Thanks to Dennis Torigoe for a very informative piece in Voices for New Democracy about the privileged position the U.S. has in global finance due to the acceptance of the dollar as the world’s reserve currency. I am wondering about the relationship between Modern Monetary Theory (MMT), that has captured the enthusiasm of many of us, and the sovereign role of the dollar in global finance.
We are excited about MMT because it exposes the myth of deficit spending and describes the actual working of the economy. MMT shows the deceitfulness of rationalizing the government’s failure to provide for the basic needs of the people with excuses like we don’t have the money for this or we would have to raise taxes to pay for that. These rationalizations are false because the U.S. Government is the sole currency issuer and creates fiat money by spending it into existence, a feat none of us can accomplish, at least legally. It is no more difficult to find the money for universal health care, housing, living wages, education, immigration reform and addressing environmental destruction and climate catastrophe than it is to find the money for bombs, drones, guns, corporate bailouts and aid to foreign countries that are human rights abusers. The failure to provide a decent living standard for its population is exposed as due to a failure of political will and moral values, not a shortage of money. MMT opens the door to a more democratic process of managing the U.S. economy.
What I find challenging is what is precisely the relationship between MMT and the international financial arrangements that lead to U.S. dominance over other nations. The sovereign dollar plays a major, if not decisive, role in promoting U.S. imperialism. Could we, or would we even want to, create a paradise in the U.S. by trampling the rest of the world to death with imperialistic and financial action afforded by our privileged position in the global financial system? The relationship between MMT, with its potential benefits toward democratizing our national life, and the global financial system that fosters U.S. imperialism challenges our thinking in the fields of Economics and Ethics. Could we (is it even economically feasible) or would we want to (is it even ethically justifiable to) utilize the tools of MMT domestically to fund education, housing, living wages, immigration reform, universal health care and avoiding the worst climate catastrophes if the US sovereign position in global finance continues to allow us the latitude to address Americans’ needs by immiserating other peoples?
SOME UNDERGIRDING VALUES, ASSUMPTIONS AND PROCESSES RELATED TO FORGING A NORTH CAROLINA TRUTH, JUSTICE AND RECONCILIATION COMMISSION (TJRC)
Introduction and Sketch of the Vision and Basic Plan
Every significant social undertaking usually has unstated values, assumptions and strategic objectives related to that undertaking. In this document we will sketch out some of those values, assumptions and strategic objectives as we currently see them for exploration and further refinement. This is a vital step as we strive to build on the Greensboro Truth and Reconciliation Commission (TRC) initiative to establish a North Carolina Truth, Justice and Reconciliation Commission (TJRC). You will notice that we have added the word “justice” to this emerging North Carolina statewide process.
Our country is trapped in a web of false or terribly distorted and contradictory historical narratives. Against this background, there is a growing consciousness of the need for some kind of truth seeking and justice making process in our nation. In fact, there has been over fifty (50) calls for and/or initiatives launched in recent years for truth processes. These include Rep. Barber Lee’s call for Congress to create a Federal Truth, Justice and Reconciliation Commission (TJR). Also, it is becoming increasingly clear that the nation cannot long endure without a broader and more truthful understanding of its history and a wiliness to both own and creatively engage that history so as to heal the wounds and repair the wrongs of our yesterdays. This is necessary if we are to have better tomorrows. In a real sense, nothing less than our personal futures and the future of the entire nation is at stake.
The NC-TJRC is envisioned as an ultra-inclusive process. That is, we want to reach a significant slice of the racial, economic, gender, rural, urban and ideological diversities within our state. While all the diversities are included, there will be a preference for the most marginalized, abused, and neglected, including an emphasis on undervalued and underpaid workers.
The rationale of working with all of these diversities is to touch the connective tissue of the common humanity in each of these components of our state’s population. In some religious traditions this is understood as touching the image of God in each person. This view is, understandably, not shared by everyone. Another way of capturing the same point is to raise the question: Can people (humans) change? If the answer is affirmative, the follow-up question is: What are the conditions conducive to changing in positive ways? And, a related question is: What is the potential of creating those conditions on a scale sufficient to bring about a meaningful measure of positive moral/social/economic transformation?
In this paper, we will outline significant elements of a process and name several key steps necessary to put the vision of a NC- TJRC in play. Before we go further, however, we want to express our sincere gratitude for all people within the family and close allies, scattered across the nation for your support of the long, difficult struggle for a measure of justice in Greensboro, including the process that brought into being the nation’s first Truth and Reconciliation Commission (TRC).
The Objective Conditions Are Ripe and Crying Out for Change
It is difficult to see how the nation can continue in its current mode and direction without descending deeper into more devastating and violent division and conflict. So, the more focused question is not whether conditions are ripe for change, as we are already changing, but rather, what kind of change. The George Floyd murder and the resultant explosion of the Black Lives Matter Movement, the 2020 elections and the January 6, 2021 insurrection at the nation’s capital, coupled with waves of state level voter suppressions laws designed to radically reduce the Black/Brown vote all speak to the objective conditions encasing and weakening our fragile and flawed democratic republic. These conditions and the great wealth-inequalities leave the nation very unstable and, perhaps, more divided than it has been since the Civil War period.
Given the current polarization and evolving conditions, again, the question is not whether the objective conditions are ripe for change but rather in what direction the nation change will. We believe, under the current conditions, that a high quality Truth, Justice and Reconciliation Commission (TJRC) in one mid-sized, southern state (10 million people) can have significant impact on the character and quality of national change going forward. It is our hope that we can contribute to a genuinely transformative national “Truth, Justice and Reconciliation” momentum by modeling such a genuine TJRC process in North Carolina.
The NC-TJRC Must Cultivate a Deep, Respectful Atmosphere of Mutual Listening, Mutual Speaking, and Mutual Benefits
Cultivating an atmosphere of deep, respectful listening and speaking will require a good bit of advance, patient, one on one and small group work (initially within groups that roughly share essentially the same ideological tendencies). One on one and small group discussions will help to establish the essential ground-work (a particular form of training) for growth into deeper discussions and greater unity between the broad diversities of peoples in the state. The point here is to avoid, early in the process, heated arguments between different social/economic/gender and racial groups that cause the emphasis to shift from understanding each other to winning the argument.
Also, if the NC-TJRC process is to work, we cannot over emphasize that there must be mutual benefits for all parties, especially black and brown people, the poor in general, with an emphasis on poor whites. Tragically, so many white people are captive of the ideology of white supremacy and who tend to see benefits for black and brown people as opposed to their interest. Therefore, we must avoid the zero sum win/lose framework that is built into our current national and cultural.
Even those who “lose” financially (the rich) will win in other ways; we know it is not likely that the majority of the upper economic class will agree with this perspective. However, disagreement with this perspective, does not make it untrue. After all, what does it ultimately profit a few people to gain a lot of wealth (stuff and things) but lose the nation and what’s left of one’s humanity, i.e. living outside of a beloved framework (and in fear of being exposed and becoming a target). The details of how to structure these conversations will vary, but all will require deep, mutual, respectful speaking and listening with mutual benefits promised for all.
