From the belly of the beast: University staff, students resist Great Recession attacks

A militant struggle has erupted in the University of California, which comprises 10 public sector universities located in different cities across the state, with a total of 220,000 students and 170,000 faculty members and general staff. UC students have been hit by a sudden rise in tuition fees of over 30%. Both faculty and non-teaching staff face attacks on their pay and working conditions, as well as layoffs.

The University Board of Regents, whose 26 members are appointed by California state governors for 12-year terms and which is accountable to no one, has forced through these attacks. The regents are largely drawn from the world of big business. The board’s current chairperson (until 2017) is Russell Gould, former senior vice-president of the Wachovia Corporation, the fourth largest US bank until September 2008, when it faced collapse with US$74 billion in accumulated debts and was taken over by the Wells Fargo corporation (now the fourth largest US bank).

To understand the significance of the UC struggle, we have to look at the wider context of capitalist ruling class strategy to make the working and middle classes bear the brunt of the current “Great Recession”. Banks which primarily make loans to other businesses and money out of home mortgages, like the Big Four (Bank of America, Citibank Wells Fargo, and JP Morgan), are still struggling. The American Banking News website reported on November 20 that the Big Four had hired 17,000 employees in 2009 “in order to prepare for the growing number of defaults” on home mortgages, adding: “With over 6.9 million households overdue by more than 30 days in October or being foreclosed upon (over 12% of all households in the US with mortgages), needless to say job demand is huge, and that will continue to rise as Alt-A loans [mortgage loans made at initial low rates on the basis of borrowers’ credit-worthiness rather than actual income — DA] due for re-sets explode in the first half of 2010.

“This doesn’t even take into account a large, unknown number of people who have stopped paying on their mortgages but who the banks have not sent into foreclosure due to how it would affect their bottom line… From a hired worker standpoint, it’s one of the few jobs offered in a difficult market which includes job security for its duration, as it’ll take time to work through the enormous load of re-set and delinquent loans either out there now or about to be triggered.”

Stock market soars

But the big Wall Street financial concerns — (Goldman Sachs, Morgan Stanley and the investment arm of JP MorganChase), the very ones the capitalist government poured hundreds of billions into — are posting profits once again at the levels of three years before last year’s collapse. As a result the stock market has soared. Mainstream economists have noted that these Wall Street investment banks are once again making money by speculating. The speculation is fueled by government guarantees into the trillions to cover any losses, and very low interest loans from the Federal Reserve. The Wall Street merchant banks are once again doling out billions in “bonuses” to executives.

A recent disclosure about President Barack Obama’s Treasury secretary, Timothy Geithner, adds fuel to the fire. It turns out that when he was head of the New York Federal Reserve Bank as the financial sector bailout began last year, he was in charge of funneling billions into the American Insurance Group. This firm insured the speculation of big banks like Goldman Sachs. As the speculations crashed, AIG was left holding the bag. Geithner backed up AIG by guaranteeing to Goldman Sachs the full paper value of its now worthless speculative investments. Goldman Sachs got a massive inflow through AIG on top of the direct amount it got in bailout money from the government.

As the rich are getting richer, the rest of us in the US are still mired in the Great Recession. Official unemployment jumped to 10.2% in October. If those who had not looked for work in the previous four weeks were counted, as well as those forced to work less hours or part-time, the rate would be 17.5%. Even the White House says unemployment will remain high well into next year. Blacks, Latinos and the young have been especially hard hit, with unemployment rates double the official figures, and higher in some of the poorest communities.

Another expression of the pain working people are suffering was the recent disclosure by the Department of Agriculture that in 2008, 50 million people in the US went hungry. (The government never uses the word “hunger” since Ronald Regan declared that “There is no hunger in America”. Rather they call it “food insecurity”.) The biggest groups suffering from hunger were households headed by single mothers. Some capitalist pundits have sought to downplay this crisis, claiming that most were not going hungry all of the time but only a few days each month. These figures are for 2008. When that year drew to a close, the official unemployment rate was about 7%. In 2009 it has gone steadily up, and without doubt the number going hungry right now is much higher.

High unemployment means lower wages. The whole working class is fearful, including those now working, for their jobs and homes. From the point of view of workers, the over $1 trillion in government spending since the crisis began, is going mainly to the rich. The “stimulus” money hasn’t stemmed the rise in unemployment. The result is deep anger against not only Wall Street, but the government.

