‘IMF’ Comes to California … and to a Neighborhood Near You

By Kent Paterson

For decades California set trends that swept the United States and much of the world. The 1934 San Francisco General Strike, Hollywood, suburban sprawl, the hippie subculture, the Black Panthers, Silicon Valley, and more all profoundly influenced the course of history here and abroad. And if present trends prevail, California could well define the new economic, social and environmental regime for the United States.

A $26 billion-dollar state budget deficit prompted Republican Gov. Schwarzenegger and Democratic lawmakers this year to make deep cuts in education, health and other social services. The long-simmering prison crisis erupted in violence as inmates brawled and trashed Chino prison. In Oakland, tenants of a foreclosed apartment building lived for months without utility services before they were eventually evicted, while thousands of uninsured packed a free healthcare fair near Los Angeles. The official unemployment rate stands at close to 12% of the workforce.

A state auction of public property in Sacramento this summer perhaps symbolized the immediate fate of a behemoth once considered a futuristic powerhouse.

The stark reality Californians face is not all that different from what millions of people endured in the Third World under classic International Monetary Fund (IMF)-dictated austerity schemes.

For some, small retail revivals coupled with cash-for-clunkers shopping sprees have heralded the light at the end of the tunnel from the deepest days of the recession. Yet even as car dealers managed to clear out over-inventoried lots, Toyota announced Aug. 27 that it was closing its important New United Motor Mfg, Inc. (NUMMI) Bay Area plant, which it had formerly operated in a joint venture with General Motors. About 4,000 workers will lose their jobs and income, as will tens of thousands of others who help supply parts and services to the plant and its workforce.

United Autoworkers President Ron Gettelfinger said: “Over the past 25 years UAW members at NUMMI have dedicated themselves to building the highest quality vehicles. They deserve better than to be abandoned by this company, which has profited so richly from their labor, their productivity and their commitment to quality.” While recognizing that Toyota was in a tough market, Gettelfinger added, “it’s unfortunate the company chose to close a US facility after benefiting so greatly from the federal ‘cash-for-clunkers’ program, which is funded by US taxpayers.”

A NUMMI shutdown will further reduce consumer spending, lead to more lost tax revenues and put even more pressure to keep a lid on state spending.

Against odds, the UAW is campaigning to keep NUMMI open.

Scattered resistance to the new economic regime is taking shape, with higher education an important battleground. The fading Golden State will grapple this year with two-billion dollar cuts to higher education, spending $8.7 billion on colleges and universities, or 17% less, than two years ago.

As the fall semester kicked in, workers and students at the University of California’s Berkeley campus rallied against budget cuts and tuition increases and blasted bonuses and pay raises this year for some administrators.

From Aug. 26-Sept. 2, UC system employees, students and community members participated in a no confidence vote against President Mark Yudof. On the UC-Berkeley campus, 1300 people voted no confidence in the administration, according to university custodian and AFSCME Local 3299 President Maricruz Manzanares.

The union leader said conditions for both employees and students at the onetime “pearl of higher education” were deteriorating, with curtailed library hours, study lounges converted into dorm rooms and labor speed-ups all part of the new school year. “We’re not machines, and it seems Mr. Yudof has forgotten this,” Manzanares said.

Separate from UC campuses, the California State University (CSU) colleges draw many working-class students. For the first time, as many as 35,000 transfer students from two-year community colleges could be refused mid-year admission because of lack of resources, according to Alice Sunshine, spokeswoman for the California Faculty Association.

California students are getting a taste of the life-changing sting of the admissions rejection that their Mexican counterparts just south of the border have long experienced. CSU Faculty are seeing their salaries cut by 9.5% while being forced to take furloughs of two work days per month.

In both the UC and CSU systems, labor unions and activists are planning protest actions this fall, including walkouts, teach-ins, pickets, and tabling with cell-phones to call lawmakers. Both Manzanares and Sunshine concurred on the need to save an educational system that once provided access to a better life to all those who qualified. “Part of the reason for California’s crisis is that it’s been letting its educational system slide,” Sunshine said, “and I think that is a warning for the rest of the nation.”

Recognizing the need for a broader coalition to fight budget cuts, Sunshine said her union would not allow itself to be “set against the sick and the poor.”

Depending on how they play out, new grassroots movements are likely the only force capable of seriously challenging the socio-economic status quo.

Although much of the blame for the current morass lies squarely with the refusal of the minority Republicans who hold effective veto power over state budgetary decisions to consider tax increases on the rich, significant changes in economic policy are unlikely to come from the state’s Democratic leadership, which is gearing up for the 2010 gubernatorial election.

Meanwhile, the environmental crisis deepens daily. Even as water shortages shrivel San Joaquin Valley farms, the nation’s fruit and vegetable basket, darting planes unload more pesticides on the Salinas Valley and other ag lands.

In an age of climate change, California’s always problematic wildfires could grow more frequent, more intense and more costly. As the summer drew to a close, a billowing mushroom-like cloud rose above Los Angeles and crowded the skyline of the Southland like an apocalyptic painting draped over the neighborhood. The so-called Station fire claimed two firefighter lives and gutted state and federal budgets for another $40-plus million at a time when the Golden State, and indeed the nation, can ill afford such disasters.

Kent Paterson is a freelance journalist who divides his time between Mexico and the US Southwest.

From The Progressive Populist, October 15, 2009