Now, amidst the most severe economic downturn since the Great Depression, the Trump administration is opening up private equity to retirement investments as a means of keeping these financial markets filled with cash. This should be viewed in conjunction with the CARES Act bailout of Wall Street, which handed trillions of dollars to major American corporations, as well as the unprecedented injection of trillions of dollars into the bond markets through the Federal Reserve.
Trump administration gives private equity firms access to 401(k) retirement funds
4 July 2020
In June, the US Labor Department announced that it would allow 401(k) retirement funds to invest in private equity firms.
Private equity companies are financial firms,
in many cases tied to a parent bank or other
larger financial institution, that are
unregulated. They serve as vehicles for
speculative activities, often high-risk bets that
promise a high return. They are a part of the
so-called shadow banking system that has
seen an explosive growth over the last 20
years.
Unlike pensions—so-called “defined benefit” plans that guarantee a set monthly income for retirees—401(k)s, “defined contribution” plans, are subject to the vagaries of the stock and bond markets, as are the benefits they yield to workers who pay into them. Opening up the $7.9 trillion in 401(k) assets to private equity funds increases the risk to workers that their retirement savings will be gutted or wiped out by a new financial crisis.
Private equity firms are heavily engaged in takeovers of companies, usually employing borrowed money and often carried out in opposition to the management of the targeted firms. Having acquired a company, the private equity firm as a rule loads it up with debt, extracts huge fees for the private equity owners, slashes jobs and wages, and then resells the zombie firm for a profit.
One example is Bain Capital, previously run by Republican senator and 2012 presidential candidate Mitt Romney. Bain has relied on leveraged buyouts to amass its $105 billion portfolio. Bain, however, is only the fifth largest private equity firm. Other examples include the Brazilian-American firm 3G Capital, which took over Burger King in 2010 and Tim Hortons in 2014, restructuring and merging both.
Private equity firms are heavily invested in start-up firms. SoftBank, the massive Japanese investment bank, has a private equity wing called the SoftBank Vision Fund, with over $100 billion of capital. SoftBank has invested in major tech-related start-ups such as Uber and WeWork.
The Labor Department’s decision to allow 401(k)s to invest in these markets was the result of an executive order, the “Regulatory Relief to Support Economic Recovery Executive Order 13924,” issued by Trump on May 19.
According to Lexology, a leading corporate legal news processor, the executive order “calls on agencies to provide or extend regulatory flexibilities that promote job creation and economic growth, and provide regulatory relief to businesses as they work to recover from the impact of the coronavirus.”Trump’s order essentially instructed federal agencies, including the Labor Department, the Department of Health and Human Services and the Environmental Protection Agency, to loosen regulatory standards so as to promote “economic growth,” i.e., corporate profits.
Lexology continues: “[T]hese directives provide important opportunities for businesses to engage with the regulatory agencies and help shape deregulatory activity and enforcement policy for the near future.”
Up to now, 401(k)s have been prohibited
from investing in private equity firms and their
activities because of the risk to the workers
whose retirement will depend on their 401(k)
benefits.
Among other things, Trump’s executive order allows federal agencies to engage in so-called “pre-enforcement rulings” in relation to corporate offenders. That is, if a company or financial institution is caught violating a federal regulation, it can negotiate a deal with the government before legal action is initiated. According to Lexology, this greatly reduces “enforcement risk,” i.e., it reduces or eliminates penalties for violations of labor and environmental regulations.
Investopedia reports that several financial advisors have expressed their opposition to the opening up of private equity firms to 401(k)s. They cite Robert Johnson, a professor of finance at Creighton University, who says that “it’s a mistake to give 401(k) investors access to private equity through their plans.” He adds, “Private equity structures are complex and opaque to the average investor.”
The Labor Department’s decision is a huge boon to private equity firms, which will now have access to the massive pool of assets held by 401(k) funds, which are overseen by asset management firms such as Vanguard and Fidelity.
The timing is no accident. Last year, before the pandemic, the Financial Times titled an article “The private equity bubble is bound to burst.” McKinsey estimated the same year that the private equity markets, pumped up with cheap credit and filled with money from investors seeking the highest returns, had ballooned to $5.8 trillion, more than the gross domestic product of Japan, the third largest economy in the world. Forbes published an article headlined “Private Equity Will Lead the Next Meltdown,” which called attention to the massive and unsustainable buildup of debt in these markets.