Right-wing offensive

The right wing, including the Republicans, are beating the drums against “government”, by which they mean all social programs, but they are getting a hearing because of the bailouts of the rich. The Republicans oppose any health insurance reform, but they can muddy the waters by charging that reform means more government spending, which appears to many to be one more giveaway to the rich.

And, as the health care reform bills now stand, they are right. The House bill is a boondoggle for the insurance companies. It would force to most US citizens to get health care insurance, and subsidise with government funds those who have low incomes. The insurance companies would get tens of millions more customers, some of whom would partially pay the companies with government money. The Senate bill is worse. Both bills would leave millions without access to health care. Whatever bill is finally passed, it will lock in the insurance companies’ hold on health care for the foreseeable future.

The so-called public option for government insurance in the House bill is a fraud. Only those who do not have insurance from their employers could opt for it. Other requirements would have to be met, so the estimate is only two percent of the population would be eligible. Moreover, the “public option” contains restrictions so that it would not compete with private insurance. The insurance companies are still opposed, because they don’t want even the idea of government insurance to be broached.

The Republican attack has not been answered by Obama and the Democrats. Instead, they have capitulated to the right-wing attack, not just on health care but on a host of other issues. With soaring unemployment and home foreclosures, more and more pro-capitalist economists are coming to the conclusion that a vast new program of government spending has to be undertaken to really stimulate consumer demand through job creation, and massive new funds need to be spent to protect education and other aspects of the social wage. But this has no more chance of being passed or even proposed by the neoliberal economic team around Obama composed largely of bankers, than the chances are of a snowball in hell.

The far right has also been emboldened. The Southern Poverty Law Center, which tracks such thing, reports a rise in right-wing armed militias. One of these sports T-shirts advocating assassination of Obama, using a biblical quote as a transparent disguise. If a left-wing, African-American or Muslim group, say, formed an armed self-defence militia, there would be an instantaneous outcry from the administration and Congress, and it would be forcibly disbanded and its members jailed with long sentences as “terrorists.”

As the ruling class shifts the burden of the Great Recession onto the working and middle classes, the masses are stunned. Everyone is trying to find individual solutions at this point in time. In this context, the struggle which has broken out in California can be a harbinger. Part of the offensive of the capitalist class is against the social wage, including government-funded education. Cutbacks to all levels of education are severe and getting worse across the country, but particularly in California. The drastic attacks on the California state university system have provoked a militant direct action response.

UC battle

November 18, 19 and 20 were targeted by a coalition of UC faculty, general staff and students as days of protest. Students led the way. When the Board of Regents met on November 19 at UC Los Angeles to vote on raising tuition fees and spending cuts, there was a large protest, with students pounding drums and blocking exits at the building where the meeting was held, leading to police violence and arrests. Occupations of administrative buildings occurred at other UC campuses up and down the state.

A four-day occupation at UC Santa Cruz ended on November 22 when police threatened to make arrests. On November 20, about 40 students occupied Wheeler Hall at UC Berkeley, while hundreds gathered outside in solidarity in pouring rain, and formed a human barrier between the cops and the building. Cops made arrests as the occupation ended, and some were charged with burglary. A protest of the arrests was set for November 23.

The students and workers who are most affected are those who can least afford higher tuition and job cuts. Thus it is natural that African Americans, Latinos and other people of colour have stepped forward in the actions. Mass rallies and teach-ins were the main feature of the struggle on these three days.

It was as though students had some knowledge of the student struggles of the 1960s and early 1970s, and suddenly adopted tactics used four decades ago. The organisation of the protests has been somewhat chaotic. It is to be hoped that a more cohesive leadership will emerge in the coming days.

A meeting of representatives of students, faculty and campus workers was held on October 24. This meeting projected a system-wide strike on March 4. This date has become the target for the next major action, although there will undoubtedly be continuing protests leading up to that action. The idea is to reach out to involve all public schools in the state, including elementary and high schools, the other public university system, the California State University (comprising 23 campuses, with about 417,000 students and 47,000 faculty members and staff), and the community colleges – all of which have been hit in the crisis.

The actions in the University of California system have received wide coverage throughout the nation. There are indications that students from other state university systems, in New York and elsewhere, may be joining in the March 4 action. While the working class as a whole remains stunned by the economic crisis and looking for individual solutions at this time, the sudden emergence of these actions on the campuses are a harbinger of the kinds of actions we may see from other sections of working people in the months and years ahead. No predictions can be made, but an important example has been set.

[The title of this regular column, “From the belly of the beast”, was how the great Cuban fighter against US imperialism, Jose Marti, signed his letters to friends back in Cuba when he was in the US.]