Neoliberalism By Other Means:
The “War on Terror” At Home and Abroad

By Gordon Lafer, University of Oregon, USA*

Abstract: This paper offers a theoretical framework for understanding both the invasion of Iraq and the “war on terror” in the context of neoliberal globalization. I argue that both the foreign and domestic policy pursued by the Bush administration under the rubric of the war on terror are in fact best understood as strategies for advancing the neoliberal agenda, in large part by seeking to undo gains made by the labor movement during the 1990s. I argue that for this ambitious and aggressive administration, the post-9/11 atmosphere offers the prospect of permanently restructuring both popular expectations of government and the ability of working people to challenge corporate prerogatives.Author biography: Gordon Lafer is an Associate Professor at the University of Oregon and is author of The Job Training Charade (Cornell University Press, 2002). He has served as an economic analyst for the Mayor's Office in New York City and has provided strategic research for a wide range of labor unions. He writes on issues of labor and economic policy and the geography of post-industrialism.

The fact that no two countries have gone to war since they both got McDonald's is partly due to economic integration, but it is also due to the presence of American power and America's willingness to use that power against those who would threaten the system of globalization -- from Iraq to North Korea. The hidden hand of the market will never work without a hidden fist…. And the hidden fist that keeps the world safe for Silicon Valley's technologies to flourish is called the U.S. Army, Air Force, Navy and Marine Corps.

-- Thomas Friedman, The Lexus and The Olive Tree. (1)

If the war in Iraq was not about weapons of mass destruction, what was it about?

One year after American victory in Iraq, the most pressing question remains: what was the war about? Indeed, this question has only grown more pointed as evidence mounts that even the Bush administration could not have been primarily driven by concerns over weapons of mass destruction. (2)

If the war was not about weapons of mass destruction, what was it about? While the corporate designs on Iraqi oil are troubling, and the war-profiteering of politically-connected contractors is obscene, neither of these appears sufficient to explain the administration's broad agenda.

I believe that, in its broadest logic, the war must be understood as a means of advancing the neoliberal agenda of global economic transformation. Both abroad and at home, the pattern of administration behavior reflects an ambitious and aggressive drive to restructure the economy in line with neoliberal dictates. The choice of Iraq as the target of invasion and occupation was no doubt driven both by Iraq's vast oil reserves and its potential to substitute for Saudi Arabia as the market maker in the global oil exchange. Apart from the Saudis, Iraq is the only country whose reserves are large enough that it could regulate world prices by choosing to expand or contract production at strategic points in the price cycle. This strategic value of Iraqi oil – above and beyond its straight economic value – explains why, within one month of capturing Baghdad, U.S. overseers raised the prospect of pulling Iraq out of the OPEC consortium. (3) Control of Iraqi oil offers the potential to exercise critical leverage over the economies of the Middle East, Russia, and other oil-dependent nations.

But the allure of Iraq is about more than oil. Unique among regional economies, the oil producing nations of the Middle East constitute the one region of the world whose economies are both significantly wealthy and largely state-run. As most of Europe, the Americas, Asia and increasingly Africa have been drawn into the neoliberal regime of the IMF and WTO, the oil wealth of the Mideast has allowed these nations to evade the discipline of austerity budgets and structural adjustment plans. Thus, public employment, state-run industries, subsidized public services, and restrictions on foreign capital – all of which have elsewhere been increasingly dismantled over the past twenty years – remain flourishing hallmarks of Mideast economies. It is this form of economic governance that the administration aims to undo in Iraq. This is neoliberalism by other means: what could not be achieved by trade or treaty will be imposed by military force.

In the leadup to the war, administration hawks proclaimed their goal of using Iraq to spark a “tsunami of democracy” across the region. Assuming this is heartfelt ideology and not merely rhetorical posturing, what is the form of “democracy” that these policy makers have in mind? Clearly, they are not primarily driven by a passion to export even the “thin” democracy that Americans enjoy at home. Looking at Afghanistan – a country where, for more than two years, the U.S. has enjoyed a largely free hand to remake the political system from the ground up – there has been no serious attempt at installing popular democracy. The loya jirga – described by one observer as “one warlord, one vote” – may or may not produce stability. But it bears no relationship to democracy. Two years on, there is not a single popularly elected official in Afghanistan. And with women around the country either culturally cowed or physically intimidated out of political participation, it is unlikely that a government “of the people” would result even if open elections were called. (4) My point here is not simply to criticize the lack of democratic process in Afghanistan – the country is hardly unique in this respect – but to note that this absence does not appear to particularly trouble the Bush administration. But if the champions of “democracy” are not concerned by the absence of popular elections, what is the vision they are pursuing?

The answer to this question can be found in the post-war administration of Iraq. In Afghanistan, an impoverished country with little natural wealth, the administration's goal is merely to insure stability, prevent the return of al-Qaeda forces, and secure long-term military bases that may prove useful in projecting force into more strategic neighboring countries. In Iraq, the goal is much more ambitious: a fundamental transformation of the social and political system. Yet here too, the administration's actions betray no urgency regarding the establishment of what any political scientist would consider the fundamental ingredients of democracy. Not only are there no elected officials in Iraq; the CPA has taken no steps to institute even the most basic rights of democratic citizens. There are, of course, no due process rights for the administration's enemies. By refusing to declare victory even a year after Saddam's statue was toppled, the Bush administration continues to govern Iraq in a state of permanent martial law. Prisoners of war are not released; but neither are they charged with crimes and brought to trial. There is, in fact, no clear distinction between criminals and combatants. Furthermore, even in those realms of life that have no connection to threats of crime, war or terrorism, the CPA has avoided instituting any of the building blocks of democratic civil society. There is, for instance, no guaranteed right to free speech under the CPA; no freedom of the press; and no freedom of assembly. (5)

As in Afghanistan, while the administration is clearly concerned with establishing a stable and friendly regime – and with somehow declaring Iraq's sovereignty restored before the fall elections at home – it has demonstrated no particular qualms about the absence of democratic institutions. It has taken no steps to establish reliable voter rolls, and has above all fought against the notion that a Constitutional assembly should be chosen through popular elections – despite the fact that British officials thought elections were feasible, and the UN declared elections could take place by the end of 2004. (6) A whole raft of fundamental questions – including, for instance, the relationship between mosque and state, the role of ethnicity in national government, and the rights of women in the new Iraq – have been deferred until after a new government is established. These issues are simply too sensitive to be predetermined without broader input, Bremer tells us. It is telling that labor rights fall in this latter category. In the public sector, the CPA has instituted wide-ranging revisions in civil service protections – undermining security, instituting merit pay, and establishing new employment and wage standards. The one part of the old system Bremer kept intact is that if workers have a complaint over any aspect of their treatment, they must use Saddam's old grievance procedure. (7) Similarly, Bremer has kept in place Saddam's 1987 labor law which effectively prevents either public or private sector workers from engaging in collective bargaining. When it comes to labor rights, the CPA insists that it is obligated not to change anything in previous Iraqi law except what is needed to maintain security and civil order. “The form of industrial and labor relations,” the regime insists, “will be a matter for the … future Iraqi government to decide.” (8)

By contrast, the CPA has undertaken a radical restructuring of the country's economy without any waiting period nor any popular input. Public employees have lost their jobs and have seen their civil service rights undermined; state industries have been put on the auction block to be privatized; public subsidies have been cut; taxes cut or eliminated completely; and markets opened to foreign capital. (9) While the oil industry remains publicly owned, its days are numbered. Shortly after former Shell Oil CEO Philip Carroll was appointed to run Iraq's oil industry, he declared that while it remained impossible to predict how or when the industry would return to full production, “the one near certainty” is that foreign capital will be invited in to the industry. (10) Partly to prevent workers from effectively opposing privatization, the CPA has kept in place Saddam's 1987 law banning Iraqis from forming independent labor unions, and where workers have organized of their own accord, the Coalition has explicitly prohibited management from negotiating with employees. (11) These are hard changes to reverse, and clearly the administration's intent is that they should never be reversed and, indeed, should never be subject to public debated.