Now, amidst the most severe economic downturn since the Great Depression, the Trump administration is opening up private equity to retirement investments as a means of keeping these financial markets filled with cash. This should be viewed in conjunction with the CARES Act bailout of Wall Street, which handed trillions of dollars to major American corporations, as well as the unprecedented injection of trillions of dollars into the bond markets through the Federal Reserve.
The loosening of regulatory restrictions on financial players and investors, including allowing private equity firms access to 401(k)s, will open the door to even greater financial trickery and crime.
Who will pay when the highly indebted private equity world of start-ups goes bust? The answer is the workers who are invested in 401(k)s that are tied into these parasitic speculative operations.
Already, before the pandemic, a survey by Bankrate of American adults found that one in five people had nothing saved for retirement or emergencies. Less than a third of Americans have saved 11 percent or more of their annual income.
A 2018 article by the Wall Street Journal, “A Generation of Americans is Entering Old Age the Least Prepared in Decades,” found that high average debt in things like children’s education, unpaid mortgages and parents’ old age meant that Americans reaching retirement age were less prepared than they had been since the 1940s.
In 1979, 38 percent of private employees had a traditional pension. In 2016, just 13 percent of these workers had one. The average household in 2013, whose head was 55 to 64 years old, had a retirement fund of just $14,500, according to the Journal. That is barely enough to live for a few months in most major cities.
It is amid this disastrous situation facing retirees that the Trump administration has further eroded their economic security by plugging their 401(k)s into private equity, which will plunder workers’ already inadequate savings to increase profits and stave off insolvency.
World’s Largest Pension Fund Loses $165 Billion
in Worst Quarter
Shoko
Oda and Shigeki Nozawa
BloombergJuly 3, 2020
(Bloomberg) -- The world’s biggest pension fund
posted a record loss in the first three months of 2020 after the coronavirus
pandemic sparked a global market rout in the period.
Japan’s Government Pension Investment Fund lost
11%, or 17.7 trillion yen ($164.7 billion), in the three months ended March, it
said in Tokyo on Friday. The decline in value was the steepest based on
comparable data back to April 2008, reducing the fund’s total assets to 150.63
trillion yen. Foreign stocks were the worst performing investment, followed by
domestic equities.
The results come just months after the fund
revamped top management and revised its asset allocation to focus more on
overseas debt. The loss, which wiped out gains for the fiscal year, may attract
political attention as social security remains a major concern for tens of
millions of Japan’s retirees.
“The decline in domestic and foreign equities
led to a negative return for the fiscal year,” said Masataka Miyazono, the
president of GPIF. “Both equity markets performed strongly during 2019 even
under pressures from the U.S.-China trade negotiations. The global coronavirus
pandemic led to investors taking a risk-off stance.”
Overseas bonds were the only major asset to
generate a positive quarterly return. The securities gained 0.5%, compared with
losses of 0.5% for domestic bonds, 18% for local equities and 22% for foreign
stocks. In April, GPIF raised its asset allocation to foreign bonds by 10
percentage points to 25%, while keeping the target for foreign and domestic
stocks unchanged at 25%.
Naoki Fujiwara, the chief fund manager at
Shinkin Asset Management Co., said the losses were expected. Equities have
rebounded since March, so the pension fund should be recouping losses for the
April-June period, Fujiwara said.“The current portfolio is exposed to equity
volatility,” he said. “We’re in a low-yield environment right now, and will
likely be for the next two years, so maybe it’s alright for now, but in the
long run, the pension fund should correct the allocation of equities.”
Read more: An Ex-Goldman Bond Trader’s Quiet
Rise to Managing $1.6 Trillion
Under the new guidance of GPIF President
Miyazono and Chief Investment Officer Eiji Ueda, the fund must navigate a
volatile market torn between an ongoing coronavirus pandemic and promises of
economic stimulus measures. Fears of a second wave of outbreak are already
hampering the global equity markets recovery.
The GPIF isn’t rushing to buy foreign bonds,
which are 3% below its allocation target, Miyazono told reporters in Tokyo. The
fund has a long-term investment timeframe much longer than 10-20 years, he
said, adding that there will be no impact on pension payouts from a single
year’s results.
Investments in ESG indices reached a record
high of 5.7 trillion yen. The GPIF, a leader in socially responsible investing,
has invested in indexes such as the FTSE Blossom Japan, MSCI Japan ESG Select
Leaders and MSCI Japan Empowering Women.