We Must Forge a Sufficient Body of Agreed upon Historical Truths (Community Truths) That Contributed to the Accumulated Historical Wrongs and the Currently Lived Confusion and Injustices
This is where the rubber meets the road. Given our national history, there will necessarily be conflicting narratives of hardships, injuries, wrongs, who to blame, etc. A whole world of misinformation, disinformation, false information, confusing information and painful information will flow from these discussions. Such discussions can be both gut-wrenching but are also absolutely necessary. Truth is often bitter. These discussions will not only reveal unspoken truths, but will also be partly therapeutic as the emotional trauma is deeper and more enduring than most of us realize. Engaging these discussions across the state will require patience, tolerance and persistence. This will be an extended exercise in deep listening and respectful speaking that will involve sorting out, reframing, re-contextualizing, forgiving and forging alternative narratives.
In the course of these discussions, the injuries, damage, and pain will become clearer. Although, we are in a period Dr. King characterized as the “fierce urgency of now” yet, we cannot rush the process. We must take the time necessary. This is how people grow into the process and thereby help to forge a body of acknowledged “community truths.” We envision a North Carolina Truth, Justice and Reconciliation Commission (TJRC) of 11-15 people. We will strive to attract people with integrity and sensitivity. We envision that the commissioners will bring professional gifts and expertise with a range of life experiences.
Further, most of the commissioners will be from North Carolina, with no more than three from outside of North Carolina. Ideally, there will be at least one commissioner from each of the geographic sites in the state. The TJRC will schedule public hearings across the state that will provide an opportunity for Commissioners to hear and respectfully pose inviting questions to those testifying, creating space for elaboration at the public hearings.
The Limitations of TJR Processes & What It Takes to Repair Historical Wrongs
It must be acknowledged that all historical wrongs cannot be corrected, even with a good NC-TJRC or a goof national TJRC. However, this should never become a reason for not doing the best we can. The “best we can” has the possibility of helping to bend the moral arc and hopefully contribute to setting our state and nation on a different course.
Over the years, we in Greensboro have played a significant part in helping to build a budding movement infrastructure in North Carolina. It will take ramping up and connecting the range of social justice organizing work already being done in the state, as in the Fight for 15, the Poor People’s Campaign, plus local and state police, environmental, educational, housing equity, and other initiatives seeking justice. We are challenged, together with others, to help these struggles “walk towards each other”. Both quality and size of these connected struggles cause them to become transformative. Hopefully the growth of this trend in North Carolina will inspire others across the nation to intensify forging a range of positive, creative initiatives of which TRJC (s) is one component, but an essential component.
All of the elaboration in the previous paragraphs is to say, we have no illusions that a state or national TJRC will alone change the direction of the nation. At the same time, we believe that a greater measure of shared truth (and love) is necessary to counter the rapidly growing trend of falsehood, confusion, manipulation, fear and division resulting in a growing trend towards greater force and violence. That is why we are happy to partner with the Poor People Campaigns (PPC), and we will be reaching out to religious, civic, labor and neighborhood organization as well as youth/student groups, street groups (that some call gangs) and others who agree with our declaration of intent; our hope is to enlist them in the NC-TJRC process. For us, this is a major initiative that we likely would not be undertaking except for the work in Greensboro, especially the labor movement and the Greensboro TRC-related work with which so many in the Family have been a part.
“Going back to Abraham Lincoln, his greatest worry on the heels of the Civil War was that the majority of white citizens did not want to be part of the same community and polity, and certainly not put on an equal footing with black people. This is still the main alienation in US society. Economic inequality and government unaccountability, in the eyes of many whites, are the result of unfair advantages handed out to people of color. The pathway to changing the economy and government is to unite white Americans, but unity necessitates overcoming this racial resentment which is so strong that it threatens the foundation of the democracy…
The starting point for building unity across race, in our view, is changing white America’s image of black people as wanting to take material things away from white people. Black, and other people of color, need to advocate a broadly appealing economic platform to dispute that image. A forward-looking economic platform could meet white workers where they currently are and help move them away from a zero-sum calculation that they have nothing material to gain by uniting with people of color. But this is only a first step; an economic platform will not fully remove the anxiety many whites feel about no longer being a demographic majority with the ability to dominate society.“
The “white anxiety” of which Phil speaks will be partly engaged by a NC-TJRC process that involves “deep listening and speaking” in an authentic truth process.
The Projected Issue Focus Areas and Geographical Focus Areas
The TJRC’s Declaration of Intent lists six areas for exploration. They are:
The historical and current abuse of police powers and judicial processes.
The historical and current blocks and impediments to financial security and wealth creation.
The historical and current blocks and impediments to adequate housing.
The historical and current blocks and impediments to quality physical and mental healthcare.
The historical and current blocks and impediments to voting and full participation in the democratic process.
The disparate impact of climate change and other ecological factors on people of color and the poor.
These focus areas might change based on further exploration and discussion with local geographical areas around the state. The State of North Carolina is divided into three broad regions:
The Coastal Plains: This is the eastern part of the state. It was and remains the major farming area in the state. The land is rich and flat. This is the region where the large slave holding plantations existed. For years before the Civil War and for some 75 years after the Civil war the large plantation and former slave owners ruled the state government. This is also the area (the NC Black Belt) where the largest percentage of black people in the state still live
The Piedmont Region: This is the middle part of the state going from east to west. This region is where the major urban areas of the state are located. These urban areas include Raleigh, the state’s capital and the second largest city in the state; Charlotte, the largest city in the state, Greensboro the third largest city in the state, Durham the fourth largest city in the state, Winston-Salem, the fifth largest city in the state. The largest universities and colleges are also located in the Piedmont Region. These cities grew up during the industrial period. Textiles, furniture, and paper processing plants were some of the major industries that grew up in this area. Many of these industries, particularly the textiles, have moved to foreign countries in recent years.
The Mountain Region: This is the western most part of the state. It is primarily a mountain range. It is the poorest of the three regions. It is made up of small towns and villages with small farms. People in the region rely on industries linked to natural resources of the region. These include farming, mining, forestry, manufacturing and tourism. Asheville is the largest city in the western region. The ethnic makeup of the mountain region is 89.9% white; 9% Latino (Hispanic); and less than 1% Black (African-American).
Our current plan calls for identifying two sites in each of the state’s three regions. We will select the sites based on at least four criteria:
The desire of a sufficient core of diverse leadership, especially grassroots leadership, to sponsor and be part of a statewide TJRC process;
Commitment of local leaders to help seek financial and human resources to undertake the project;
Defining one of the six issue focus areas (listed in the Declaration) or identifying a different focus area that those committed to the NC-TJRC process are willing to assume as their geographic area of focus.
A good fit into the projected rural/urban divide, the black/white indigenous divide and of course a good fit into the regional divides.
The geographical sites to be chosen should reflect a good cross-section of the North Carolina population. If our resources allow and, if there is a groundswell of support to do so, we will expand from six to no more than twelve (12) geographical sites, i.e. up to four (4) sites in each of the state’s three geographical regions. As the NC-TJRC matures, these sites will be increasingly connected, effectively reflecting a statewide process.
