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New Ground 40

May - June, 1995


  • Season of the Wolf: an End to Welfare in Illinois by Jim Williams
  • Turning the Tide by Bob Roman
  • Economic Democracy and the New World Order: A View from Nicaragua by Soren Ambrose
  • UofC DSA Youth Section

  • Season of the Wolf: an End to Welfare in Illinois

    by Jim Williams

    Governor Edgar and his new Republican majorities in the State Legislature have banded together in a paroxysm of new legislation to dismantle the welfare system in Illinois. Legislation signed by Edgar on March 6, will abolish the Aid to Families of Dependent Children (AFDC) by 1999. The abolition of AFDC, a federally-mandated program originally passed as part of the Social Security Act in 1935, will require approval by the Clinton Administration.

    Other provisions, which take effect immediately, deny single mothers additional cash payments for children born while the mother is on welfare, deny benefits to mothers under age 18 unless they live with their parents and obtain a high-school education. In addition, parents of children over 13 must get a job within 24 months or lose all their benefits, while requiring that mothers must identify the fathers of their children or their benefits will be cut.

    These draconian measures from Springfield only mirror the national debates which is now taking place in Congress. Each week brings new proposals for even more cuts and restrictions. Democrats and Republicans compete in a scramble to out-cut each other. The Democratic leadership, for example, has criticized Republican cuts as "not requiring enough work" from welfare recipients.

    Why such a furor? AFDC is only a tiny part of the Federal Budget, amounting to only 2 percent. The average welfare check for a family of three comes to only $366 a month, hardly enough to encourage riotous living. Compared to other programs such as, dare we say it, the military budget, AFDC is hardly a drop in the bucket. But cutting the safety net from under the poor is a crusade for the new Republican Right with their cries for social revanche. Taking away the safety net for the nonworking poor is frequently coupled with demands to do away with the minimum wage. Indeed, doing away with the minimum wage cannot be accomplished as long as poor people have a safety net to hang on to. Marxist critics such as Cloward and Piven have long argued that this is the case.

    The real targets of the anti-welfare crusade are just as likely the working poor, those deserving poor laboring away in low-paid, scab-ridden shops and factories whose labor is directly in competition with impoverished workers overseas. If only they could be made to work for even less! How better to re- establish "competitiveness!"

    A Professor at the Social of Social Service Administration at the University of Chicago says the welfare debate deflects from the real problem: ending poverty. "Ending poverty means getting serious about assuring a good supply of jobs, education, day care and heath care," says Dr. Evelyn Z. Brodkin. "Evading those tough tasks while reducing welfare will only make poverty worse."

    Decades ago, Gene Debs said you could judge a society by how it treats its children, its elderly and its prisoners. How well would we fare by this Debsian yardstick today?

    Turning the Tide

    by Bob Roman

    Regardless of your opinion of Newt Gingrich as a professor, it's clear that he that he is a master of politics. The disciplined performance of the Republican House of Representatives was so swift and so spectacular that it hardly matters, politically, how much of it passes the Senate or makes it past the President. The consequences of 1995's first quarter will be with us for decades.

    The Left hardly knew what hit it. While vigorous protest against the "Contract with America" began early in the year, it was generally disconnected and disorganized. Worse, it was generally overwhelmed and outshone by the conservative fireworks in the Congress and state legislatures. Chicago was no different from any other part of the country, except we had a memory of 1981 when Reagan's splash and dash was effectively countered by the Illinois Coalition Against Reagan Economics (ICARE).

    As Marx observed, we make our own history, but not just as we please. In this Hegelian go-round, several factors are quite different. First, there was the speed and the size of the conservative tsunami. This left any number of organizations either doing business as usual or scrambling alone to salvage something out of the ruin. Second, a number of important players were no longer on the stage. One of the key individuals was Milt Cohen, the former Co-Chair of Chicago DSA who died over a year ago. Milt's presence in 1981 meant the involvement of the Illinois Public Action Council (IPAC) which at that time could provide ICARE with both the connections and the credible resource base needed for an effective opposition.

    The situation is gradually changing. A coalition of coalitions of sorts is developing around a proposed March for Jobs and Justice on Saturday, June 17. This could be a really big event, bringing tens of thousands of people out to show their opposition to the current conservative offensive. Another major effort is being organized around protecting Social Security and Medicare / Medicaid from cuts. This campaign is being conducted by the Illinois Save Our Security Coalition which intends to confront legislators rather directly on the issue. Your participation in these campaigns is vital. The coming year will determine if we will turn the tide or be found dusting off our passports.