It is here – on the subject of privatization and liberalization – that we find the passionate rhetoric that is so noticeably absent on the topic of democracy. Both the president and CPA administrator Paul Bremer have declared economic “liberty” to be a universal good in no need of debate. “For a free Iraq to thrive,” Bremer explains, “its economy must be transformed…. [T]his will require the promotion of foreign trade, and the mobilization of domestic and foreign capital…. The central lesson from past transitions is …. [the need to] switch from value-destroying public enterprises to value-creating private ones …. [H]igher living standards — and political freedom — cannot emerge if economic freedom is denied. And so rebuilding the Iraqi economy based on free market principles is central to our efforts.” (12) Economic liberalization here has been trumpeted as something much grander than merely a pragmatic strategy for increased prosperity; it is among the values that the president has declared timeless, true for all people in all nations. In the president's words, “there are … essential principles common to every successful society, in every culture,” including the fact that “successful societies privatize their economies.” (13) “By extending the reach of trade,” the president argues, “we foster … the habits of liberty.”(14) And this “liberty,” he insists, “is the design of nature … . [It] is not for us alone; it is the right and capacity of all mankind.” (15) Thus, the very policies that have been the subject of heated controversy and massive protests across much of Europe, Asia and Latin America, have been instituted in Iraq as a priori axioms, outside the realm of public debate or democratic control.

The administration's drive to control the Constitution-writing process in Iraq is clearly aimed at preventing the rise of a Shi'ite theocracy or other forms of unfriendly rule. (16) But it is likely also driven by a desire to cement as much as possible of this neoliberal reform into the country's constitution. The line that separates those issues that are deferred for later and those that are treated as immediate, axiomatic priorities also marks the distinction between what will be subject to democratic debate and what will be set outside the realm of popular control. Ultimately, the logic of the Bush agenda is to make the question of democracy largely irrelevant, by setting all of the most fundamental issues – the commitment to free-market capitalism and the long-term presence of US military bases – outside the bounds of debate. Thus, even if Iraqis do achieve something we might recognize as democracy, it is to be a sort of toy democracy, in some ways more like Model UN than genuine self-rule. Once the terms of economic rule are set, Bremer implies, Iraqis will be free to play among themselves and come up with any role they want for religion, ethnicity or gender. But popular democracy will be strictly confined, reserved for the realm of less-pressing issues.

This, finally, is the “tsunami” that neocons hope will sweep the Mideast – not, God forbid, a democracy that allows citizens to vote on nationalizing oil, but one that produces stable and friendly regimes by encouraging the population to participate in a “democracy” that is strictly bounded by the demands of neoliberalism. (17) Thus, when the Bush administration launched its “Greater Middle East Initiative” in early 2004, it put economic reform and WTO membership at the top of its agenda for transforming the region. (18) In this way, the case of Iraq represents a new phase in the process of “transition to democracy.” Both the passing of military dictatorships in Latin America and the end of Soviet rule in Eastern Europe have provided political scientists with rich material for theorizing how countries come to establish democratic practice. If the Bush regime is successful, Iraq may well represent a third model of transition. But this time the transition is not the product of domestic upheaval, but is forcibly imposed from without. And the “democracy” it creates is thinner, and governs a smaller sphere of national life, than any theorist might previously have imagined.

In this sense, the model of noeliberal democracy in Iraq may well be a foretaste of what awaits the rest of us in a future dominated by a more robust WTO. In negotiations over expanding treaties on trade in goods and services, the Bush administration, along with leaders of many other capitalist countries, have supported language that would effectively remove much of our economic lives from the realm of democratic decision-making. For instance, one of the most controversial aspects of the pending Free Trade of the Americas Agreement is the principle that a nation may not privilege domestic employers over foreign competitors in any way. (19) However, a similar principle has been established for Iraq by the CPA, without any pretense of democratic input. (20) Thus the ugliness of Iraq may offer a window not only onto the Bushites hopes for the rest of the Middle East, but their designs for us at home as well.

If the war in Iraq is really about something other than weapons, what is the domestic “war on terror” about? At first glance, the war at home appears to be more straightforward: a genuine if heavy-handed effort to prevent a repeat of anything like the attacks of September, 2001. But here too, the administration's actions point to motives that are mixed at best. Whistleblowers within the federal intelligence community complain that problems identified two years ago have remained unresolved. The multicolored national security alerts have produced great public drama but, as far as the public has been told, have never had any relationship to major terrorist attacks either committed or deterred. Clear-cut security requirements such as upgrading the quality of airport baggage screeners were delayed for months over the administration's commitment to keep this work non-union. (21) Critical needs such as preparing the public health system to cope with potential bioterrorist attacks, or supporting the anti-terrorism work of state and local police, have gone unfunded as the monies were diverted to tax cuts. (22) At the same time, a wide range of initiatives apparently unrelated to anything to do with terrorism – including the tax cuts, ‘fast track' authority, and deunionization of federal jobs, have all been advanced as critical components of the war on terror. (23) I assume that the government is genuinely interested in preventing terrorism. Nevertheless, these facts suggest that the administration's agenda is much broader, and much more ambitious than simply that of protecting the population from future attacks. And while any one of these items may be viewed as an individual case of cronyism or opportunism, the broader pattern points to the need for a deeper theory of what is driving the regime's domestic agenda.

I believe that the domestic agenda, too, can only be understood in the context of neoliberal globalization. One of the axioms of globalization is that capital accumulation has become disconnected from the nation-state. Before “global city” became the mantra of Chamber of Commerce boosters everywhere, it was geographer Saskia Sassne' term for the locales that are home to the administrative headquarters of far-flung corporate empires. (24) As corporate production, distribution and services have grown into complex, worldwide networks, those at the top need ever greater capacity at central headquarters in order to coordinate these global empires. A handful of cities have come to serve as the central hubs of financial, legal, accounting, marketing and telecommunications functions for global capital. These cities are “global” because their dominant industries participate in an economy that is increasingly disconnected from the fortunes of any particular nation. The functional colleagues of New York lawyers and stockbrokers are London lawyers and brokers. By contrast, both have increasingly little economic connection to normal manufacturing and service workers. The latter are stuck in a parallel economy that, while sharing the same physical and political space, has no means of participating in the growing fortunes of corporate empires. It may never have been true that what was good for GM was good for America, but over the past twenty years the connection between the success of “American” companies and the prosperity of Americans has grown threadbare.

This denationalized economy has produced increased inequality both within the United States and around the world. But it has also rearranged the geography of inequality. When capital accumulation was nationally based, the corporate titans of one country battled those of another for market domination, and developed nationals exploited the undeveloped for raw materials and expanding markets. In this world order, it made sense to think in terms of “rich countries” and “poor countries.” Because we inhabit a world that is still largely a product of this previous system, there is still plenty of truth to these categories. But the logic of neoliberal globalization is clearly pulling in a different direction. The corollary to “global cities” must be something like “global wastelands.” In the future, the distribution of wealth and poverty will not map onto the borders of nation states.