Raising the Money and Putting Together the Team
Fund Raising: We believe it will take about $8 to $10 million dollars over the life of the project that we project will take about four (4) years. We have already raised over $1 million. We have been working with others to forge an effective fundraising team that is working hard to raise the necessary funds. Once the NC-TJRC is officially and publicly launched, we believe there will be greater interest and more funds made available.
The Staff: Initially, (by September) we plan to have new full-time staff of seven people. Within six months that staff will likely increase to 12 people. Also, we anticipate both college interns and full time volunteers being recruited for this work. If necessary and, if the funding allows, we may employ several part-time people. We will push, together with others, to organize, organize, and organize with on the ground training, training and more training. We are putting special emphasis on quickly growing a top-notch communication machine (capacity) as this will be essential to growing and holding the expanding process together.
The Kitchen Cabinet: We have put together a diverse Kitchen Cabinet of 14 people that we hope to consult with on a regular basis (as needed).
The National Advisory Committee: We project a national advisory committee of about forty (40) people that will meet virtually or in person twice a year. We are projecting that twenty-five (25) of its members will be from North Carolina and fifteen (15) from outside of North Carolina. All of the members will be available for consultation between its formal meetings, as needed.
Building from the “Bottom Up” and from “the Center Out”
Truth and Justices processes cannot and will not work if they are not deeply rooted in the grassroots, i.e. the people most damaged and wounded, the people most neglected and devalued. This is one of the lessons learned from South Africa. The South African TRC was not a failure, but it was also not a glowing success. It probably did prevent a South African Civil War; that in itself was significant. As we have learned from those who helped to forge the South African TRC process, there were three very interrelated, overlapping significant weaknesses.
First, according to those who were active in the process, it did not adequately reach out into local areas where the lion’s share of the pain and suffering was experienced by black people. Stated differently, it was too centralized and did not reach deeply or broadly or prolonged enough into parts of the population that suffered the most. We have put a major emphasis on avoiding that mistake. That’s what we mean by building from the bottom up and the center out. The center is not the perspective of rich white men. The anchoring perspective is rooted in the people most the injured, abused, devalued and harmed.
Second, a significant part of the white South African population did not adequately or sincerely engage in or commit to the TRC process. This is where we think the depth of white supremacy comes into play. Our best understanding is that white South Africans engaged in the process in a limited and pragmatic way. It probably was more about participating with a view of “getting it behind us” and with little fundamental change. The South African process seems to have done little to cause white South Africans to see deeply into themselves and their need for deep change. This is also a danger in any process that is developed in the United States, including the NC-TJRC process. Engaging white supremacy at its roots will be very challenging, as it is has to do with touching that part of us that makes us truly human and connects us with other humans across the historical ditches of racism, nationalism, regionalism, genderism and all the other “isms” that cause one to view “surface” differences in the human family as a justification to exploit, devalue, injure and even kill others and justify it based on making certain people “the other” and inherently “less than” or just “evil.” This is a very difficult challenge to overcome. It does, in our humble opinion, require a greater measure of deep truth and love of humanity.
Third, and very closely related to the first two, is that there was inadequate attention given to the economic sphere. While there was a shift in political power, the deep historic and ongoing damage done in the economic sphere was not meaningfully addressed. When we were in South African in 2007 at the invitation of the Tutu family, some of us talked with economically poor Black youth one night on a corner in Soweto. They shared their disgust at seeing whites who admitted to viciously killing Black people walk away free. In contrast, they argued that if they stole a chicken or some food because they were hungry and impoverished, they would be given active jail sentences. I know this is an over simplification as the economic system is international and complex, but such complexity should not stand as an excuse for evil in South Africa or the United States. We in the U.S. must simply strive to do better.
Building Power and Forging Relationships across the State and the Forms of Power That Overcome Polarization and Produce Positive Policy Changes
A major part of the success of the NC-TJRC will be our capacity to forge positive relationships with people and organizations that are already active, i.e. organizers, researchers, scholars, and current participants in the social justice movement, etc.
In concrete terms, we will seek to grow positive relationships with people working in the six issue focus areas mentioned in the Delectation of Intent: the abuse of police powers and judicial processes; blocks and impediments to financial security and wealth creation; blocks and impediments to adequate housing; blocks and impediments to quality physical and mental healthcare; blocks and impediments to voting and full participation in the democratic process; the disparate impact of climate change and other ecological factors on people of color and the poor.
In the process of doing our work, our hope is that we will de-intensify the growing polarization, grow greater “community truth” and seek expanded common ground among the diversities of people in our state, particularly the poor and excluded. If we make progress in these areas, this will be a somewhat different kind of “people power” base. We will necessarily have to make strategic and tactical decisions, much of which will have to grow out of the process itself and is currently beyond the scope of further reflections in this document.
Projected Launch of the NC-TJRC Process
We have not tried to keep it a secret that we are working towards a NC-TJRC process. However, we have chosen not to make any formal statements about our plans. There were and are too many loose ends. When we make a formal public statement about the NC-TJRC, we intend to have on-boarded key staff members, a fully confirmed Advisory Committee, a committed “kitchen cabinet,” and a thoughtful plan on how to best publicly launch the process. At this point our anticipated launch date will be between August 15 and September 15th.
Our launch will include a plan to reach out to a variety of individuals, organizations, and networks to inform them of the NC-TJRC process and to suggest ways they can be involved. Some of the organizations and leaders include:
Statewide religious organizations and leaders
Statewide grassroots organizations and leaders
Statewide labor unions and leaders
Statewide youth organizations and leaders (including student organizations and leaders)
Law School organizations and leaders
And, a network of as many local, grassroots, movement oriented organizations as we reasonably can.
With this vision, our media and communications capacity has to be firmly in place. We must be able to get our message out effectively and quickly. Of course, inquiries and offers to help are to be expected, and we must be prepared to respond to those in an efficient and timely manner as well.
Summary and Concluding Words on the Eminent Situation Before Us
We have set forth a bold vision, sketched out initial elements of a plan and begun the difficult journey of growing greater truth, justice, reconciliation and healing in our state. Objectively, this is building on the work in Greensboro, including the TRC, for which suffering was endured, blood was spilled, and lives taken. If reasonably successful, we believe this initiative can be a significant contribution to the nation. The push we are currently making would not have been possible except for the love, work and contributions of many people (the family) across the nation. For this we are grateful.
Developing the NC-TJRC is a challenging undertaking and is likely to become more difficult in the months and years to come. As we said earlier in this document, “It is difficult to see how the nation can continue in its current mode and direction without descending deeper into more devastating and violent division and conflict.”
We have been in weekly discussions and planning with a strategically located group of people for over a year, including the Rev. Dr. Peter Story one of the leaders of the South African TRC process. Even though some progressive strides have been made in the United States over the last year (specifically the national election), it is our humble opinion that the national crisis has continued to grow deeper and wider.
Under the false banner that “the election was stolen”, the former president, and leader of the January 6th insurrection, is being embraced on an even deeper level by a significant slice of the US population, including the base and leadership of the Republican Party. At this moment, our elected national leadership does not seem to have a clear pathway forward to effectively rally the majority of the American people around a clear vision and steps to “save the soul of the nation, while transforming the circumstances of the people of this country.
