THE BARRICADE

While we reported last week the French enjoy enacting in real life the plot of the classic 1980 movie Nine to Five, little did we realize that the Chinese and Indians are not only fans of the movie, but also they enjoy holding their managers hostage.

FRANCE: TAKING MANAGEMENT HOSTAGE

Several hundred employees at a Caterpillar Inc. office in Grenoble, France held four managers (including the head of operations) captive for several hours March 31 before police forced the workers to release them. This is the third example of workers holding management hostage in France in the past three weeks. On March 25, employees of a 3M plant held their country operations director for over 24 hours in protest of severance packages for laid-off staff. And workers used tree trunks to barricade a facility where Sony France CEO Serge Foucher was held captive in a meeting room for 18 hours March 12 and 13.

French workers have a reputation for going to great lengths to protest layoffs and plant closures, and the tactic of taking managers hostage has been used before. At least three other similar hostage situations occurred in France in 2008. Recent hostage incidents have lasted as long as 24 hours. In 2008, however, two executives of a machine parts manufacturer were held for five days at a French factory. Police tend to avoid getting too involved in such incidents, usually opting to monitor the situation rather than break them up.

In each case, the layoffs and plant closures were at the heart of the dispute, and the executive or manager (often visiting from headquarters) was held to publicize the event and pressure the parent company to enter talks with workers. Negotiations did in fact resumed between labor and management following each hostage incident.

Similar incidents have occurred in China and India over the past months. In March of 2009, executives of a Western firm operating in China were detained for several days during a meeting over layoffs at the company. In an extreme case, Indian workers at an auto parts factory outside New Delhi owned by Italian automotive firm Graziano beat an Indian company executive to death Sept. 30 after being laid off two months earlier. While physical harm to executives is rare (none has occurred in France), the hostages of often very angry and desperate workers are at risk.

In November, STRATFOR pointed out that a contracting global economy that has seen layoffs, plant closures and security budget cuts worldwide has laid the conditions for increased workplace violence. With the recession still going and more layoffs expected, incidents such as the one today can be expected to continue. Additionally, if police allow such actions to take place unmolested and the tactic prompts management to negotiate with workers, this will only create an incentive for other aggrieved workers to carry out similar hostage takings.

As layoffs increase, more and more people are expressing a rage that is fundamentally Marxist.  For an example of that see this video:

THE REVENGE OF KARL MARX

Hitchens writes:    [quoting John Cassidy] His books will be worth reading as long as capitalism endures.” That would appear to mean that Marxism and capitalism are symbiotic, and that neither can expect to outlive the other, which is not quite what the prophet intended when he sat all those arduous days in that library in Bloomsbury, and swore hotly to Engels, “I hope the bourgeoisie will remember my carbuncles until their dying day.”

Your thoughts, dear reader?

Here’s a look at what the Neo-Marxists are blogging about:

From:  “Social Philosophy  http://davelah.wordpress.com/2009/03/31/marx-and-modern-surplus-value/

“It would seem that the Marx’s exposition of the  fundamental inversion, within capitalism, of the relationship between commodities and money is still as very relevent now, and,  I would argue,  has evolved in ways that would make him turn in his grave.  In Kapital, Marx ponders the mysterious ability of money to increase itself, the M-C-M’ relation. For the moment I’m going to ignore the nature of surplus value as it relates to actual labour, and concentrate on the financial side of things.

The most obvious example in an ecomomic context is that of the power of money to acrue interest- this is as pertinent now as it was then.  However, in financial terms this is a very simple instrument, for example, I place my money in the bank, the bank pays me a certain amount of interest, while lending the money to others at a higher rate of interest, and collects on the difference. But what about more complex instruments, like derivatives; futures, options and swaps.  Now, when you buy shares, you are essential buying into the capital base of a company, when you buy gold or wheat, you’re buying commodities- relatively tangible things.  However, when you buy an option for example, you’re only buying an abstraction- the right to buy something at a particular date.  the situation becomes even more complicated with credit derivatives- here you’re speculating on the underlying credit risk on a loan, or a bond or even a mortgage (although strictly speaking, this would be usually be a property derivative)- abstractions upon abstractions.

It becomes very difficult in these instances to see from where he ‘real’ value is generated. Furthermore, these kinds of instruments are often used to manage risk within a financial portfolio- acting as leverage for/against other assets.  Talk about mystification!  It wouldn’t be controversial to say that playing with ‘risk’ (and these instuments) went a good way to causing the current financial crisis.  Now risk is a part of life, even for a Marxist, but I think one could reasonably argue that it was a lack of awareness as to what the actual risks were that has caused so much grief- again the mystery of money’s abilitiy to increase itself.

As we have held forth many times before on this site, U.S. living standards must decline, whether through deflationary depression or inflationary currency annihilation.  Here is another sore that has appeared on the sick, fetid, corpus of the American consumer-driven economy–swift may be its demise.

From Mish:

Banks Walk Away On Foreclosures

From the Atlantic, this is a very salient article with great perspective and honesty:

The Quiet Coup: http://www.theatlantic.com/doc/200905/imf-advice

“The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.”

The Russians, as only could be expected, will do what they can to gain sectarian advantage as the world gets nervous about the Dollar, and effectively are saying, “first one to get back on the gold standard wins!” But can you blame them? How’s your ABM system, Comrade?

RUSSIA BACKS RETURN TO GOLD STANDARD

Are these guys just idiots, theives, or what’s the deal?

Will the pension liabilities be the straw that broke the back of the Dollar?

See the post by Pigpen here on March 28th, and read this new bit from Boston.com and Michael Kranish: http://www.boston.com/news/nation/washington/articles/2009/03/30/pension_insurer_shifted_to_stocks/?page=1

PENSION INSURER SHIFTED TO STOCKS:

“Just months before the start of last year’s stock market collapse, the federal agency that insures the retirement funds of 44 million Americans departed from its conservative investment strategy and decided to put much of its $64 billion insurance fund into stocks….”

“The truth is, this could be huge,” said Zvi Bodie, a Boston University finance professor who in 2002 advised the agency to rely almost entirely on bonds. “This has the potential to be another several hundred billion dollars. If the auto companies go under, they have huge unfunded liabilities” in pension plans that would be passed on to the agency…”

“Most of the nation’s private pension plans suffered major losses in 2008 and, all together, are underfunded by as much as $500 billion, according to Bodie and other analysts. A wave of bankruptcies could mean that the agency would be left to cover more pensions than it could afford…”

“The whole model of having three sitting Cabinet secretaries with day jobs overseeing a $60 billion investment portfolio and occasionally owning significant percentages of large American companies is fundamentally flawed,” said Belt, the former agency director.”

FULL ARTICLE HERE