Across the world, we are watching a return to the most unapologetic inequities in Western imperialist heart-lands. These are the societies where many workers were able at one stage following the Second World War to attain at least a reasonable life-style. However as the depth of the crisis of capital peaks higher and higher, a return to the cloth cap and 1930’s penury is ever daily a new reality for workers in the USA.  We will illustrate this in 3 short fragments:
    The new reality of the unemployment targeting first and foremost black Americans; the pensions crisis that brings to mind the specters of the elderly in 19th century work-houses; and finally the huge crisis in health care.

1) The Depth of Today’s Unemployment in the USA – Black Americans Targeted First.
    As the USA economy is led by the Bush Government into further attacks on the workers, the already worst off are made even worse off. Over 28 months, the results of the recession have been the loss of 2.6 million jobs, of which 90% was in manufacturing. It is no surprise that it is black Americans who are paying the worst of the brunt. It is the manufacturing jobs that have the best wages, and their elimination is an on-going facet of the crisis of the USA imperialist economy, that we have previously discussed in issue 4, "ALLIANCE!" Monthly.

    A measure of the desperation for these jobless black Americans is that they have insisted on trying to find new jobs, even if they are in the “soft” economy. The rise in unemployment rates amongst the blacks is twice as fast as that of white workers. It is also the higher paying factory jobs that have been eliminated rather than jobs of low-wage workers and women previously on welfare in the 1990's. The human devastation can only be imagined.

    In Indianapolis, Autoliv, a Swedish seat-belt factory closed a plant, laying off 350 workers, more than 75 percent of them black. Most were hired in the late 1990's when the unemployment rate in Indianapolis was only 2 percent. At that time, as labor was scarce in a relatively more boom economy, Autoliv, hired young men who had no high school diplomas. As Michael Barnes – director of an A.F.L.-C.I.O. training programme for laid off workers says:

    Apart from anything else the loss of health coverage is a huge threat to these families:     And yet, all the various States are struggling with deficits. So, no surprise that they have initiated or are planning cut-backs in Medicaid, which will hit the unemployed again - hard.
Continued on page two.

    Not only that but cuts in State Children’s Health Insurance Program (SCHIP) will make the situation even worse as the poorest children are helped by that. Already in Spring 2003 cuts were being made that were planned to affect as many as 1.7 million recipients who will:


    Using the pretext of the Medicaid under funding crises in the states, the Bush administration is going to lend extra Medicaid money only if those states will combine Medicaid and SCHIP into one block-grant program for the next 10 years. This will ensure that states get fixed dollar amounts rather than matching state dollars with federal dollars. So – effectively capping federal Medicaid and SCHIP – regardless of growth in demand.

    And Bush insists that these states must pay back, by receiving fewer dollars in the last three years of the block grant ­program. []. But this is just one fragment of a game of pretence, where the Bush administration can erode further the future of Americans. For the Bush administration is playing a game of bait and switch with American working families.

    This time the “bait” is a much touted “expansion” of Medicare that will purportedly provide retired persons with prescription medicine coverage.  The “switch” lurking behind the “bait” is nothing less than the privatization and destruction of the entire Social Security System.

    At the same time as “the biggest expansion of Medicare since its creation” is being hailed in the media, President Bush’s Commission on Social Security has presented an initial report recommending the privatization of Social Security.  Arguing that public funds cannot continue to guarantee Social Security benefits and predicting government default and bankruptcy, the Bush Commission urges the slashing of benefits, the postponement of retirement age, and the raising of taxes as the only solution to this ‘dilemma.’   The Commission then goes on to present a plan by which government benefits would be reduced and individual tax-payers’ Social Security taxes would be placed into special accounts that would be invested in the stock market.

    Thus, the retirement income of millions of Americans would depend on the whims of the stock market.   Meanwhile brokerage firms will garner billions of dollars in fees as the entire Social Security Trust would convert into a multi-trillion dollar gambling pool.  A gambling pool in a wager that, as the recent 401K scandal demonstrated may well turn up craps.

    Adding to the outrage is the little mentioned fact that financially the Social Security System is functioning successfully and today has a surplus in excess of $1 trillion.  Hence, the dire predictions of an economic apocalypse overwhelming the Social Security System are nothing more than a smoke screen behind which the Bush administration seeks to deprive American workers of their hard-earned retirement benefits.  Not to be left out of the game, the Democratic Party has countered Bush’s attack on Social Security with a privatization plan of their own.  All of this makes the recent self-congratulatory round of applause over the “expansion of Medicare” to include prescription drugs reek of even more cynicism than is usual in Washington.  And the stench gets worse when one closely examines the lauded plan.  Rather than alleviating the economic burden faced by millions of elderly and retired persons, the new Medicare drug program will provide scant assistance and, indeed, only further the drive towards privatization.

    As outlined, the new Medicare drug benefit will require that retirees pay thousands of dollars into the system.  Anyone enrolling in the plan will be required to pay some $500 per annum in premiums, on top of an additional $300 deductible.  Moreover, enrollees would have to make co-payments approaching 50% on all expenses up to $4,500.   It should be noted that this is what awaits those who can afford to enroll in the new system.   For the vast majority of American retirees and senior citizens, this new “expansion” of Medicare means nothing.  However, the new plan means quite a lot to insurance companies and HMOs who stand to profit substantially.  Private health care companies will be permitted to enroll retired members into their own prescription drug programs and gain tax dollars as profits.

    So, in typical advertising hype double-speak, the great ‘advance’ and ‘extension’ of Medicare and Social Security, actually signals the destruction of these self-same programs.  Bait and switch.  ‘Round and ‘round she goes.  Where she’ll stop, the capitalists know. . . their pocketbooks.


    In general Western societies have increased the life span of their people.  But correspondingly
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    the care of the elderly has become an ever-increasing problem. As capitalism erodes all human bonds and erects instead only a cash relationship, traditional family bonds of even 30 years ago, become so weak that the elderly face an ever more lonely future. A large portion of the work force has tried to defend its old age by paying into pension funds largely operated by the big companies.
Only one problem, the companies have been ‘milking that fund’. What have they used that wealth of funds for? They have generally used it for inflating their own “profit” margins, to pay for laying off workers, and surprise-surprise – to give other capitalists (called “benefits consultants”) a golden hand-out:

    A concrete example of raiding the pension funds to “pay for cut-backs”, can be cited of Lucent Technology:     Another example shows how the capitalists help firms that has “advised them” how to hide-dip into funds:     Not only have the company executives been dipping their hands into the funds, they have also simply not been topping them up any longer. They relied on “voodoo-ENRON-accountancy”, to “show” a satisfactory paper bottom-line.     Other recent tricks including offering the employees a lump sum rather than monthly payments. These may be offered in a way that the employee thinks is attractive, but in reality the deal only favors the company: Continued on page four.

    In addition to that, employers switched to a system whereby pensions were no longer calculated by the “traditional formula -- which multiplies final salary and years of service”, but a system with  a “cash-balance plan” which gives each employee a theoretical "account balance" that grows by a certain percentage each year.”

    This reduced the growth of the pensions helping the companies, which enabled the companies to estimate for its stock-holders, its liability for pensions as less – transferring the “excess” into profits.

    And finally, companies are trying to reduce their pension loads even further by asking Congress to reduce the rate at which calculations are made to keep the funds full.
    All these machinations makes the future even less precarious for the elderly. Having given their life blood to capital, there is no return.     Can there be anything more fundamental for workers than a job providing adequate for a family’s food warmth and shelter; freedom from health care worries; and security for old age? ______________________________End_______________________________________