In a sense the insurrection is on a slow burn toward the further destabilization and ultimately the destruction of the already deeply flawed democratic/economic institutions of our nation. It is not clear when the “slow burn” will swiftly expand into a raging inferno. That is the growing danger. In a real sense, we are in a race against time.
The primary fuel for this burn is the ideology of white supremacy and the economic system that promotes growing poverty and wealth inequality, all of which has its particular history. It is becoming clearer, at least for some of us, that the historical damage of white supremacy inflicted on Black people, Native American and “third world” nations has also been inflicted on white people themselves, especially poor whites. As white people lose their numerical majority and their capacity to dominate, the false stories they have told themselves about matters, such as their greatness and goodness, are being peeled back. This is unleashing hidden trauma and openness to a range of dangerous conspiracy theories. This is the base of the “Make America Great Again” (MAGA) movement.
As a child in grade school in the late forties and fifties (Nelson), the word slavery was not in text books that we used. Instead, slavery was called the “peculiar institution.” This was a form of hiding from the truth and replacing it with false narratives. Now, a movement, an obsession, has developed to band the teaching of what is called critical race theory. This is simply another mechanism to avoid the truth of this brutal aspect in the history of our nation. The growing acceptance of falsehood, conspiracy theories, division, conflict and hate are parts of the slow burn.
The substance of our thinking and commitment that we have tried to put forth is this rushed document is to join in growing a process, indeed a movement in North Carolina, rooted in the truth of our tortured history but also rooted in a history of generosity, determined resistance and a deep belief in the human capacity (all humans) to change for the better.
Clark’s essay was first published on his GlobalTalk blog.
Perhaps, I should quit being surprised by Biden’s acumen. He has a next-to-nothing Democratic majority in the Senate, and critical pieces of that majority are reluctant allies. Yet, he’s playing it like a violin.
Or, to mix metaphors, he’s playing from a deck stacked by broad, energized, progressive-driven, public opinion.
Either way and both ways, the American people seem to have found a leader who will pursue our demands.
The bi-partisan deal that Biden announced yesterday with 11 Republican Senators (enough to overcome the threat of a filibuster) has two key pieces:
First is $570 billion in new infrastructure spending (roads, bridges, water system, electric grid, broadband, etc.) with no “pay-for” restrictions. This is part of a $1.2 trillion, eight-year infrastructure investment plan. Because 11 Republicans support it, the infrastructure plan will get and win an eventual floor vote in the Senate.
Second is $2-6 trillion in additional federal allocations for childcare, education, healthcare and the green new deal (details to be decided), none of which are supported by any Republican Senators (though a few may eventually go along). Because of the filibuster rule, this family care package cannot get a floor vote in the Senate, but the same 11 Republicans (above) stood quietly, then spoke heartily of bi-partisanship (see, some of us Republicans can get things done), after Biden explained that these family care matters may be included in September’s “reconciliation bill” when the official FY 2022 Budget is approved by a simple majority vote of the Senate (thus, avoiding a filibuster).
With a summer of negotiations ahead over the actual content of these bills, plenty of time remains for political defections. It’s been less than 24 hours, and, already, some of the 11, feeling rolled by the direct linkage of the two bills, are threatening to pull out. But the threat of House progressives (supporting progressive allies in the Senate) to refuse the stand-alone infrastructure bill and, instead, put them both in reconciliation and pass it without any Republican support (and leaving the 11 hanging) may have set the deal in stone.
The decision (when final) of the 11 Republicans to go along with Biden’s deal is a concession to the political reality that the Trump era is over, and the nation will continue its political life in traditional democratic, two-party fashion, finally rebuking Reagan’s long-ago, fool-hearty assertion that government IS the problem. Going forward, they agree that government is part of the solution… and, at least as far as physical infrastructure goes, they’re putting their toes back in the water.
After the deal’s announcement, Bernie Sanders, chair of the Senate Budget Committee (that will draft and approve the specifics of the Senate’s reconciliation bill), expressed the gleeful opinion that the Senate would soon pass the “most important piece of legislation for working people in America since the 1930s.”
This deal ensures that money will flow and the economy will pick-up all next year when the midterm elections roll. This should produce a landslide for Democrats and a big haul for progressives.
But this deal is not enough, and many progressives in and out of Congress are saying as much. It is a “down payment” on the trillions that must still be spent…and, after 2022, heading into 2024, progressives will be advancing and passing additional legislation in a host of areas. Indeed, 2022 through 2028 is likely to be the most creative, active period of progressive legislative action in the history of the nation.
This week’s deal sets a basic framework for the coming social contract, but key features are still big blanks: reparations for slavery and indigenous dispossession; financial democracy and public investment; and international financial justice/opportunity for the Global South.
We’ve entered the last, fateful phase of this Fourth Turning. Now, codifying and institutionalizing programs to rectify these remaining injustices — while moving ahead with public investments in infrastructure, education, healthcare, climate justice and a federal job guarantee — is this revolution’s practical next steps.
For this, progressives have three jobs: (a) designing constructive problem-solving programs to achieve social justice and avert climate change; (b) educating and mobilizing Americans to pursue the progressive agenda; and (c) electing enlightened progressives to public office to enact our agenda.
In our latest monthly political forum, Nelson and Joyce Johnson from Greensboro, North Carolina’s Beloved Community Center discussed their efforts in building and sustaining the organization.
Among their other work, they led efforts to establish a Truth and Reconciliation Commission in 1999 to help the community heal from the 1979 Greensboro Massacre, in which five local labor and antiracist organizers were killed by members of the Ku Klux Klan and American Nazi Party under the watch of the Greensboro police and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Currently, they are also fighting to establish a new Truth, Justice, and Reconciliation Commission at the statewide level to continue advancing the fight for a truly “Beloved Community.”
Watch the full forum below, and check back with Voices for New Democracy on June 24th when we will share a piece by Nelson & Joyce Johnson reflecting on their work.
The US dollar is in a privileged position in the world as the global reserve currency which dominates international trade and commerce. As the world’s reserve currency, the US can continue to print as many dollars as it needs, run massive balance of trade deficits and use it to buy the world’s goods, basically swapping our paper for their raw materials and labor. The US can continue to increase its internal and trade deficits as long as it retains this world reserve currency status.
The bottom line: The dollar as the world’s reserve currency has been both an economic blessing and a curse on the workers and people of color in the US. The US dollar’s role as the hegemonic reserve currency allows the US to deficit spend massively on the military and wars of aggression, while funding certain reforms to quell domestic resistance through targeted programs paid for by massive deficit spending. At the same time the US dollar is used to plunder developing countries through high interest loans( by its de facto control of the IMF and the World Bank), to attack other countries’ sovereign currencies and engage in unequal trade with developing countries.
The dollar as the world’s reserve currency has led to the gutting of domestic industry as US corporations, riding on the massive amounts of dollars printed by the US, drive for higher profits through outsourcing manufacturing and with them factory jobs to cheaper producers in Asia and elsewhere. This has directly contributed to deindustrialization, structural unemployment and widespread suffering for a large swath of the American people.
