[Marxism] Unions condemn delegates on crisis

[Greg McDonald <sabocat59@xxxxxxx>]

 From The Times
January 30, 2009
Unions condemn delegates on crisis
Robin Pagnamenta

The gloom surrounding this year’s World Economic Forum descended into  
confrontation yesterday as international labour leaders launched a  
withering attack on the 1,400 business executives and 41 heads of  
government at Davos over what the labour leaders alleged was their  
failure to respond effectively to a deepening crisis of their own  
creation.

Guy Ryder, the general secretary of the International Trade Union  
Confederation (ITUC), said that the current financial turmoil had  
triggered a social timebomb that would lead to deepening civil unrest  
and soaring crime.

The comments from the confederation, which represents 168 million  
workers in 157 countries, are the most ferocious example yet of a  
backlash that has persuaded many who attend frequently to stay away  
from Davos this year. Yesterday Alistair Darling, the Chancellor,  
became the latest political figure to stay away from the meeting,  
after a similar move by David Miliband, the Foreign Secretary.

Mr Ryder, speaking as strikes involving hundreds of thousands of  
workers erupted across France and Germany, told The Times: “We are on  
the road to serious social instability, which could be extremely  
dangerous in some countries to democracy itself.”

He said: “Davos does not make me at all confident. I don’t see any of  
the leadership here that is needed to get us out of this crisis . . .  
There is very little contrition here.”

The ITUC warned that around the world more than 50 million jobs could  
be lost this year and that more than 200 million people would be  
driven into absolute poverty. The confederation said that the  
financial crisis had arisen because of “rampant speculation and  
financial profiteering” and that new global financial architecture  
needed to be established to “support regulation and ensure coherence”.

Sharan Burrow, the president of the Australian Council of Trade  
Unions, said that the world was now witnessing the human cost of  
“casino capitalism” as the impacts of rising unemployment and home  
repossessions and of plunges in savings and pension funds hit  
millions of families.

Ms Burrow said: “Why shouldn’t working people be angry? Their money  
is being used to stabilise the financial system, but it is their  
wealth, their jobs and the welfare of their children that is being  
stripped away.”

The ITUC said that it was calling on business and political leaders  
in Davos to agree on a comprehensive recovery-and-reform package to  
protect jobs and kick-start a recovery, including a coordinated  
fiscal stimulus, a strengthening of unemployment and social security  
schemes and emergency IMF loans for developing countries without  
austerity conditions.

The worsening atmosphere of blame and retribution in Davos came after  
the publication this week by the Geneva-based International Labour  
Organisation of figures which showed that global unemployment would  
rise to 230 million this year, or 7.1 per cent of the world’s workforce.

Stephen Roach, the chairman of Morgan Stanley Asia, said that US  
consumers were only at the start of a rebalancing phase that would  
last several years and cut spending and boost saving levels. He said  
that global growth would be anaemic at about 2.5 per cent for the  
next three years.

However, Mr Ryder issued a blunt assessment of this year’s World  
Economic Forum. “The certainties that have defined Davos for the past  
ten years have collapsed,” he said. “We are witnessing the collapse  
of an entire system of ideas.”

The remarks reflected a growing theme at the WEF of who to blame for  
the crisis – an issue that Bill Clinton sought to address at an  
earlier session. The former US President said: “There’s a lot of fear  
out there in the economy . . . But I also believe that this is not  
the time to pick new fights, either. We have to get out of this  
together.”

It came as Jean-Claude Trichet pointed the finger at financial  
markets calling on them to refrain from putting pressure on banks to  
hold on to more capital as that was aggravating the economic downturn.

The European Central Bank President said: “It is not our position,  
and we will do all that we can to pass the message that we are not in  
agreement with that. That would augment the pro-cyclicality of the  
present period.”

Since the collapse of Lehman Brothers last September, investors have  
been increasingly wary of those banks with relatively low capital  
ratios, thus encouraging banks to hoard funds at the expense of  
lending to business and investing. “What the markets are suggesting  
is notappropriate,” he said and called on banks to resume normal  
business practices and regain some of their lost confidence.

Private companies “have to get back to a normal horizon of  
investment,” he said. 
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