During the January-March quarter, the MSCI
All-Country World Index of global stocks slumped 22%, the worst since the
global financial crisis. Yields on the 10-year U.S. Treasuries slumped 125
basis points to near record lows during the same period, fueled by
unprecedented measures from the U.S. Federal Reserve and intense demand for
haven assets.
From April, the GPIF
has adjusted its portfolio, setting a general target to keep 25% each in all
four asset classes, with the allocation of each assets allowed to deviate by
different ranges.
“During his time running mortgage lender OneWest, which he
bought with a group of investors for pennies on the dollar before selling it
for a personal profit of many millions, Steven Mnuchin & Co. foreclosed on more than 36,000 homeowners. Because (1) that’s a lot of people kicked out of a lot houses
and (2) everyone loves a good nickname, Mnuchin has earned the moniker, in some
circles, “Foreclosure King,” or ”Foreclosure King of California,” if you’re not
one for brevity.” BESS LEVIN
Steve Mnuchin, foreclosure king, now runs your US Treasury
BY
MARK PLOTKIN
Where do
they find these people? Appointed by the president as Cabinet members, many
have past lives and records that should immediately disqualify them for any
high office.
Someone who
has not been given the attention he so richly deserves is Steven Mnuchin, the
new secretary of the Treasury.
Only one
Democratic senator voted for him: Joe Manchin of
West Virginia. Every other Democratic senator voted a resounding
"no."
Sen. Tim Kaine (D-Va.) said the following of Mnuchin: "His
complicity in the 2008 financial crisis raises serious doubts."
Sen. Robert
Menendez (D-N.J.) went further:
"He was part of the cadre of corporate raiders that brought our economy to
its knees."
Of the
astute businessman's failure to disclose $100 million in an overseas tax haven,
Menendez added: "One does not go and create offshore entities at the end
of the day other than to avoid, in some form or fashion, the tax laws of the
United States. That's pretty simple."
Sen. Tammy
Duckworth (D-Ill.) did not hesitate to call Mnuchin "greedy" and
"unethical." She backed it up with these blunt words: "Whether
illegally foreclosing on thousands of families, skirting the law with offshore
tax havens or helping design tactics that contributed to the 2008 financial
crisis, Steve Mnuchin made a career — and millions of dollars — pioneering
increasingly deceptive and predatory ways to rob hardworking Americans of their
savings and homes."
Seemingly,
Mnuchin was another one of President Trump's campaign thank-yous. He was one of
the very few corporate executives who would actually step forward and be seen
raising money for Trump, even going so far as becoming the campaign's national
finance chair.
Before that,
though, Mnuchin distinguished himself by making out like a bandit during the
worst financial crisis our country has faced since the Great Depression.
This is all
well-documented by David Dayen, author of "Chain of Title: How Three
Ordinary Americans Uncovered Wall Street's Great Foreclosure Fraud." In an
exhaustive article in The Nation, Dayen chronicles how Mnuchin got fabulously
rich while hundreds of thousands lost their homes.
In 2008,
Mnuchin made a deal with the Federal Deposit Insurance Corporation (FDIC). He
and his investment group bought a predatory lender named Indy Mac, renaming it
"OneWest." They then started foreclosing on homeowners.
While doing
that, he "harvested fees for appraisals and inspections and late payments,
and got protected by a federal backstop. The FDIC lost $13 billion on Indy Mac;
Mnuchin and company made $3 billion in profits."
To make this
tidy sum for himself, Mnuchin used something called "servicer-driven
defaults." This practice entailed "telling homeowners they must miss
payments to get help, and when they do, [the banks] move to foreclose."
The other
devious ploy is something called "dual tracking." This is "where
servicers negotiate modifications and pursue foreclosures at the same time."
If that were
not enough, Dayen cites "a decided racial component. 68 percent of OneWest
36,000 plus foreclosures in California were in non-white areas." In
addition, "OneWest was a market leader in foreclosing on the elderly: its
subsidiary Financial Freedom carried out a disproportionate number of reverse
mortgage foreclosures, which target seniors to suck out their home
equity."
Finally, to
top it off, OneWest engaged in thousands of "robo signings." This was
the odious and fraudulent practice of signing sworn affidavits while not
reviewing the documents. Some were signed at "30 seconds a clip."
This practice was done "750 times a week on eventually 36,000 plus
loans."