What does all this mean for the United States? Simply put, if we continue to follow the logic of capitalist globalization, the fate of most Americans is to become much poorer, until we balance out at the level of typical of middle- and working-class people in the rest of the world, i.e. in the third world. Because this is a slow process, this conclusion may seem counterintuitive. But all the signs are there. Over the past thirty years, real wages have fallen in 80% of American jobs. (25) During the same period, our hours of work have increased while health and pension coverage and public services of all manner have shrunk. (26) While the years from 1946-1973 saw the country growing slightly more equal, the past thirty years have brought dramatic increases in inequality, culminating in the recent series of “jobless recoveries,” in which the financial markets improve while employment and wages stagnate. (27) We are witnessing what may be the first generation of Americans characterized by downward mobility. (28) And economists cannot point to any industry that promises to reverse this decline.

For the Bush administration and its corporate sponsors, the question of the day is how to continue advancing the neoliberal agenda while managing the politics of decline for the majority. The administration clearly has multiple goals for the “war on terror” at home. But among the central ones is the repression of labor and the prevention of potential political alliances that might challenge the prerogatives of American capital.

In the period immediately preceding the Bush presidency, the American labor movement had enjoyed a period of success unprecedented in at least twenty-five years. After decades of decline under the guidance of a moribund leadership, the ascendance of John Sweeney to presidency of the AFL-CIO brought renewed vigor to organized labor. In the second half of the 1990s, the AFL-CIO arrested the long-term decline in national union density, and was poised to begin increasing the share of American workers represented by unions for the first time since the 1950s. Moreover, union campaigns began to capture the imagination and support of millions of Americans who were not union members but who experienced the same economic distress that drove others to organize. The campus anti-sweatshop movement; living wage movements in hundreds of cities across the country; and the 1997 UPS strike highlighting the problem of part-time jobs all galvanized broad public backing in support of workers and in opposition to big business and economic “rationalization.”

Likewise, the new labor movement succeeded in dramatically increasing the political clout of organized workers. Throughout the course of the 1990s, the AFL-CIO mobilized growing numbers of union workers to participate in electoral politics. By the 2002 elections, while organized workers represented only 13% of the labor force, union households accounted for over 25% of all voters. (29) As in workplace organizing, the labor movement's political program succeeded in reaching beyond its own members to form critical coalitions with allied groups, most importantly including immigrant communities. Under the Sweeney leadership, the AFL-CIO reversed its long-term stance opposing immigrant labor as stealing American jobs, and became the most powerful proponent of blanket amnesty for undocumented workers. Simultaneously, as service-sector unions organized more immigrant workers and launched more campaigns in concert with these workers' churches and community organizations, the union movement started to be seen as a natural and integral part of immigrant workers' drive to make it in America. Emblematic of this emerging alliance is the coalition of labor unions and Latino community organizations that, in a relatively short timespan, flipped Los Angeles from a bedrock Republican to bedrock Democratic constituency. When ultraconservative Representative Bob Dornan lost his Orange County Congressional seat to a Latina woman backed by progressive unions, the changing of the guard was undeniable. The nation's largest state, so recently under Republican control, had become so solidly Democrat that it is no longer considered in contention for Republican presidential candidates. Beyond the impact of California itself, the prospect of a Labor-Latino coalition spreading to other states with large Hispanic communities posed a grave danger for Republican and corporate strategists.

Finally, the “global justice” movement that came together in the Seattle 1999 protests against the WTO marked the potential birth of a massive and powerful new movement challenging corporate prerogatives. It is easy to overestimate the importance of the Seattle protests. The few days of unity did not undo the many differences between the various protest groups. And the months following Seattle were filled with “where do we go from here?” discussions that never achieved a satisfactory answer. It is not clear that the coalition that assembled in Seattle deserves to be called a “movement.” However, even as a first step with an uncertain future, the import of these protests was potentially earth-shaking. Essentially, the anti-WTO protests undid fissures that had fractured progressive organizations for at least four decades. At least since the Vietnam war, the history of whatever might be called the American “left” has been primarily characterized by fragmentation. In place of the Old Left's unity around class, the New Left led to multiple and often conflicting agendas organized around various forms of identity politics. While feminist, civil rights and labor organizations might come together around specific political issues, the alliances were generally short-lived and superficial. Most important from an economic point of view, the labor movement throughout the 1970s and 1980s was largely alienated from the most energetic social-change movements. The incredible accomplishment of Seattle was to forge a coalition that overcame these differences in opposition to a common enemy. For union members, Seattle was possible because twenty years of jobs going overseas and management invoking the threat to relocate as a strategy for slashing wages had made “globalization” a gut-level rank and file issue. Thus the process of neoliberalism finally created its own antithesis in a labor movement that was ready to join with youth, environmentalists and immigrant organizations in fighting the power. From a corporate viewpoint, the divisions that for thirty years had so effectively kept the various parts of the “left” from coming together were threatening to dissolve.

The “war on terror” aims, in large part, at undoing all of these challenges to corporate authority: undoing workers' power in the workplace; pushing back against labor's growing political clout; and breaking apart the labor-community coalitions that threatened to exercise too much democratic control over capital.

The “war on terror” is not something the Bush administration could have instituted on its own were it not for the September 2001 attacks. But the administration's choice to respond as it has is based on an agenda that predated the attacks. It is not a mistake that the terror of McCarthyism followed immediately after the labor movement had achieved its peak of militance in the 1930s and 1940s. Nor is it a mistake that Bush's war at home came in response to a decade of remarkable promise for American workers. The economic agenda being enacted under the rubric of the “war on terror” is far more profound than merely a collection of isolated opportunities for expanding the return to capital at the expense of workers. In the eyes of the Bush administration and its corporate sponsors, the post-9/11 period presents a history opportunity to permanently (they hope) restructure both expectations of the government and workers' leverage in the labor market.

Unsurprisingly, the first target of the president's post-9/11 labor agenda was the public sector. This is partly because public sector workers are easier to attack – the government has direct control over their contracts, and in hard times it is easy to rally private-sector workers against images of greedy civil servants living high off our hard-earned tax dollars. But public sector workers are not only an easy target; they are also a strategic target. Beginning in the 1970s, public employees organized at a pace far above that of the private sector. Because private sector labor law is so weak, allowing employers to intimidate or fire union supporters with more or less impunity, it is much more difficult for workers in the private sector to win recognition for their unions. Over the years, this imbalance became increasingly pronounced. Thus by the year 2003, nearly 40% of public employees had unions, compared with less than 10% in the private sector. (30) For the Bush administration, an attack against public sector unions hit at a key source of strength for the national labor movement. Destroying these unions would significantly shrink the movement as a whole, and deny significant dues money to national efforts at both workplace and political organizing.

Bush's attack on public employees was three-fold. Within the federal government itself, the president declared hundreds of thousands of employees ineligible for union representation due to “national security” concerns. One of the president's first labor initiatives after 9/11 was to deny unionization rights to baggage screeners at the nation's airports. According to representatives of the newly formed Transportation Security Administration, “collective bargaining would be incompatible with the nation's safety” because “fighting terrorism demands a flexible workforce that [is] …. not compatible with the duty to bargain with labor unions.” (31)

Similarly, in creating the new Department of Homeland Security, the president insisted on giving incoming Secretary Ridge the authority to unilaterally waive civil service, anti-discrimination, whistleblower and union protections to these 170,000 workers who had previously enjoyed all these rights while performing the same jobs under their previous departments. (32) The administration has never identified a single instance where union or civil service protections have, or might conceivably, restrict national security effectiveness. On the contrary, police and fire unions around the country routinely include contract clauses that allow work rules to be waived in emergency situations, and federal union leaders publicly stated their commitment to honoring similar standards. (33) Moreover, many of the lessons we have learned about what went wrong in the leadup to 9/11, and what has to be improved in future intelligence operations, was made possible only because intelligence employees had exactly the type of whistleblower protections that the Bush administration declared incompatible with national security. So too, in January 2002, the president issued an executive order unilaterally revoking union representation for workers in five divisions of the Justice Department. The president argued that the move was needed to prevent strikes by workers engaged in the war on terrorism – despite the fact that federal law already prohibited these workers from striking. (34)