Not only does the US control the creation of the dollar as the world’s reserve currency, it also controls the mechanism which allows another country to use the US dollar in trade or finance, the SWIFT trade clearing system. Through it, it has attacked countries like Iran and Venezuela though enforcing trade sanctions and caused untold suffering to the people of those countries,
The reserve currency status of the dollar allows the US to import cheap manufactured goods from other countries, particularly China, while paying for it in dollar-denominated paper or bonds. The US balance of trade deficit has soared, especially since the 1990s, as they give us real goods and we give them paper.
This cheap goods vs. paper payment has contributed to inflation being almost nonexistent, till now, from the 1990s to 2020.
Given the history of the imperialist wars, the plunder through unequal trade and economic and political aggression against the developing countries, the US owes reparations to much of the developing world which have to be repaid over time. In our view, the only way to repay these historic debts and to raise the standard of living within the US is through unleashing massive postindustrial gains in productivity through a top to bottom reform of the present economic system.
However, we do recognize that replacing the US dollar as a reserve currency will perhaps take decades. In the interim, a Green New Deal-like program could be pivotal in accelerating the fight against climate change and the US’s advance in a post-industrial world. However, the feasibility of such massive spending assumes the reserve currency status of the US dollar and the US’s own easy access to capital markets. Do the benefits that accrue to American workers from giant government programs come at the expense of people around the world? The answer is yes, thus the US bears a special responsibility to the rest of the world to fight climate change, inequality and injustice. As starters, the US needs to join or rejoin initiatives like the 2015 Paris Agreement, COVAX, the World Health Organization and revolutionize the character of international institutions like the IMF, World Bank, Bank for International Settlements, and the UN.
At the same time, we should seek first to promote alternatives to the US dollar’s reserve currency status and more equitable control of the world’s financial, trading and banking networks.
The US Dollar as the Global Reserve Currency: Is Modern Monetary Theory Only Good for Modern Imperialism?
When Representative Alexandria Ocasio-Cortez was asked how the potentially multi-trillion dollar Green New Deal was going to be paid for, she mentioned Modern Monetary Theory (MMT). Coming into wider public view since then, it has become the answer for some on the political left to the question of how to pay for any major program proposed, from Medicare for All to Guaranteed Annual Income.
So what is this theory and how does it work, who benefits and who actually pays for what it promises? We think it is usable by a superpower with hegemonic financial power through the use of the US dollar as the world reserve currency, benefiting the ruling class financially and politically. It is paid for by the developing countries and their citizens forced to use the US dollar in trade and finance. And while it may give short term benefits to US workers, it creates an unsustainable global economy and prolongs the rule of the monopoly capitalists.
The bottom line: the US dollar’s role as the hegemonic reserve currency allows the US to spend massively on the military and wars of aggression, while funding certain reforms to quell domestic resistance through targeted programs and to continue to use the US dollar to plunder third world countries and engage in unequal trade.
It is one currency, one system. They are interconnected. Given the history of the imperialist wars, the plunder through unequal trade and economic and political aggression against the developing countries, the US owes reparations to much of the developing world which have to be repaid over time. In our view, the only way to repay these historic debts and to raise the standard of living within the US is through unleashing massive postindustrial gains in productivity through a top to bottom reform of the present economic system.
However, we do recognize that replacing the US dollar as a reserve currency will perhaps take decades. In the interim, a Green New Deal-like program could be pivotal in accelerating the fight against climate change and the US’s advance in a post-industrial world. However, the feasibility of such massive spending assumes the reserve currency status of the US dollar and the US’s own easy access to capital markets. Do the benefits that accrue to American workers from giant government programs come at the expense of people around the world? As we show below, the answer is yes, and if so then the US bears a special responsibility to the rest of the world to fight climate change, inequality and injustice. As starters, the US needs to join or rejoin initiatives like the 2015 Paris Agreement, COVAX, the World Health Organization and revolutionize the character of international institutions like the IMF, World Bank, Bank for International Settlements, and the UN.
At the same time, we should seek and promote alternatives to the US dollar’s reserve currency status and more equitable control of the world’s banking networks.
Secular Stagnation Takes Hold in the US Economy
We believe that the US economy is in a period of what Lawrence Summers, the Harvard economist, calls secular stagnation. He cites a number of factors pointing in this direction.
First of all, there has been a decrease in market-based investment demand overall, driven by a shrinking working age population which drives down investment in housing, consumer demand and production equipment. Also driving down investment has been the lower cost and higher productivity afforded by the technology revolution. He also argues that increased monopoly power in the US has stifled investment, as well as the refusal of the politicians to fund major infrastructure projects. The net result has been that infrastructure spending is now one half of what it once was,
The other aspect driving secular stagnation has been the increased savings taking place in the economy. Much more of the country’s income and wealth is going to the top economic earners, driving up the prices of assets like stocks and real estate, not into productive investments. Moreover, because of the traumatic experience of the Great Recession of the 2009, people are themselves saving more as a cushion and banks have tightened lending rules, excluding many from purchasing homes and opening businesses. Of course, the coronavirus pandemic has greatly increased all these factors.
What Is Modern Monetary Theory?
Modern Monetary Theory has been around for a while. In her recent book The Deficit Myth, Stephanie Kelton, a leading proponent, cites her colleague Wynne Godley who in the late1990’s as a major inspiration for her thinking. Basically, MMT argues that the government (in the US case, the Federal Reserve) can issue as much money to enable the Federal Government to spend as much money as it wants up to the point where economic demand in the economy outstrips the available supply of goods and services, at which point inflation and higher interest rates set in. For a country with a sovereign currency, meaning it issues and controls its own currency, MMT believes that it can create money and the government can spend money as long as the goods and services exist for it to buy in its specific currency.
One of the major distinctions made by MMT is that unlike households and private businesses, a government with a sovereign currency does not need to balance its expenses with its revenues. The government, as the creator and controller of the currency, can print as much money as it wants to pay off its bills. But this means that governments without control over the currency with which they borrow or trade must use the US dollar to trade or pay off debts denominated in dollars or held by US-controlled institutions. They are like households. They need to get US dollars to pay off these bills.
How Does the US Ruling Class Use the Dollar as the Global Reserve Currency to Plunder the Rest of the World?
The countries that have the ability to follow MMT’s policies are the advanced capitalist countries of the world, with the US by far the most powerful. Like households and businesses, the rest of the world has to get (through trade or borrowing) and use the major currencies of the West, mainly the US dollar but also the euro, the yen, the pound, and to a smaller extent China’s yuan, to engage in trade and finance with the US and major trading nations of Europe, Japan and China. As we shall see, not only does the US control the creation of the dollar as the world’s reserve currency, it also controls the mechanism which allows another country to use the US dollar in trade or finance. (Unlike the US, the European countries that share the euro are a work in progress. While they share a single currency and a central bank that issues that currency, spending decisions are still made, within limits, by their individual governments.)
The US dollar is in a privileged position in the world as the global reserve currency. After World War II, the US was the world’s most powerful military and economic power. At the post war Bretton Woods Conference, the major allied powers and other signers agreed to the US dollar as the world’s reserve currency, then pegged at US$35 to an ounce of gold.