Dayen claims
that "millions of homeowners were thrown out of their homes based on false
documents."
So the long
and short of this is that one Steven Mnuchin, who led and sanctioned these
horrible business practices, is rewarded with a position that is fifth in the
presidential line of succession.
Couldn't
Trump find someone who didn't have such a record? Someone who didn't benefit
from the misery of others?
The
president has demonstrated once again that he so sorely lacks good judgment,
and, contrary to his claims, has no apparent skill in picking talented or
qualified people to serve our country.
Mark Plotkin
is a contributor to the BBC on American politics and a columnist for The
Georgetowner. Previously, he was the political analyst for WAMU-FM,
Washington's NPR affiliate, and later became the political analyst for WTOP-FM,
Washington's all-news radio station. He is a winner of the Edward R. Murrow
Award for excellence in writing.
Here's Why Treasury Nominee Steve Mnuchin Has Been Called
the 'Foreclosure King'
Steve Mnuchin, Donald Trump’s pick
for Treasury Secretary, is testifying in a Senate confirmation hearing on
Thursday. The banker, Hollywood producer, and former Goldman Sachs partner is expected to
be grilled on a wide range of topics.
But one subject that’s bound to come up is particularly
likely to resonate with everyday Americans: How many people lost their homes
unfairly due to Mnuchin’s actions when he was CEO of a bank known as a
“Foreclosure Machine”?
In late 2008, while the global economy was collapsing,
Mnuchin and some partners purchased the failing bank IndyMac and turned it
into OneWest, which grew into the
largest bank in Southern California. OneWest developed a reputation as a “Foreclosure
Machine,” and Mnuchin himself has been dubbed the “Foreclosure
King.”
Earlier this month, a 2013 memo from the California
attorney general’s office was leaked indicating that
OneWest allegedly engaged in “widespread misconduct” to boost foreclosures,
including the backdating of mortgage documents. In light of the memo, the
nonprofit watchdog Campaign for
Accountability called on the Department of Justice to investigate OneWest for
“using potentially illegal tactics to foreclose on as many as 80,000 California
homes.”
Millions of
foreclosures took place in the aftermath of the Great Recession, but critics say
that OneWest stood out compared to other lenders with aggressive tactics and a
particularly high foreclosure rate. A ProPublica
report released after Mnuchin was nominated to lead the Treasury said that
OneWest “was responsible for 16,200 foreclosures on government-backed reverse
mortgages, or 39 percent of all foreclosures nationwide, from 2009 through late
2014, even though it only serviced about 17 percent of the loans.”
“Foreclosures happen in an economic crisis. But OneWest
was different. It quickly gained a reputation as a foreclosure machine,” Sen.
Elizabeth Warren (D-Mass.) said during a recent Senate forum. “Even when compared to
the other financial institutions that aggressively and illegally tossed
families out of the houses, OneWest was notorious for its belligerence and for
its cruelty.”
The Wall Street Journal noted that
OneWest Bank started foreclosure proceedings on some 137,000 homes nationwide
between early 2009 and the middle of 2015, but pointed out that OneWest
accounted for only 1.8% of all foreclosure starts during that period. What’s
more, data shows that foreclosures were spiking at subprime giant IndyMac even
before Mnuchin and his partners bought the bank, and that a large percentage of
the mortgages they acquired were hopeless.
Even so, there is evidence that OneWest preferred simple
foreclosures rather than modifying loans to help people keep their homes, again
per the Journal:
In a 2011 letter to
the FDIC, other regulators and lawmakers, people who said they worked at
OneWest claimed it “actually makes more money by foreclosing than they would if
they allow loan modification.” The letter said OneWest’s loan-modification
staff “routinely shreds loan modification applications” and lies to homeowners
when they call OneWest.
Mnuchin’s would-be boss, Donald Trump, also has a history
of welcoming foreclosures and real estate market collapses. During the presidential
campaign, a segment from a 2006
audiobook from Trump University came to light
in which Trump said, “I sort of hope” there’s a real estate crash because “if
there is a bubble burst, as they call it, you know you can make a lot of
money.”
(Trump University, a for-profit real estate education venture widely decried
as a scam, went out of business and was sued by
former students and the New York Attorney General. Soon after winning the
election, Trump agreed to pay a $25 million
settlement.)