While the administration has been unable to produce any convincing rationale for why security personnel should be denied union or civil service rights, it has explicitly extended its anti-union agenda to parts of the government that lack even this implausible rationale. In discussing the structure of the new Homeland Defense department, Bush budget director Mitch Daniels explained that the abolition of union rights in the new department might serve as a model for the rest of the federal government, that could “eventually help us untie managerial talent across the executive branch.” (35)

Secondly, beyond its direct attack on unionized federal employees, the administration has encouraged similar rollbacks against state and local employees around the country. In some cases, this has been done through legislative initiative. In the fall of 2001, for instance, the Republican Senators voted to deny collective bargaining rights to firefighters in twenty-two states where they now lack the right to organize. Less than two months after hundreds of firefighters gave their lives, Republican senators had the gall to argue that, if they were allowed to unionize, firefighters might go on strike during a national emergency. (36)

More commonly, the administration encouraged a political rhetoric in which public employees were demonized as unpatriotic if they refused to accept significant wage and benefit cuts. Secretary of Education Rod Paige publicly derided the nation's largest teachers' union as a “terrorist organization” for opposing the administration's market-based school reform agenda. (37) And repeatedly over the past two years, public employees have faced demands for steep increases in health insurance co-pays. When workers have resisted such cutbacks, elected officials have suggested that there is simply no money in the government coffers – implying that every cent in the country is needed for the war on terrorism, and therefore for working people to insist on fair wages and benefits is putting their own selfish desires ahead of the national interest. (38) Thus, when Minnesota public employees went on strike shortly after the September 11 terrorist attacks, they were accused of being anti-patriotic. (39) The same charge was faced by Portland, Oregon municipal employees when they considered striking over increased health care costs in late 2001. (40) In New York City itself, Mayor Giuliani attacked the teachers' union for not retreating from its pre-9/11 wage proposals in the wake of the terrorist attacks. (41)

Finally and most importantly, the administration has undermined public unions across the country by adopting fiscal policies that have not only created massive deficits in the federal budget but have forced mirror-image deficits in virtually every state of the nation. Even after successive years of cuts, the current state budget deficits are estimated to be the largest in more than fifty years. (42) In fiscal 2004, state governments are facing collective deficit of roughly $80 billion, which follows on 2003 deficits of roughly $50 billion. (43) By engineering deficits in nearly every state, the Bush administration has forced even liberal Democrats to govern with a budget axe. And inevitably, one of the key areas where states look to cut costs is by forcing cutbacks on public employees or contracting out a growing share of their work to lower-cost, non-union employees.

In the private sector as well, the Bush team has invoked the “war on terror” to undermine employees' power in the workplace. In early 2003, House Majority Leader Tom Delay issued a fundraising appeal for the National Right to Work Foundation explaining that “[The Foundation's] mission has become more important than ever in the wake of 9/11” and stressing that “the union bosses' selfish drive to use the national emergencies we face today to grab more power presents a clear and present danger to the security of the United States.” (44)

As various foreign nations jumped on the anti-terror bandwagon in order to brand their own long-standing enemies as “terrorists” and thus legitimate what had previously been questionable tactics, so too private employers seized on the administration's rhetoric in order to justify their own anti-labor tactics. When Verizon sought wage and benefit concessions from its employees, it rallied public opinion against its employees by pointing to a 2000 strike when militant workers cut telephone wires and cables. The company stressed that it needed to stand vigilant against “the effect of sabotage on … terrorism [and the] critical infrastructure of [the] nation,” and therefore would pursue “aggressive policing at picket sites” in the event of a strike. (45) Similarly, when Yale University police arrested lab workers and graduate students for handing out union literature in front of the school's teaching hospital, the New Haven city government moved to revoke the university's powers of arrest. Yale, a notoriously anti-union employer, insisted that to limit its police powers would inappropriately compromise its ability to protect this part of the public health infrastructure from potential terrorist attacks. (46)

But beyond providing a covering rationale for anti-union tactics, the Bush administration intervened directly in several key private industrial disputes, most notably the airlines and ports. When the airlines complained of massive losses following the industry's post-9/11 downturn, the government established a $15 billion fund to bailout firms in danger of bankruptcy. (47) At the time, the fund was justified in large part by the importance of supporting flight attendants and other ‘first responders' who, in the president's words, “stand against terror by loading a bag or serving a passenger.” (48) In fact, however, the terms of the government's support required that airlines force steep wage and benefit cuts on their employees before becoming eligible to receive bailout money. Furthermore, in October 2001 Senate Republicans defeated a proposal that would have provided financial relief to the 150,000 Americans laid off in the aviation industry as a result of the terror attacks. (49) Thus American Airlines, for instance, received $800 million from the federal government, and then laid off 20,000 employees with no severance pay whatsoever. (50) But the government's hand was even more stringent in the case of United Airlines. United, an employee-owned company, was the industry leader in wages, benefits and working conditions. (51) If United could be knocked down, all other airlines would be relieved of the competitive pressure to match United's standards. Thus, despite lining up for their own bailout money, United's competitors unified in lobbying the administration to deny that airline's request. As the Wall St. Journal editorialized at the time, “an epiphany has come to many observers and investors: United Airlines must die.” (52) The president came through: United was denied a bailout and was forced into bankruptcy, resulting in radical wage and benefit cuts and the transfer of a significant share of the airlines work to non-union subsidiaries.

Even more dramatic was the administration's intervention in the dispute between the shipping industry and West Coast longshore workers. Since the mid-1960s, the union and its employers had followed a broad agreement: all new technology was welcomed into the industry, but any new types of jobs created by the new technology would remain union positions. Emboldened by the Bush administration, the shipping companies (led by the notoriously anti-union Stevedoring Services of America, which was subsequently awarded a contract to the port of Um Qasr in southern Iraq) determined to break this forty-year agreement. They demanded that any jobs created by new technology be non-union. As a practical matter, this meant that instead of remaining family-wage jobs, these could become low-wage, no-benefit positions. Furthermore, since many of the jobs involved tracking container contents through computer operations that can be performed anywhere, these jobs could be sent overseas. From a public policy viewpoint, the government should have intervened on the side of the union. These longshore workers were engaged in what might be considered a patriotic struggle. They had refused the classic sellout offer to preserve their own jobs at the expense of those who came after them; the entire dispute was about the ability of future workers to earn a decent living at the nation's ports. However, when the shipping companies locked out their employees, the government intervened dramatically on the side of the employers.

Even before the longshore negotiations began, the White House conducted secret meetings with the shipping companies and their largest customers, including Wal-Mart and The Gap – but with no union participation. (53) Homeland Security chief Tom Ridge telephoned the union's president warning that the government would view any interruption on the docks as a threat to national security, and threatened to militarize the ports in the event of a strike. The union sought to satisfy any security concern by announcing that it would continue to load any and all military goods in the event of a strike. But Defense Secretary Rumsfeld rejected this offer, insisting that all commercial goods – not just those bound for military bases – were part of national security. (54) California's Anti-Terrorism Information Center likewise defined “terrorism” as including anything that has an “economic impact.” (55) Indeed, this interpretation fit with the proposed "Port and Maritime Security Act," which provided for long-term "terrorist" sentences for anyone who engages in acts such as "disrupting" or "interfering" with maritime commerce. When the Longshore union asked for language clarifying that this would not apply to labor disputes, the White House explicitly refused. (56) Here, the administration came close to articulating an argument normally expected from totalitarian regimes – that the economy as a whole is a “national security” issue, and anything that disrupts production is treasonous. Ultimately, the shipping companies locked out their workers, and for the first time in American history, the president invoked the Taft-Hartley Act to force locked-out employees back to work on the employer's terms. Shortly thereafter, with the government having effectively eliminated its right to strike, the union was forced to sign a contract that granted most of the companies' demand.