    Economic Democracy and the New World Order

    A View from Nicaragua

    by Soren Ambrose

    After years of struggle, excitement and upheaval, Nicaraguans now face a world in which opportunity seems to have passed them by. Life after the revolution and civil war is even more economically desperate and politically confusing than they could have imagined. At the Broadway United Methodist Church on March 25, the former national police chief of the FSLN (Sandinista) regime and current member of the National Assembly, Doris Tijerino, explained today's harsh realities in a talk entitled "Economic Denmocracy Versus the New World Order".

    Nicaragua's 15 years of struggle has spanned both the Cold War and the New World Order, and it has prompted both military and the economic therapy from the North. In the 1990s, the agents of doom for countries like Nicaragua are not U.S. sponsored "freedom fighters" but the international bureaucrats who make their home at the World Bank and the International Monetary Fund (IMF). These faceless technocrats do a far more effective job of keeping countries like Nicaragua in their place and if a new direction doesn't emerge very soon, most traces of the revolution's gains will be erased. Nicaragua will look very much as it did before any shot were fired.

    With te end of the Cold War and the advent of a more truly global economy, as codified in the new GATT/WTO arrangement for example, revolutions of the left seem much less likely. With whom would the revolution trade? Even Castro is now reduced to hawking tourism packages. The name of the victorious U.S. backed coalition in Nicaragua's 1990 election, UNO, evokes the bitter reality of this new world: one trade regime, one superpower, one economic philosophy.

    As the title of Tijerino's talk implies, this single track world doesn't have much room for meaningful democracy. UNO itself has certainly proved no match for the World Bank and the IMF. It may have come to power in a nominally democratic process, but the austere economic policies it immediately adopted-- reduced government spending on health and education, massive layoffs, harsh credit restrictions, privatization of state enterprises, tariff reductions, tax increases, and drastic changes in the country's labor laws-- were dreamed up in Washington, the home of both Nicaragua's old nemesis, the U.S. government and its new ones, the international financial institutions. These policies, similar to ones imposed on at least 90 other poor countries by the IMF and the World Bank, are known collectively as a "structural adjustment program" (SAP). "SAP" has become one of the most recognized terms around the world, that is around the "Third World", as the international bureaucrats, the only remaining sources of capital when commercial banks won't lend anymore, move into devastated economies and demand that they open up to foreign "investment" (remember Mexico?).

    Nicaragua is a predominantly rural society; the people depend on the land. The Sandinista revolution succeeded in raising most of the peasants out of the status of abject sharecroppers by confiscating the extensive land holdings of ex-dictator Anastasio Somoza and his cohorts, and redistributing the land to the people. For Tijerino, this was the Sandinistas' greatest accomplishment. It was all the greater for having been done while fight a war against U.S. backed counter-revolutionaries. But she pointed to one flaw in the redistribution: the land deeds. Not only did it take four years to process all of them, but the deeds included a provision that the land could not be sold. In the days of the Sandinista regime this was resented because peasants felt they didn't really own something if they couldn't sell it.

    The worst consequence of this deeding provision was harder to foresee. Under the SAP, interest rates were raised and credit was severely restricted. Farmers everywhere rely on credit to get fertilizer, seeds, and equipment before they can harvest and repay loans and realize their income. The "no sell" provision prevents peasants from offering as collateral their most valuable asset, their land. In a tight money economy, this has meant the virtual end of any credit for Nicaraguan small holders and has forced most into a subsistence farming mode.

    If structural adjustment doesn't work, why do these expert economists keep recommending it? Well, it doesn't work for Nicaragua or for other indebted countries. But it works just fine for some: foreign capital and the small group of elites in each country entrusted with implementing the policies and staffing the transnational corporate subsidiaries' offices.

    Mexico provides the most accessible example: the current President, Zedillo, and the previous one, Salinas, were both educated in classical economics at Harvard. Salinas comes from a very wealthy oil family, old friends to the Bushes. Salinas emerged from his term as President as, reportedly, one of the riches people in the world, and he managed to increase the number of Mexican billionaires from 2 to 24 during his time in office. Privatization is the key to this enrichment; state enterprises are sold at bargain prices to friends of government officials. Foreign "investors" are enriched by the high interest rates demanded by SAPs and by the cheap labor available in countries with chronically impoverished and under employed workers (remember NAFTA?). Multiply this example around the globe. The "Third World" offers hundreds of vastly different cultures, but one model is all you need to know to be an economic multiculturalist.