The Conference also created the International Monetary Fund, which was to stabilize currencies vis-a-vis the US dollar through loans and the World Bank which was to help develop international trade and finance. Both were de facto controlled by the United States in its position as the biggest contributor of financial support, with US dollars, a currency that it created and distributed as its sovereign currency.
The US Dollar as the World’s Currency for Buying Oil Shores Up its Dominance
In the 1950s and 1960s, as the world’s economic and military superpower, the US dominated the world economy in trade, finance and manufacturing. Importantly, it also dominated the trade in the world’s most traded commodity – oil. As the US dollar was the reserve currency in the world, almost all oil produced and exported had to be bought with US dollars. This worked until the US stagflation crisis (economic stagnation AND inflation at the same time) in the early 1970s when the US unilaterally pulled out of the gold standard of US$35 being exchangeable for one ounce of gold. With US inflation and the dollar’s devaluation — its value “floating” depending on supply and demand — the oil-exporting countries of the Middle East lost purchasing power. They rebelled with the 1979 OPEC boycott by oil producing countries, refusing to ship oil to the West, which made the price of oil quadruple, from a fixed price of US$4 a barrel to US$12 a barrel in a matter of months. With US dollars now gushing out of the US and Europe to the oil producers in OPEC, a new agreement was signed. In 1979, the US-Saudi Arabia Joint Agreement on Economic Cooperation, in which Saudi Arabia, the biggest oil exporter, agreed to take only US dollars for its oil and to funnel them back into the US. This again strengthened the US dollar’s hegemony on the world economic, trade and financial scene.
Since then, the US dollar has kept its position as the only truly world currency, though it is being potentially challenged by the euro and less so by China’s yuan. (On a secular basis, the shift away from fossil fuels, including oil, and the rise of digital currencies, especially sovereign-state-supported ones, pose challenges to the US dollar’s dominance in world trade and finance.)
The US Dollar Hegemony Helps Keep Wages Down Here and Oppress Low Wage Labor Overseas
The new millennium has brought historically low inflation to the United States, especially compared with the decades since the 1970s, as can be seen by the chart below.
At the same time, the US balance of trade deficit soared, especially since the 1990s, or as MMT author Kelton says, they give us goods and we give them paper. What happened in that period? The US started importing massive amounts of goods from the rest of the world, particularly China. While the US has historically exploited cheap overseas labor and raw materials, from the banana plantations of Central and South America to the sewing factories in the Caribbean and Asia, now the US was buying manufactured goods from a fast-growing Chinese economy. At least one study shows that this had the effect of dampening price inflation. This was especially true after the period of the Great Recession of 2008-2010, when the US economy was recovering. According to A New York Federal Reserve staff report showing the impact on trade on US prices:
Lower Chinese export prices due to WTO entry reduce the U.S. manufacturing price index by 4.9 percent, while greater Chinese export variety reduce the index by 2.6 percent. The sum of these two values indicates that the total WTO effect on the U.S. price index is 0.076, that is the U.S. manufacturing price index was 7.6 percent lower in 2006 relative to 2000 due to China joining the WTO. Note that this fall is after correcting for any overall inflation in domestic and import prices that is common across industries in the constructed U.S. price index, sincecommon trends would be absorbed by the constant term in (33).
So we interpret this 7.6 percent fall in prices as the real impact on U.S. manufacturing prices relative to inflation. Since manufacturing is only a fraction of the U.S. economy, this seemingly large effect is notably smaller than the aggregate 6.7 percent long-run U.S. welfare increase that Caliendo et al. (2015) estimate from the 2000-2007 China trade shock.
In a period of increasing impoverishment of US workers, this meant that their real wages were buffered by this lowered inflation and thus kept their standard of living from declining even more. The fact that most of the imports from China are consumer goods and consumer spending makes up 2/3 of our economy means that the standard of living of people in the US is increasingly dependent on the continuation of US dollar hegemony. We are using massive amounts of printed dollars to keep the goods coming. If there ever was a sudden stop to this, our living standards could fall precipitously. As quoted by Siddiqui, Paul Samuelson expressed his deep concern about this:
More than a decade ago, Krugman (2007: 437) noted, “The United States has a remarkably large current account deficit, both in absolute terms and as a share of GDP. At the moment the country is not having any difficulty attracting capital inflows sufficient to finance this deficit, but many observers nonetheless find that deficit worrisome. This worriers see an ominous resemblance between the current U.S. situation and that of developing countries that also went through periods during which capital flows easily financed large current deficits, then experienced ‘sudden stops’ in which capital inflows abruptly ceased, the currency plunged, and the economy experienced a major setback.”
The Walmart’s and Amazons depend on the much lower paid labor making manufactured goods from China and the developing countries as an inherent part of their business models. This was another way that the ruling class kept pressure for wage increases down and capitalist profits higher. The other way was US companies offshoring production of things like sophisticated electronics at a fraction of the cost of what it would be to produce in the US. The Apple iPhone is a prime example of this,
And how does the United States pay for this massive trade deficit? As MMT says, we get real goods, we send them paper. Basically by printing money that the world is obliged to take as payment. China now has over a trillion dollars of US Treasury notes that it has accumulated in trade with the US, about 7% of the total foreign-held US government debt.
Thus the US ruling class continues to reap the profits of exploiting cheap labor from the developing countries in both raw materials and in manufactured goods because of its position as the creator of the world reserve currency.
The Cycle of US Interest Rates and Currency Attacks on Developing Countries
In 2007 Joseph Stiglitz wrote an article titled “The Asian Crisis 10 Years Later” in The Guardian, explaining the Asian Financial Crisis which began in 1997. In it, he laid out the timeline of the crisis:
In July 1997, the Thai Baht plummeted. Soon after, the crisis spread to Indonesia and Korea, then to Malaysia. In a little more than a year, the Asian crisis had become a global financial crisis, with the crash of Russia’s ruble and Brazil’s real.
In that year, George Soros’ hedge fund, the Quantum Fund, bet heavily against the Thai baht, which had recently dissolved its peg to the US dollar. Thailand did this after the dollar strengthened, and Thailand was caught in deteriorating terms of trade and thus an inability to pay the massive loans it had denominated in dollars. That was like blood in the water to the hedge fund sharks and other currency speculators to attack the Thai baht, betting that it would quickly devalue against the dollar. George Soros’ fund’s $1 billion bet, in fact, wasn’t the biggest of the attackers. Julian Roberts’ Tiger Fund hedge fund bet $3 billion against it. The attacks continued through the next two years.
What were the general conditions causing this financial crisis? As Stiglitz puts it, “[B]efore the 1997 crisis, there had been rapid increases in capital flows from developed to developing countries – a six-fold increase in six years. Afterwards, capital flows to developing countries stagnated.” He went on to say, “Indeed, the two most important lessons of the crisis have not been absorbed. The first is that capital market liberalisation – opening up developing countries’ financial markets to surges in short-term ‘hot’ money – is dangerous. The only two major developing countries to be spared a crisis were India and China, both of which had resisted capital market liberalisation. Yet today, both are under pressure to liberalise.”