For students of the West Coast economy, it was telling that, in contrast to the longshore dispute, the Enron-engineered energy crisis in California was not treated as a “national security” concern. The state's soaring energy costs and $12 billion in debt that regulators concede is the product of price manipulation surely pose at least as significant a problem for the state's economy and many military bases. (57) That this source of economic drag was ignored while the government engaged in such hardball tactics in order to free employers to downgrade the quality of future port jobs again points to the centrality of the neoliberal agenda in the range of actions undertaken under the rubric of the “war on terror.”

In the political realm as well, the government has sought to reverse the trend of increasing union power at the ballot box. At a time when the administration generally seeks to eliminate red tape and reporting requirements for its “customers,” the president unilaterally imposed new reporting requirements, applicable to every Local union in the country, that are expected to cost the labor movement as much as $1 billion per year. (58) At the same time, the administration continues to push for “paycheck protection” legislation that would make it near-impossible for unions to spend money on political action. (59) Thus, a 2003 article in the conservative National Review, accusing the AFL-CIO of “far-left anti-Americanism,” declares that Republicans must “free” patriotic union members from having their dues hijacked by unpatriotic leftists. The article concludes by calling for renewed efforts to pass “paycheck protection” legislation and to make union decertification procedures easier – as a patriotic agenda.

More broadly, the administration has used the “war on terror” to push hard on the fissures that might break apart the coalition that showed up at Seattle. While a significant number of labor organizations joined in the anti-war protest of early 2003, administration representatives worked hard to convince rank and file members that such postures amounted to betrayal of the troops (an obviously potent message given that the troops come overwhelmingly from the working class). (60) Essentially, the government hoped to recreate the politics of the Vietnam War era, one of whose icons was the sight of union construction workers beating up anti-war protesters. Similarly, the administration acted to taint all immigrants with the suspicion of possible terrorist connections, thus chilling the alliance that proved so potent in southern California. Latin American immigrants were treated with increased suspicion despite the absence of any evidence suggesting that these communities might be sources of terror plots. In airports across the country, the government fired scores of undocumented workers in food service and similar service jobs – often union activists -- without any suggestion that any of these individuals have any connection to terrorism. (61) These firings were justified by the notion that undocumented workers are more susceptible to being blackmailed by terrorists due to their legal insecurity. However, the administration is content to keep these same jobs filled with low-wage, no-benefit workers – thereby presumably leaving them susceptible to bribes based on economic insecurity. The government has sought to apply the “terrorist” label to at least the most radical parts of the Seattle coalition, with environmentalists and anarchists being charged with “terrorism” for crimes such as setting fire to unoccupied SUV's. (62) Finally, the government has unsurprisingly adopted an iron-fist policy aimed at preventing ongoing anti-WTO protests, including appropriating $8.5 million in Iraqi reconstruction funds to mount massive and violent police repression against a coalition of labor, environmental and religious activists protesting the proposed Free Trade of the Americans Act in November, 2003. (63)

Above all, the administration's domestic agenda has focused on engineering a revolution of falling expectations. This strategy is entirely in keeping with the reality that awaits most of us in a future defined by neoliberal globalization. While the administration seeks to keep the public focused on Iraq, it enacts structural measures that will accelerate the downward slide of most American families, including the revocation of overtime pay for up to eight million workers and the long-term crippling of public services through massive tax cuts to the rich. (64) The atmosphere of national crisis and war footing creates a standing justification for belt tightening. If the nation is gearing up to fight evil, all of us can sacrifice to aid that effort. And by comparison with that monumental horror, the pain of slowly declining wages seems unworthy of complaint. To fuel this culture of sacrifice, the administration responded to the 2001 attacks by launching a series of public relations efforts designed to draw the population as a whole into the drama of fighting terror. These include the National Pledge of Allegiance; large-scale simulations of terror attacks in major urban centers; the duct tape advisory; the TIPS and USA Freedom Corps programs; and the ubiquitous Code Orange warnings urging all citizens everywhere to be on the lookout for suspicious behaviors. (65) But these are not to be temporary sacrifices. As Vice President Cheney has declared, the administration projects the “war on terror” to last “fifty years or more.” (66) For an administration bent on expanding the neoliberal regime and therefore deepening inequality at home, the perpetuation of this permanent war culture is a critical ingredient in the formula for political success.

Prioritizing Motives

Clearly, the administration's post-9/11 policies reflect a complex mixture of diverse goals. However, it is striking that when the goals of neoliberalism come in conflict with those of terrorism prevention, it is the economic agenda that turns out to be primary.

A dramatic example of this prioritization came in the immediate leadup to the war, in the effort to open a northern front of the invasion coming from Turkey. (67) The administration's negotiations with the Turks faced a number of difficulties. But the single biggest issue of contention concerned Turkey's obligation to the International Monetary Fund. Under previous loan agreements, Turkey had committed to an austerity plan, and it was required to carry out this plan as a condition of receiving the remainder of its IMF funding. In pre-war talks with the Bush administration, the two nations agreed on the size of payment that the Turks would require, but not on its timing. Turkey wanted to receive its American funding immediately, but the US feared that, with $6 billion in their pocket, the Turks would be free to walk away from their commitments to the IMF. The administration insisted that Turkey first implement its austerity measures before any funds would be turned over; it was primarily over this insistence that the deal broke down. That the president would risk losing the northern front of his invasion over such an issue again points to the priority of neoliberal dictates, trumping even such fundamental security concerns. The primacy of economic reform came home again when the US pushed IMF loans on Iraq even before it has regained its sovereignty. Prior to the 2003 invasion, Iraq had zero IMF debt, and therefore could not be controlled through this medium; this changed in February 2004. (68) Despite having spent the previous few months negotiating the cancellation of foreign debts based on the assumption that Iraq needed a clean bill of credit to restart its economy, chief administrator Bremer negotiated an $850 million loan from the IMF, subjecting the country's future fiscal policy to neoliberal discipline that no Constitutional assembly will be empowered to undo. (69)

Similarly, the administration opposed regulations that would have prevented corporations that relocate offshore in order to avoid paying US taxes from bidding on federal security contracts as “American” companies. Corporate leaders are explicit that, even in a time of national crisis when the country badly needs revenue to fund defense efforts, profit maximization trumps any other concern. Commenting on the practice of locating paper headquarters to the Caribbean in order to evade tax liability, one Ernst & Young partner explained simply that “the improvement on earnings is powerful enough that maybe the patriotism issue needs to take a back seat.” (70) The Bush administration apparently empathized with such sentiments, since it fought to block efforts to disqualify such firms from federal largesse. Thus, Tyco International cut its tax bill by more than $400 million through a paper relocation – but was still awarded a $100 million contract for terror-related emergency response services. (71)

Finally, the massive no-bid contracts awarded to Halliburton and Bechtel reflect the true place of national security in the administration's agenda. Apart from the familiar questions of cronyism and contractor fraud, both these firms should logically be on the bottom of any list of security-conscious contractors. While Vice President Cheney was CEO of Halliburton, its subsidiaries sold $73 million worth of oil equipment and services to Iraq. The company further violated US sanctions in dealings with Iraq, Iran, Libya and Burma. (72) For its part, just four months after the gassing of the Kurds, Bechtel helped Saddam's government build a chemical plant using dual-use technology. It was this plant that UN weapons inspectors later pointed to as evidence that Iraq had been building weapons of mass destruction.
Despite US sanctions to the contrary, Bechtel and its subsidiaries continued supplying Iraq with banned weapons, military logistics and construction services throughout the late 1990s and up until 2002. (73) Again, the fact that such a track record does not disqualify companies from receiving the preeminent “national security” contracts suggests that security concerns are subordinate to the administration's broader economic and political agenda. (74)

On the home front, the contradictions are even more glaring. The truth is that there are two wars going on. There's the war against terrorism; and there's the war against working people. And whenever there's a conflict between the goals of the war on terror and those of the war on workers, it turns out that the war on workers is really the administration's top priority. Time after time, the administration has shown that its interests in pushing back American working people trumps anything to do with the war on terror.