    Nicaragua's statistics tell the story of structural adjustment quite eloquently. Tijerino announced that the unemployment rate has now gone over 60%; unemployment rates in the first half of 1994 were 59% higher than during the same period in 1993. Fully 75% of the population now lives in poverty. GDP per capita in 1993 fell to 71% of the 1985-1989 average. Credit to the agricultural sector has been slashed by 62%. Industrial production since 1990 has declined 14%. Nicaragua has received over $3 billion in aid since Chamorro took office in 1990; over one third of it has been used to pay foreign debt service, and most of the rest has financed the rapidly climbing trade deficit. At last report, Nicaragua could claim the highest per capita debt burden in the world. In 1994 the debt totaled nearly $11 billion.

    With statistics like these and with continuing "aid" and advice from the World Bank and the IMF, the problem with the deeds will probably be cleared up soon. Then the banks can take possession of the land to redistribute it back to the old elite. Tijerino reports that here in the U.S., Senator Jesse Helms is trying to apply an old rule that no aid dollars can go to any nation that has confiscated assets of American citizens. Somoza's family and friends are now Americans; Helms just has to get the law applied to the time when they were not. The Somoza family has even filed a lawsuit over its land claims. We may soon have our old Nicaragua back.

    What should be done? CRIES, a consortium of research centers based in Managua, has called for a reversal of policies. Nicaragua should, it says, try to reduce and re-negotiate its foreign debt, implement selective tariff protection, channel domestic savings to productive sectors, institute a program to stimulate production by small and medium sized producers, and expand public health and education services.

    What can be done? Tijerino was asked if the elections coming up in 1996 offered some hope. She replied that the situation has become very complex. Like the many conservative commentators who look back to the cold War almost with fondness, Tijerino said that back in 1979 it was pretty easy. There was Samosa and there were the Sandinistas. Now there are 28 different political parties in a country of about 4 million people. To win outright, one party must receive 45% of the votes. If none does, a second round of voting takes place in which the parties form coalitions. When that happens, as it almost surely will, it becomes hard to predict who will side with whom, and any party platform one may find appealing is likely to be quite diminished. As it stands now, the one party with the most support is on the extreme right. Frightening as that is, Tijerino doesn't seem to think they have a good chance to claim the presidency.

    But with the global economy the way it is, the results may not be all that significant, Tijerino pointed out. If any government that comes to power is restricted to policies of "structural adjustment", all the brave ideology even the FSLN could muster will make little difference. The "Third World" is, unfortunately, replete with governments which disown their campaign promises as soon as they assess their economic situation (usually with the help from someone from Washington). Chamorro's government may have had little interest in resisting the recommended SAPs, but even Daniel Ortega would have difficulty standing up to the bankers alone.

    What is urgently needed is for people around the world to learn about the effects of SAPs and the erosion of any meaningful democracy that occurs when the IMF and the World Bank are called in. Although these institutions have some staffers who do mean to alleviate poverty and foster responsible development, they are either completely overwhelmed by the preponderance of technocrats who see only numbers and dollar signs or they find themselves constructing policies that fit within the fundamentally flawed framework of neo-liberal, neo-classical economics.

    Voting rights in these institutions are allocated by the size of each country's contribution. This makes the U.S. the most influential voice in both bodies, followed by Japan, Germany, France and Britain. Both institutions are based in Washington and the World Bank president has always been an American. These factors give U.S. citizens a degree of leverage no others have. It's not much since the Bank and the Fund are officially accountable to no one. But it is where we must start if the economic paradigm that is ordering this increasingly unjust world (including our own country) is to be challenged.

    Doris Tijerino's talk was sponsored by the Chicago 50 Years Is Enough Coalition and three other groups: the Nicaragua Solidarity Committee, Women for Economic Justice and Casa Nicaragua. Fred Morris, the pastor of the Broadway United Methodist Church, served ably as Tijerino's translator.

    UofC DSA Youth Section

    UofC Youth Section Chair Daraka Larimore was elected the Youth Section's representative to DSA's National Political Committee at the Youth Section Winter Conference last March. The Winter Conference also decided to hold the Summer Conference at the University of Chicago in August. The University of Chicago Youth Section chapter has also taken the lead on campus by organizing a UofC Coalition Against the Contract. The Coalition's first event was a rally on Thursday, April 13th, which drew over 175 participants.

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