We think that the cycles of interest rates play a major part in the recurring financial crises. When US interest rates decline and a weaker dollar follows, US companies use the cheap money to buy up assets in these countries and US banks push dollar-denominated loans to them. Then the crisis hits and the foreign investments become “hot money” and flows out of the country. At the same time, Western banks stop lending and the economic crisis intensifies in developing countries.
Korea’s experience with the 1997 Asian financial crisis is an example of Western predatory attacks against a weakening currency leading to the attempts at an economic takeover of its most valuable assets. Korea was forced to borrow from the IMF to cover foreign loan repayments for its major industrial companies, the Chaebol. Among other demands, the IMF demanded that Korea “open up” its financial markets to foreign investment, allowing 55% foreign ownership of its companies (Korea dropped limits altogether), which would mean foreign, primarily U.S., control of Korea’s companies.
As one report in 2009 stated in Korea’s attempt to instill anti-takeover poison pill measures:
Domestic M&A laws have been loosened since the 1997-98 Asian financial crisis, and in 2006 activist investor Carl Icahn and hedge fund Steel Partners floated the idea of buying tobacco monopoly KT&G…in what would have been South Korea’s first unsolicited foreign takeover bid, but no official tender offer was filed.
In 2003, SK Group, parent of top mobile carrier SK Telecom…and refiner SK Energy…, clashed with Sovereign Asset Management, which unsuccessfully sought to remove its chairman.
Those cases raised a red flag to unfriendly takeover attempts and led listed companies, including Samsung and POSCO, to spend $55 billion defending their management as of end-January.
“Our country has made hostile M&A attacks easy by removing a ceiling on foreign stock investments, but it has not had any means to prevent hostile M&A,” the justice ministry said in a statement on Monday.
The US Dollar and the SWIFT International Settlement System: Weaponizing the Dollar
On November 5, 2018 Al Jazeera ran the following headline: US Treasury Secretary Steven Mnuchin told reporters that SWIFT could get slapped with sanctions if it provides services to Iranian banks blacklisted by Washington.
The article continued:
The Belgium-based Society for Worldwide Interbank Financial Communications (SWIFT) financial messaging service announced on Wednesday it was suspending access for some Iranian banks “in the interest of the stability and integrity of the wider global financial system.”
What was this about? Another way the US uses its hegemonic position as the world’s reserve currency is its weaponization of the currency clearing system used in global trade. Today SWIFT (the Belgium-based Society for Worldwide Interbank Financial Communications) system dominates the international trade payments system, which of course is heavily based on the US dollar,
As a whole, the US dollar is by far the currency of world trade transactions. As Kalim Siddiqui wrote in his 2018 article “The U.S. Dollar and the World Economy: A Critical Review”:
the U.S. dollar makes up nearly 63% of central banks’ reserve currency holdings,against 17% for the euro and 2% for the yen (Siddiqui 2018a, World Bank 2017).
In the foreign exchange market, 90% of forex trading involves the U.S. dollar. At present, nearly 40% of the world’s debt is issued in the U.S.dollars (World Bank 2017, Willett and Chiu 2012).
SWIFT is basically a financial messaging system that allows its member banks to conduct payment settlements between international trade buyers and sellers, According to Al Jazeera, the member-owned cooperative connects more than 11,000 banks, financial institutions and corporations in more than 200 countries and territories around the world. It continues:
Think of SWIFT as the central nervous system of international financial transactions. The messaging platform enables financial institutions to send, receive and track information about financial transactions in a secure and standardised way that facilitates the smooth flow of funds across borders.
When the Trump administration wanted to punish Iran with sanctions, it used the US’ role as the world’s issuer of reserve currency as one of the ways to enforce it. Al Jazeera states,
Countries cut off from SWIFT can be crippled financially because money transfer information can’t be forwarded to its banks. When a country’s banks are cut off from SWIFT, it can’t pay for imports and can’t receive payment for exports… In March 2012, SWIFT agreed to not forward messages to any Iranian bank or individual that had been blacklisted by the EU. As a result, Iran’s oil exports plunged from around 2.5 million bpd in 2011 to around one million bpd by 2014. The 2012 SWIFT ban was widely seen as instrumental in bringing Iran to the negotiating table which led to the 2015 Iran-nuclear deal. When Iranian banks were reconnected to SWIFT following the 2015 Iran-nuclear deal, oil exports increased again.
While SWIFT is not owned by the US, it defies the wishes of the superpower at its own peril. Al Jazeera states:
…There could be consequences if it resists US pressure to cut off Iran again. Richard Goldberg, senior adviser at the Foundation for Defense of Democracies, a think-tank, argued in this blog that in 2012, Congress authorised any president to impose sanctions on SWIFT’s board of directors (which includes executives from some of the world’s biggest banks) if it refused to disconnect Iranian banks blacklisted by Washington.
As can be seen, the US can impose its will on SWIFT and use it as a financial weapon against its intended targets.
Europe Countering US Move on SWIFT
The US campaign against Iran and pulling out of the 2015 nuclear deal, however, has not been supported by the major countries of Europe, who rely on trade and imported oil from the Middle East and want the best deal they can get in buying it, To have Iran cut off from supplying oil to them and trading with them is a major problem for them, To counter the US move against SWIFT by banning Iran from it, the Europeans have attempted to set up a separate shadow trade settlement system.
On December 1, 2019, six European countries joined a barter system for the Iran trade. As reported by TRT World, the Paris-based INSTEX, which has yet to enable transactions, functions as a clearing house allowing Iran to continue to sell oil and import other products or services in exchange, to avoid US sanctions. Paris, London and Berlin on Saturday welcomed six new European countries to the INSTEX barter mechanism, which is designed to circumvent US sanctions against trade with Iran by avoiding use of the dollar.
As founding shareholders of the Instrument in Support of Trade Exchanges (INSTEX), France, Germany and the United Kingdom warmly welcome the decision taken by the governments of Belgium, Denmark, Finland, the Netherlands, Norway and Sweden, to join INSTEX as shareholders,” the three said in a joint statement. The Paris-based INSTEX functions as a clearing house allowing Iran to continue to sell oil and import other products or services in exchange.
This, in itself, is a step toward freeing the world from the US dollar hegemony that has lasted over 85 years.
This post offers commentary on the article, “The Root Cause of Central American Migration Is US Imperialism,” written by Suyapa Portillo Villeda and Miguel Tinker Salas, and recently published in Jacobin. Read the full piece here.
Earlier this week, Vice President Kamala Harris visited Guatemala as part of a series of foreign policy meetings regarding Central American migration. But despite the Biden administration’s promises to close the chapter on Trump-era policies by welcoming immigrants and building a more just immigration system, Harris quickly indicated that tight border restrictions are here to stay. Speaking to migrants in Central America, Harris’s message was explicit: “Do not come. Do not come.”