One of the most glaring places where we see the hypocrisy between the administration's words and deeds is in its treatment of the heroes of September 11th. In the weeks following the attack, the whole country celebrated a new brand of heroes – firefighters, flight attendants, postal workers, port workers and others who the country relies on as “first responders” and “front-line workers” in the war against terror. These are people who put their lives on the line in the World Trade Center attack, and who we all count on to continue acting as a shield between potential terrorists and the public at large. However, rather than paying honor to these people, and improving their working conditions in order to guarantee that they're prepared to do a good job if, God forbid, another emergency hits – instead of this, we've seen the government attack these exact same workers in an effort to undermine their job standards.

Similarly, the administration chose to delay improving the airport baggage screening security for months – leaving this process in the hands of private companies even though they had a track record of hiring ex-convicts and falsifying records regarding background checks – in order to prevent baggage screeners from having civil service, whistleblower or union protections. (75) So too, while the administration has insisted that undocumented Mexican workers are too great a security risk to be allowed to serve McDonald's in LAX, the same officials are aiming to open up the nation's highways to low-wage Mexican truck drivers who soon will be able to drive from Chiapas to Anchorage, inevitably drastically undermining wage standards for American truckers. (76)

In economic as well as employment policy, the administration has regularly demonstrated the priority of corporate over security concerns. Republican Congressional leaders, for instance, sought to prevent anti-terrorist legislation from including restrictions on offshore banking. Because the same money-hiding schemes are used by the investing class and sophisticated corporations (such as Enron), it was more important to preserve the ability of big business to avoid their share of the tax bill than to guarantee the strongest possible anti-terrorism legislation. (77)

In all these ways, we see that when there is a conflict between security concerns and the neoliberal project, it is generally the latter that triumphs. This, finally, brings us back to our opening question. As Lawrence Fishburne's Morpheus might put it: What is the “War on Terror”? And as in Fishburne's Matrix, to a large extent the answer is: The “War on Terror” is control. Having come through this side of the corporate looking glass, it is clear that things are not what they initially appear (You think that's air you're breathing?). While there is a genuine need to take whatever steps are necessary to prevent future attacks on American civilians, these steps account for a small share of the policies that make up this war. The bulk of this offensive, both abroad and at home, has nothing to do with making us safer. On the contrary, it is a strategy for further enriching the select few who are indeed busy knitting together a seamless system of global governance beyond the grasp of democratic citizens, while the rest of us will find both our standard of living and our ability to exert control over our economic lives continually diminished.

Above all, this strategy relies crucially on popular subscription to the belief that we are a nation at war. This is why, no matter how many enemy are killed or captured, the Bush administration will never declare the war over. Imagine, for a moment, what the shape of American politics would be if there were 2.7 million people laid off, record bankruptcies, record families without health insurance, record retirees losing their pensions and health insurance, and massive raiding of the public treasury by the richest people in the country – and no threat of terrorism. Clearly, the administration's agenda would be impossible to enact. To avoid this scenario, the administration's strategy must include a creeping police state, with laws that are increasingly aimed not at foreign terror but at domestic protest, in order to keep a lid on the unrest that would otherwise surface, and with the ever-present accusation that administration critics are traitors to the country. (78)And above all, it's to convince us that we are in a permanent state of war that must trump all other concerns.

The truth is that we are not at war. The war against terrorism is over. We won the war in Afghanistan, dealing a massive blow to both the troops and infrastructure of those who knocked down the Twin Towers. Of course it is impossible to guarantee that there will never be another attack on American civilians. But it will never be possible to completely eradicate this possibility. There is still a need for the government to police against possible terrorist acts. But this is the job of the police or the FBI, not of every one of us. Not all of us are potential suspects. Not all of us have to be junior police. And not everything has to be subordinated to a state of national emergency. The world did not permanently change on September 11, 2001. It didn't even mark Americans initiation into the circle of nations accustomed to domestic terror; that was accomplished by the Oklahoma City bombing if not before. There is no reason that the police and intelligence agencies cannot pursue terror threats as they did after the first World Trade Center bombing, while the rest of us carry on our lives the same as they were three years ago. Their work does not amount to a “war,” nor does it require our involvement.

While the war on terrorism is over, the class war at home is still raging. And this is not a war that we are waging, but that is being waged on us – by the Bush administration and the class interests it represents. This is the truly urgent front of our war, at home. Our country is under siege by what may be the most cynical administration in history – and frankly, the most un-American. It is up to us to stand up against the illusion of war and the insidious agenda it masks, and to insist that this truly be a government of, by, and for the people.


