgusted by these proposals. It’s not about whether you sit in the front or back of the bus, but about whether there’s even a bus at all to catch!” These fare increases will have a racist and anti-working class effect as they hit our riders who are around 70% low income.

Unfortunately, there were very few in attendance (perhaps 15 passengers and nine transit workers). It will take much, much more pressure to slow down these major attacks on the ridership. Our union leadership says they are in favor of this type of activism, but they didn’t even put out a memo to the members, letting them know about this board meeting!

For those of us who did organize for the meeting, it was a positive start. Two drivers spoke at the union meeting, and passed out flyers at work for about five hours during the week. We also called around 15 drivers and texted about 50; this resulted in four drivers coming with us to the meeting.

Despite the fact that we just suffered a disastrous arbitration and currently pay back 6% of our check every week, many drivers are still hesitant to see themselves as activists. There was much more interest at the union meeting around the issue of whether to hold a special election for a new union president or to wait eight months for the scheduled election. Most drivers believe that the key is having a good leader (a “fighter,” someone “knowledgeable,” someone who “can’t be bought,” or all of the above). Also, most drivers are hanging on to the hope that things will get better once the economy starts to recover, and we can hold on to our standard of living. 

But these attacks seem likely to continue for the foreseeable future. As CHALLENGE frequently reports, the U.S. corporate class is in worldwide competition. Their main solution is squeezing the working class here in the U.S., and waging war abroad to maintain their stranglehold on oil and other resources. Once more drivers take a serious look at this “world situation,” they might conclude that we need many, many more rank-and-file leaders.

We invite all transit workers to Progressive Labor Party’s May Day celebration this year, where we will celebrate international working-class unity, discuss the rebellions in the Middle East and the Wisconsin fight-back, and look toward a world free of capitalism, where public services would come first, not last. 

BESANCON, FRANCE, April 6 — Riot police attacked 500 parents, teachers and high school students with riot clubs and tear gas during a peaceful demonstration outside the board of education protesting teaching staff layoffs in this city of 117,000.

The action was called by Federation of Councils of Parents of Pupils (equivalent to the Parent-Teacher Association [PTA] in the U.S.). The demonstrators chanted, blew on whistles and beat saucepans with wooden spoons. When a long-distance coach drove down the narrow street, the crowd was forced to surge towards the police, who immediately reacted violently.

Some parents had brought small children. One two-year-old child’s eyes went all red and was seized with a fit of trembling.

The demonstrators denounced the attack as proof of “the feverishness of a government which is attempting at all costs to force through the destruction of public services and whose only answer to our demands is force and obstinate silence.”

Since 2007, over 50,000 education jobs have been cut nationally, with another 16,000 slated for September. This is part of the government plan to reduce the budget deficit by 100 billion euros (US$136 billion) in order to satisfy “the financial markets.” The budget “deficit” is due mostly to the bailout of the banks.

According to Eurostat, the European Union’s (EU) statistics bureau, the EU bank bailout cost 15.4 billion euros (US$21 billion) and the EU’s total government debt in 2009 amounted to 8.7 trillion euros (nearly US$12 trillion). The interest on that debt goes straight into the pockets of the capitalists. To ensure they get their’s, the capitalists demand public service cuts.

Under capitalism, education is always run in the bosses’ interest. Only under communism can education be totally transformed into an activity that promotes both the development of the individual and the good of society.