While Harris’s trip was ostensibly meant to begin discussions with foreign leaders around addressing the “root causes” of Central American migration, the overarching message she conveyed was that the United States will turn you back at the border if you try to come. (It’s worth noting that this is legally dubious; all migrants have a right to seek asylum at the US border under existing immigration law.) And even when discussing the “root causes” of migration, Harris continued to disappoint, focusing primarily on issues of corruption and lack of economic opportunity. As many immediately pointed out, Harris failed to recognize that the United States itself has long been one of the key actors animating these “root causes” in the first place.
Throughout the last century, they argue, the United States has been deeply involved in shaping a neocolonial reality in Central America, as the American economy relies heavily on cheap Central American labor. With this history in mind, Harris’s gestures towards expanding economic opportunity ring hollow – another justification for American-led development and economic policy more likely to favor multinational corporations than potential migrant populations. Ultimately, if we want to get serious about root causes, we must begin with US empire.
This post offers commentary on the article, “The Dream of a Unionized New Orleans Is Coming True,” written by Hamilton Nolan and recently published in In These Times. Read the full piece here.
Readers of Voices for New Democracy have long been grappling with the ongoing transformation of the American economy, beginning in the 1970s, towards a post-industrial society. Over the past decades, this has manifested in the decline of manufacturing, rapidly growing financialization, a massive shift towards the service sector, and a series of all-out assaults on organized labor. The American South has been especially hard hit by these trends, particularly in terms of the rights of workers, as Republican control of state governments have created legal regimes that keep wages low, precarity high, and maintain massive obstacles to organized labor.
Amid this trajectory, COVID-19 has been a major disruption, and it remains uncertain whether the fallout could help strengthen the position of workers or serve as a justification for further attacks on labor. That is why the work of unions in the South are so critical, and why the left must focus on these fights; since they represent a model that could upend this trajectory even in the heart of reactionary states.
Hamilton Nolan’s recent piece in In These Times is illustrative. The piece explores the growth of the Unite Here hospitality workers union in New Orleans over the past years, which is especially notable given the low union density across the state and the traditional challenges of organizing in a tourist economy in a right-to-work state. While Unite Here members and staff alike have experienced the fallout from the pandemic, the union has done remarkable work to support its members throughout these challenges, both by negotiating recall rights with employers and providing direct support services to members. All of this work is offering new visions for what the city’s hospitality industry could look like with an organized working class:
While Unite Here continues to face an uphill battle, its efforts on behalf of its members during the pandemic could help turn the tide for organized labor throughout the state. Union members are the only workers in the city who won guaranteed recall rights, which offers a strong incentive for more hospitality workers to unionize especially at a moment when many working people feel they have little left to lose. And if these local efforts prove successful in these critical right-wing strongholds, they will be key stepping stones to rebuilding a powerful labor movement on a national scale.
As Unite Here’s international president, D. Taylor, says:
On the one hand, exponential population growth, massive industrial expansion, and surging waste in our atmosphere (over the past century and a half) have forged an ecological catastrophe of existential proportions.
On the other hand, exploitation of “Global South” nations, extreme wealth polarization in every nation and worldwide, and persistent ethnic, racial, religious, gender and settler injustice have created a social catastrophe that stands between civilization and any effort to tackle this ecological reckoning.
Extinction Rebellion, Sunrise Movement and others bear witness to impending ecological collapse, saying we have only a decade to make amends. Otherwise, civilization as we know it will go the way of the Roman empire and others that, in their times, outgrew and overwhelmed Nature and suffered centuries-long dark ages in their eventual collapse.
Despite decades of inattention and little leadership from most nations’ politicians, certain other key entities are considering or making adjustments.
Among these are central banks (CBs). Whether from capitalist or socialist perspectives, many CB analysts and staffers and a growing number of governors recognize mounting ecological risks and, thus, the danger of economic collapse. They see the need to be proactive.
Few central bankers, however, seem to appreciate the social justice necessary for a true ecological renaissance. No doubt, this shortcoming reflects the primary goal of western bank systems, maximizing private bank profit.
The IMF, BIS and World Bank are run by the world’s central bankers, each voting according to the size of its economy. Of course, the US dominates. But, the matter of how to ensure adequate investment credit for the Global South — made even more apparent by the inequities of the current pandemic — is on the table but vexing for the financial elite. Despite rhetoric about a global climate crisis, most central bankers still find more ready focus in domestic concerns.
Below are some recent links with excerpts from various central bank climate commentators.
Yellen and Powell
Current Treasury Secretary Janet Yellen — the former Federal Reserve Chair (under Obama) — says, “President Biden has outlined an ambitious strategy to transition the United States to net-zero emissions and has mobilized the entire government to achieve it. At Treasury, our goal is to take this ‘whole-of-government’ approach and turn it into a ‘whole-of-economy’ approach”. Current Chair Jerome Powell, despite Republican criticism, also is on-board.
“The Bank of England is uniquely placed to explain the links and trade-offs between the low-carbon transition and other economic objectives, and to promote both where possible. It can retain its operational independence over monetary and financial policy even if the goals or parameters of policy are altered. Indeed, the choice of those goals is fundamentally a political question: political reform has modified the Bank’s purpose to suit historical and economic context in the past. The climate crisis presents an urgent change in context. The UK needs a central bank with a mandate which reflects that”
“The combination of debt, climate change and environmental degradation ‘represents a systemic risk to the global economy that may trigger a cycle that depresses revenues, increases spending and exacerbates climate and nature vulnerabilities,’ according to a new assessment by the World Bank, International Monetary Fund and others, which was seen by The Times. It comes after months of pressure from academics and advocates for lenders to address this problem.
“’We cannot walk head on, eyes wide open, into a debt crisis that is foreseeable and preventable,’ the United Nations Secretary General, António Guterres, said last week as he called for debt relief for a broad range of countries. ‘Many developing countries face financing constraints that mean they cannot invest in recovery and resilience.’”
“Finally, even monetary policy itself has begun to align with climate issues. Late last year, Sweden’s Riksbank announced a new climate-related exclusion policy. Similarly, the BOE (Bank of England) is expected to indicate later this year how it will account for the climate impact of its corporate-bond holdings. Several ECB (European Central Bank) decision-makers have called for climate risks to be incorporated into corporate bond purchases and collateral policy. And the NGFS (Network for Greening the Financial System) has just published technical guidance for “adapting central bank operations to a hotter world.”
“Most developing countries cannot do more due to financing constraints. As public spending needs shoot up, the pandemic has significantly cut their revenue. Recent IMF research found ‘larger output losses are experienced by countries with lower GDP per capita,’ partly due to ‘lower fiscal stimulus.’
“With limited tax and other revenue, developing countries will need to borrow more, increasing their already high public debt. As the IMF notes, ‘The international community [needs] to provide additional support through grants, concessional financing, and, in some cases, debt relief.’”
“In a sign of how far things have come, this week the Network for Greening the Financial System, which includes the world’s major central banks, published a ‘toolkit’ of ways monetary policy institutions can address climate change in their operations.
“As Klaas Knot, president of the Dutch central bank, told an FT (Financial Times) climate conference last week, ‘We shouldn’t be tempted to think that we are the primary actors here. The primary actors are really the governments.’ Central banks should follow, but first it is the job of democratically elected governments to lead.”