  1. Thomas Friedman, The Lexus and The Olive Tree, Farrar, Strauss & Giroux, New York, 1999, p. 373.
  2. In addition to the evidence that the government never had clear-cut evidence that Iraq possessed such weapons, administration figures conceded as much before the WMD argument became strategically necessary. In February 2001, Secretary of State Powell stated that “He (Saddam Hussein) has not developed any significant capability with respect to weapons of mass destruction. He is unable to project conventional power against his neighbors.” In April of that year, National Security Advisor Condoleeza Rice similarly explained that “We are able to keep [Saddam's] arms from him. His military forces have not been rebuilt.” (“Pilger claims White House knew Saddam was no threat,” Sydney Morning Herald, September 23, 2003). Likewise, the President finally acknowledged that “We have no evidence that Saddam Hussein was involved with the September 11” attacks (“Bush: No evidence Saddam was involved in 9/11 attacks,”, September 18, 2003)
  3. Peter S. Goodman, “US Adviser Says Iraq May Break With OPEC: Carroll Hints National Could Void Contracts,” Washington Post Foreign Service, May 17, 2003, p. E01.
  4. On this point, see Steven R. Weisman, “U.S. Aides Hint Afghan voting May Be Put Off,” New York Times, February 16, 2004; and Pepe Escobar, “Holdup at the ballot box,” Asia Times, February 19, 2004.
  5. Coalition Provisional Authority Order Number 14 prohibits any media content that “incites civil disorder,” or that “advocates the return to power of the Iraqi Ba'ath Party;” the CPA has the power to inspect media materials and equipment any any time, and can confiscate materials and equipment or shut down media outlets determined to have violated these provisions. Coalition Provisional Authority Order Number 19 prohibits public demonstrations, picketing or marches on roadways or in public places without the prior written approval of CPA authorities; the Order further bans demonstrations during rush hour, demonstrations that last longer than four hours, demonstrations with more than the maximum number of people allowed by the CPA; and bans any individual or group from participating in more than one demonstration, assembly or march on the same day in the same town. On press restrictions see also “Arab networks in Iraq ‘face curbs'”, BBC News,, September 23, 2003; “30 Media Outlets Protest Treatment in Iraq,” Editor & Publisher, November 13, 2003.
  6. Nicolas Pelham, “UK officials say Iraq elections by June viable,” Financial Times, January 19, 2004, The UN report, issued on February 23, 2004, laid out an eight-month timetable of steps needed to hold elections, the first of which was establishing a reliable voter role. It is telling that in 10 months of occupation, the CPA has not even begun work on this first step. UN report is available at
  7. Coalition Provision Authority Order No. 30 (“Reform of Salaries and employment Conditions of State Employees”).
  8. Coalition Provision Authority, Public Notice Regarding Organization In The Workplace, June 6, 2003.
  9. Coalition Provision Authority Order No. 12 (“Trade Liberalization Policy”); No. 30 (“Reform of Salaries and employment Conditions of State Employees”); No. 37 (“Tax Strategy for 2003”); and No. 39 (“Foreign Investment”). See also Naomi Klein, “Privatization in Disguise,” The Nation, April 28, 2003.
  10. Quoted in Peter S. Goodman, “US Adviser Says Iraq May Break With OPEC: Carroll Hints National Could Void Contracts,” Washington Post Foreign Service, May 17, 2003, p. E01.
  11. “Statement by AFL-CIO President John J. Sweeney on A New Labor Code for Iraq,” Press Release, January 22, 2004, Saddam's labor law is being actively enforced by the CPA, which in June 2003 issued an additional order threatening that anyone who “incites civil disorder” is subject to detention as a prisoner of war. Meanwhile, despite the $87 billion US commitment to reconstruction, neither the US nor any other donor has provided funding for unemployment insurance for those laid off from previously state-run industries. David Bacon, “Saddam's Labor Laws Live On,” The Progressive, December, 2003.
  12. Paul Bremer, “Operation Iraq Prosperity,” Wall Street Journal, June 20, 2003.
  13. “Remarks of the President at the 20th anniversary of the National Endowment for Democracy,” Press Release, November 6, 2003,
  14. “Remarks by the President at Whitehall Palace,” Press Release, November 19, 2003,
  15. “Remarks of the president at the 20th anniversary of the National Endowment for Democracy,” Press Release, November 6, 2003,
  16. A February 2003 State Department report warned that “even if some version of democracy took root … anti-American sentiment is so pervasive that Iraqi elections in the short term could lead to the rise of Islamic-controlled governments hostile to the United States.” Patrick Basham and Christopher Preble, “The Trouble With Democracy in the Middle East,” Cato Institute Daily Dispatch, November 30, 2003, The Bush-Bremer administration is clearly also committed to securing long-term military basing rights in Iraq, and has sought to nail down this arrangement prior to the drafting of any new constitution for the country. On this point see Dexter Filkins, “Iraqis Say Deal on US Troops Must Be Put Off,” New York Times, February 23, 2004,
  17. Indeed, it may be that privatization of the oil industry is the true leading edge of this “tsunami.” Within days after the fall of Baghdad, oil executive and Republican Senatorial candidate S. Rob Sobhani reported that investors were anxious for oil privatization in Iraq to lead to the same in Iran, Kuwait and Saudi Arabia. “In Iran, it would catch just like wildfire,” gushed Sobhani. Quoted in Naomi Klein, “Privatization in Disguise,” The Nation, April 28, 2003.
  18. Robin Wright and Glenn Kessler, “US bids to bring democracy to Arab states,” The Age (Melbourne, Australia), February 10, 2004.
  19. For a brief review of this issue, see Trade & Investment in Services: The Stakes for Workers and the Environment, Alliance for Sustainable Jobs and the Environment, Portland, OR, February 2002,
  20. Coalition Provisional Authority Order No. 39, “Foreign Investment,” stipulates that “a foreign investor shall be entitled to make foreign investments in Iraq on terms no less favorable than those applicable to an Iraqi investor.”
  21. Lizette Alvarez, "Bush Supports House Bill on Airport Screeners," New York Times, October 26, 2001.
  22. Robert Pear, "Spending war with white house focuses on countering terrorism," New York Times, November 8, 2001; Elizabeth Becker, "Ridge Deflects Pleas to Help the Cities Pay Security Costs," New York Times, October 26, 2001; Paul Krugman, “Hitting the Trifecta,” New York Times, December 7, 2001; Adam Clymer, "Republicans in Senate win round on curbing spending," NYT 12/7/01.
  23. For instance, House Speaker Denny Hastert insisted that the terrorist attacks had made Fast Track authority a "defining vote." "This Congress will either support our president, who's fighting a courageous war on terrorism and redefining American world leadership,” he stated, “or it will undercut the president at the worst possible time …. If we vote down this legislation we send a terrible signal to the rest of the world." Quoted in Manuel Perez-Rivas, "House approves 'fast track' trade bill by one vote,", December 6, 2001. Similarly, Hewlett-Packard Vice President Stephen Nigro stressed the importance of passing Fast Track by arguing that "as the nation's healing after Sept. 11 continues… we must not isolate ourselves." Letter to the Editor, The Oregonian, October 15, 2001.
  24. Sassen, Saskia, The Global City, Princeton University Press, Princeton, 1991.
  25. Lawrence Mishel, Jared Bernstein and Heather Boushey, The State of Working America 2002/2003, Cornell University Press, Ithaca, 2003, p. 123. Data is for private production and non-supervisory workers, which account for approximately 80% of wage and salary employees.
  26. Lawrence Mishel, Jared Bernstein and Heather Boushey, The State of Working America 2002/2003, Cornell University Press, Ithaca, 2003, pp.238-250.
  27. Lawrence Mishel, Jared Bernstein and Heather Boushey, The State of Working America 2002/2003, Cornell University Press, Ithaca, 2003, pp. 51-57; Left Business Observer #104, 4/21/03.
  28. Lawrence Mishel, Jared Bernstein and Heather Boushey, The State of Working America 2002/2003, Cornell University Press, Ithaca, 2003, pp. 43-47, show the failure of young families' real earnings to advance as well as their parents. When the decline in health care and pension coverage are added to this picture, many families end up unable to reproduce the living standard of their parents.
  29. “The Union Difference: 26% of Voters Are From Union Households,”
  30. “Union Members in 2003,” Press Release, January 21, 2004, US Bureau of Labor Statistics. Posted at
  31. TSA representative Chris Rhatigan and Director James Loy, quoted in David Bacon, “Screened Out: Using National Security to Bash Workers,” The Nation, May 12, 2003.