In prepared remarks read at the Senate Finance hearing on
Thursday, Mnuchin defended his role at OneWest, claiming that the bank modified
loans to help 100,000 clients keep their homes. “I have been maligned as taking
advantage of others’ hardships in order to earn a buck,” said Mnuchin, whose net worth has
been estimated at about $400
million. “Nothing could be further from the truth.”
Mnuchin argued against the idea that he “ran a
‘foreclosure machine,’” during the hearing. “This is not true. On the contrary,
I was committed to loan modifications intended to stop foreclosures. I ran a
‘loan modification machine.’”
“FORECLOSURE KING” STEVEN MNUCHIN DOESN’T APPRECIATE HIS TOTALLY
ACCURATE NICKNAME
The nominee for Treasury secretary wants to know why no one ever
brings up all the good stuff he did at OneWest.
JANUARY 18, 2017
During his time running mortgage lender OneWest, which he bought
with a group of investors for pennies on the dollar before selling it for a
personal profit of many millions, Steven
Mnuchin & Co. foreclosed on more than 36,000 homeowners. Because (1) that’s a lot of people kicked out of a lot houses
and (2) everyone loves a good nickname, Mnuchin has earned the moniker, in some
circles, “Foreclosure King,” or ”Foreclosure King of California,” if you’re not
one for brevity.
And if Mnuchin,
whom Donald Trump has
nominated to run the Treasury Department, can be honest? It really pisses him
off, as do all the other criticisms that have been lobbed in his direction since
Trump put him up for the job. That includes, but is not limited to, that leaked
memo from the California attorney general’s office alleging that OneWest
backdated documents so they could push more foreclosures
through. Not to mention the fact that no one has talked about the great, dare
he say, saintly work
he did running the bank.
Luckily, Mnuchin
will have a platform tomorrow during his Senate confirmation hearing to get these gripes off his chest:
ALL CORPORATIONS AND ALL
BILLIONAIRES WANT WIDER OPEN BORDERS, FIGHT AGAINST E-VERIFY AND DEMAND AMNESTY
TO KEEP WAGES DEPRESSED!
"Since 2009, global dividend payouts have increased by approximately 95 percent, almost doubling in value. The same period has seen an escalating assault on the conditions of the working class, epitomized by the growth of two-tier wage systems among autoworkers in the United States, the uberization of vast sections of the working class via the proliferation of casual and temporary jobs, and the growth of corporations like Amazon, whose profits are based upon the ever-more precise use of automation to increase the conditions of exploitation of their workforce."
Record global dividend payouts fuel rising
social inequality
A new report published
this week by the financial advisory firm Janus Hendersons shows that
the world’s largest corporations
will hand out $1.43
trillion in dividend payments to their shareholders in 2019, setting
a new record.
Ten years after the
global financial crisis began in 2008, wages continue to stagnate, poverty is
rising, and workers everywhere are lyingly told that there is no money for such
elementary social needs as healthcare, education and pensions. At the same
time, the class of corporate executives and billionaire shareholders continues
to rake in incredible sums of money.
According to the report,
which is based on data calculated for the world’s 1,200 largest companies,
total dividend payments surpassed half a trillion US dollars in the second
quarter of this year, reaching $513 billion. To place this number in context,
the amount handed out directly to shareholders in 2019 will be more than the
annual economic output of Spain, a country of 47 million people. In just three
months, the 20 largest companies alone paid $87.9 billion in dividends, roughly
twice the total economic output of Tunisia (population 11.5 million) for an
entire year.
Dividends are payments
made by companies to their shareholders on a quarterly or annual basis, with
every share entitling its owner to receive an amount determined by the
company’s board. The money for these payments does not arise out of thin air.
It is extracted from the collective labour of the working class. Its source, as
Karl Marx discovered more than 150 years ago, is the surplus arising from the
difference in value between what the workers are paid in wages and what they
produce in the course of their work.
The figures contained
in the report demonstrate how the share market serves as a mechanism for the
transfer of wealth up the income scale from the working class to the wealthiest
sections of society. The overwhelming majority of shares of all these
corporations are dominated by a relative handful of investment firms and hedge
funds which are controlled by a tiny layer of billionaire and multi-millionaire
shareholders.
One hundred years ago,
the Russian Marxist revolutionary Vladimir Lenin, analyzing the development of
imperialism at the turn of the 20th century, noted that an essential feature of
this period of capitalist decay was an “extraordinary growth of a class, or
rather, a stratum of rentiers, i.e., people who live by ‘clipping coupons,’ who
take no part in any enterprise whatever, whose profession is idleness.” Today,
the processes then analyzed by Lenin have developed to a far greater level of
maturity.