  32. David Bacon, “Screened Out: Using National Security to Bash Workers,” The Nation, May 12, 2003.
  33. Inernational Association of Fire Fighters: Talking Points on the Public Safety Employer-Employee Cooperation Act,; “Airport screeners should have same benefits and protections,” News Release, American Federation of Government Employees, November 26, 2001,
  34. AFL-CIO, Work in Progress, 1/14/02
  35. Quoted in Bacon.
  36. “Senate Republicans Thwart Collective Bargaining Bill,” Professional Fire Fighters of Idaho newsletter, November 6, 2001,
  37. John King, “Paige calls NEA ‘terrorist organization',”, February 23, 2004.
  38. Steven Greenhouse, “Some Workers Are Finding It a Difficult Time to Strike,” New York Times, October 2, 2001.
  39. Ashley Grant, “Strikers struggle to show patriotism when country at war,” Associated Press, October 10, 2001.
  40. One conservative commentator warned that Portland workers against striking, explaining that "in the aftermath of the terrorist attacks… this is a time to come together, not break apart." Steve Duin, "'Porkland' labor unions might want to lay off," Oregonian, October 11, 2001.
  41. Steven Greenhouse, "Labor Runs Into Hard Times as it Negotiates for Raises," NYT 12/9/01.
  42. Karen Dolan, “The Costs of War Hit Home,”, 6/30/03.
  43. “War and the Economy: too Many Guns, Not Enough Butter,” United for a Fair Economy, March 2003; Karen Dolan, “The Costs of War Hit Home,”, 6/30/03.
  44. Letter from House Majority Leader Tom Delay, on behalf of National Right to Work Foundation, January 8, 2003.
  45. William Johnson, “Health Care, Job Security Key Issues: Unions Gear Up for Showdown at Verizon,” labor Notes, August 2003.
  46. Marissa Yaremich, “Constable issue still unresolved,” New Haven Register, November 26, 2002.
  47. “Congress approves $15 billion airline bailout,” CNN, September 22, 2001,
  48. “Remarks by the President to Airline Employees at O'Hare International Airport,” Press Release, September 27,2001.
  49. Wash State Labor Council, “One month later, attacks continue on working people,”
  50. Steve Duin, "'Porkland' labor unions might want to lay off," Oregonian, 10/11/01.
  51. “Congress approves $15 billion airline bailout,” CNN, September 22, 2001,
  52. Editorial, Wall St. Journal, 4/2/03
  53. David Bacon, “Screened Out: Using National Security to Bash Workers,” The Nation, May 12, 2003.
  54. David Bacon, “Screened Out: Using National Security to Bash Workers,” The Nation, May 12, 2003.
  55. Jack Heyman, “Port Anti-War Protest: Police Might vs Civil Rights,” Oakland Tribune, June 17, 2003.
  56. Private communication from Robert Remar to National Lawyers Guild, April 17, 2002, shared with the author by the NLG. Remar is an attorney representing the Longshore union.
  57. Robert Scheer, “Blame Bush for California's Budget Woes,” the nation, July 1, 2003.
  58. Rick Fantasia and Kim Voss, “Bush Administration's Low-intensity War Against Labour,” Le Monde Diplomatique, June 2003; “Statement by AFL-CIO President John J. Sweeney on New Regulations for Union Reporting,” Press Release, December 23, 2002,
  59. “President Bush Outlines Campaign Reform Principles,” News Release, March 15, 2001,
  60. Holly Sklar, “Upper-Class Tax Cuts, Working-Class Soldiers,”, 4/11/03.
  61. Paul Wilborn, “Group says immigrant workers suffered since September attacks,” Associated Press, September 7, 2002.
  62. The critical turn in recent proposals is to define terrorism as including attacks on property rather than persons. For instance, Rep. Candice Miller (R-Michigan) introduced an “ecoterrorism” bill defining the crime as “intentionally damag[ing] the property of another with the intent to influence the public with regardt to conduct the offender considers harmful to the environment.” The corporate-sponsored American Legislative Exchange Council has drafted model legislation categorizing any act of property damage in the name of animal rights or environmental protection as “domestic terrorism.” Brad Knickerbocker, “New laws target increase in acts of ecoterrorism,” Christian Science Monitor, November 26, 2003. A slightly more far-fetched analysis that of Rick Schmidt, founder of the International Hummer Owners Group (IHOG) , who responded to the 2003 burning of unoccupied Hummers by insisting that “the [Hummer] is an American icon … a symbol of what we all hold so dearly above all else, the fact that we have the freedom of choice, the freedom of happiness, the freedom of adventure and discovery, and the ultimate freedom of expression…. Those who deface a Hummer in words or deed deface the American flag and what it stands for.” Quoted in Left Business Observer #104, 4/21/03.
  63. Douglas Hanks, “City secures money to run talks,” Miami Herald, November 6, 2003. A Miami judge presiding over the charges against protestors stated that he had personally witnessed “no less than twenty felonies” committed by police officers against protestors. Amy Driscoll, “Judge: I saw police commit felonies,” Miami Herald, December 20, 2003. See also “Letter Sent by AFL-CIO President John Sweeney to Florida Gov. Jeb Bush Urging an Independent Investigation into Miami Police Force Tactics During FTAA Demonstrations,” Press Release, December 3, 2003,
  64. The 2003 package of tax cuts are estimated to cost $2 trillion through the year 2013; this is in addition to the 2001 tax cuts that are projected to total $1.6 trillion through 2010. Holly Sklar, “Upper-Class Tax Cuts, Working-Class Soldiers,”, 4/11/03. The 2003 cuts are projected to provide 50% of their benefit to the richest 1% of the country. Ruth Rosen, “The cost of war,” San Francisco Chronicle, March 27, 2003. Up to eight million American workers would lose their right to over time pay under the president's policy. Molly Ivins, “Goodbye, 40-hour work week,”, April 24, 2003.
  65. The timing of some administration actions appears at least potentially politically motivated. For instance, the government raised the threat level to “high” – with dramatic advice for every family to secure three days' food and water along with duct tape and other emergency supplies – on February 11, 2003, just prior to worldwide antiwar demonstrations scheduled for February 15. Jeanne Meserve, “Safety measures in alert's wake,”, February 11, 2003.
  66. Quoted in John Pilger, The New Rulers of the World, Verso, New York, 2002, p. 1.
  67. Dexter Filkins, “Turkish Parliament Refuses to Accept G.I.'s in Blow to Bush,” New York Times, March 2, 2003.
  68. Nomi Prins, “Making a Killing in Iraq,” Left Business Observer no. 105, Aug 6, 2003, p. 2.
  69. Naomi Klein, “Democracy and Robbery,” The Guardian, February 10, 2004,
  70. Arianna Huffington, “Tax Avoidance and a Tan,”, May 15, 2002.
  71. The IRS estimates that it loses upward of $70 billion per year through schemes like Tyco's. Arianna Huffington, “Tax Avoidance and a Tan,”, May 15, 2002.
  72. U.S. Labor Against the War, The Corporate Invasion of Iraq: Profile of U.S. Corporations Awarded Contracts in U.S./British-Occupied Iraq, USLAW, Berkeley, 2003, pp. 6-7.
  73. U.S. Labor Against the War, The Corporate Invasion of Iraq: Profile of U.S. Corporations Awarded Contracts in U.S./British-Occupied Iraq, USLAW, Berkeley, 2003, 2003.
  74. The administrationg declared that these contracts represented “national security” priorities and therefore had to eschew normal bidding procedures in favor of closed-door, invitation-only bidding. The six firms invited to bid on the initial contracts contributed a collective $2.2 million to Republican campaigns in 2000-2002. Nomi Prins, “Making a Killing in Iraq,” Left Business Observer no. 105, Aug 6, 2003, p. 2.
  75. David Bacon, “Screened Out: Using National Security to Bash Workers,” The Nation, May 12, 2003; "Taking Care of Business," Paul Krugman, Opinion column, NYT 10/28/01.
  76. Suzanne Gamboa, “Mexican Trucks Allowed More Range,” Associated Press, November 27, 2002.
  77. Adam Clymer, "Antiterrorism Bill Passes; U.S. Gets Expanded Power," NYT 10/26/01
  78. The demonization of administration critics began with Attorney General Ashcroft's infamous insistence, in Congressional testimony, that those who voice concern over his restrictions on civil liberties are “aid[ing] terrorists” and providing “ammunition to America's enemies.” Neil Lewis, "Ashcroft Defends Antiterror Plan and Says Criticism May Aid Foes," NYT 12/7/01.

* Gordon Lafer, Associate Professor
Labor Education and Research Center
Department of Political Science
University of Oregon
(541) 346-2786
April, 2004

Gordon Lafer is an Associate Professor at the University of Oregon and is author of The Job Training Charade (Cornell University Press, 2002). He has served as an economic analyst for the Mayor's Office in New York City and has provided strategic research for a wide range of labor unions. He writes on issues of labor and economic policy and the geography of post-industrialism.

worksite home