The growth of dividend
payments is just one expression of how corporate profits are
being used, not to re-invest into productive capital, but for
essentially parasitic financial activities to directly enrich the
corporate and financial elite.
The financial
investment firm Moody’s reported last June that stock buybacks in 2018 by the
S&P 500 companies (500 US-based companies that comprise around 80 percent
of the US market) had doubled from the previous year to reach $467 billion in
the year to March 2019. Stock buybacks occur when companies purchase their own
stock in order to artificially inflate their own share price. Their sole
purpose is to increase the wealth of shareholders by raising the price of the
shares that they own.
BLOG: TRUMP'S BANKSTER
REGIME IS AS INFESTED WITH GOLDMAN SACHS PEOPLE AS OBAMA'S WAS JPMORGAN
Goldman Sachs data
published at the end of July shows that in the 12 months ending March 31, the
same S&P 500 spent 103.8 percent of their free cash flow on dividend
payouts and stock buybacks. In other words, they spent more than their income
in direct handouts to investors over the same period. This is the first time
that this has taken place since the period of 2006–2008, in the immediate
lead-up to the 2008 financial crash produced by the criminal speculative
activities of the corporate and financial elite. In the period since, these
activities have not only continued, they have intensified.
The policies of
governments around the world are oriented toward the artificial inflation of
the share market, with central banks in the United States, Europe and Japan
taking on unprecedented levels of debt to maintain the flow of ultra-cheap
credit to fuel financial speculation. Prior to 2008, the balance sheet of the
European Central bank stood at approximately 1 trillion euros, or ten percent
of the economic output of the euro zone. This has since more than quadrupled to
4.7 trillion euros, or 40 percent of output.
The report refutes the
lying claims by the same governments that workers must accept the slashing of
social programs and conditions because there is simply no money to fund them.
For example, dividend payments by French corporations in the second quarter of
2019 reached $51 billion, the highest amount ever. The same week as the
report’s release, the French media has been filled with accounts of the “busy
week” of President Emmanuel Macron following his return from summer holidays,
and the demand that he make progress on his government’s agenda of slashing
pensions and completing education reforms to cut spending. But the dividend
payouts of the largest French corporations in 2019 alone would cover two thirds
of the entire spending on pensions for the year.
Since 2009, global
dividend payouts have increased by approximately 95 percent, almost doubling in
value. The same period has seen an escalating assault on the conditions of the
working class, epitomized by the growth of two-tier wage systems among
autoworkers in the United States, the uberization of vast sections of the
working class via the proliferation of casual and temporary jobs, and the
growth of corporations like Amazon, whose profits are based upon the ever-more
precise use of automation to increase the conditions of exploitation of their
workforces.
The two processes are,
fact, directly connected. The increased exploitation of the working class is
the necessary basis for the funnelling of profits into the hands of the
super-rich.
For example, Ford Motor
Company’s announcement of the layoff of 12,000 workers across Europe at the end
of June of this year was greeted with rapture on share markets. Share prices
immediately rose by three percent, as the financial investors anticipated that
the increased exploitation of the remaining workforce would free up cash for
higher dividend payouts and stock buybacks.
This process, however,
has depended upon one essential condition: the continued suppression of the
class struggle and resistance by workers, which for decades has been carried
out by the trade unions, the bought-and-paid-for allies of the companies and
governments in every country. Internationally, however, the grip of these
pro-corporate tools is breaking up as workers are entering into struggle
against intolerable conditions of social inequality and the assault on their
jobs and living standards.
The year 2019 has
witnessed an upsurge of working-class struggle, from the “yellow vest” protests
in France, to teachers’ strikes in the US, to the mass protests in Puerto Rico,
Algeria and Sudan, to the growing opposition among US autoworkers to the
conspiracy of the automakers and the bribed United Auto Workers union to impose
further concessions.
These struggles will
continue to escalate. But the precondition for their success is for workers to
understand that they face not just one company, union or government, but the
entire capitalist system, which depends upon the immizeration of the working
class for the enrichment of the elite. The alternative is socialism—the
expropriation of the ill-gotten gains of the financial oligarchy and the
transformation of the gigantic corporations into public utilities, controlled
democratically by the working class, and organized to meet social need.
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