25 years ago: WorldCom announces the massive takeover of MCI
On October 1, 1997, WorldCom Corporation announced its intention to launch a $30 billion takeover of MCI, marking a quantum leap in the takeover fever that had begun to sweep through the telecommunications and telecommunications industries. in the mid-1990s. At the time, the offer was the largest takeover bid in history, made by a company that few people, even on Wall Street, had heard of before the last year.
WorldCom was the personal vehicle of Bernard Ebbers, a Canadian-born capitalist who came to Mississippi to play college basketball and stayed there to build a telecommunications empire based on the speculative rise of the stock market. Ebbers started LDDS Communications in 1983 after the court-ordered dissolution of AT&T’s monopoly, leasing long-distance service from AT&T and reselling it to small and medium-sized businesses.
Beginning in 1992, Ebbers acquired over 40 companies. In 1995, LDDS bought Wiltel Network Services for $2.5 billion, and Ebbers renamed the combined company WorldCom, then the fourth-largest U.S. long-distance carrier, after AT&T, MCI, and Sprint. In 1996, he bought MFS Communications, which owned local access phone systems in 46 cities, and its subsidiary Uunet Technologies, a major Internet hardware company, for $12 billion in stock.
In 1997, before targeting MCI, Ebbers purchased the Internet hardware assets of CompuServe and America On-Line, and on the same day as MCI’s bid, announced the $2.9 billion purchase of Brooks Fiber Properties, another local access telephone owner. systems.
What was most remarkable was that this financial empire had been built entirely on WorldCom’s own stock, which had soared 3,000% since 1989. Every takeover bid was made through stock offerings and each trade drove up the stock price even further.
WorldCom was essentially a front company to perform these financial transactions, providing no actual product. Originally, it was a middleman that resold AT&T’s long distance services and obtained its physical assets in exchange for stock exchanges. That didn’t stop Wall Street from celebrating MCI’s takeover as a financial masterstroke. WorldCom shares climbed another 10% after the takeover announcement.
Ebbers’ paper empire disintegrated in 2002, after the dotcom bubble collapsed, and he was eventually convicted of fraud and sentenced to 25 years in prison.
50 years ago: China and Japan restore diplomatic relations
On September 29, 1972, the Chinese and Japanese governments signed a joint communiqué that restored diplomatic relations, which had been severed in 1937 with the Japanese invasion of China at the start of World War II in Asia. The agreement recognized the People’s Republic of China (PRC) as the sole government of China and officially ended the state of war between China and Japan, which had not yet officially ended.
The statement included the usual diplomatic language on the recognition of embassies and international law. He said China would drop its demands for war reparations. Japan offered a semi-confession of war guilt in exchange: “The Japanese side is deeply aware of the responsibility for the severe damage that Japan has caused to the Chinese people in the past through war, and deeply blames itself.”
The treaty was in line with a shift among capitalist countries, which began to recognize the Chinese Communist Party’s government of the PRC, led by Mao Zedong. At the same time, capitalist governments severed their formal relations with Taiwan (officially the “Republic of China”), which they previously considered the real government of China in exile.
The China-Japan communiqué placed particular emphasis on Taiwan, an expression of the island’s centrality to Beijing. This was particularly significant because Japan had ruled Taiwan as a colonial possession since its seizure in its 1895 war with the Chinese Empire. “The government of the People’s Republic of China reiterates that Taiwan is an inalienable part of the territory of the People’s Republic of China,” the document states. “The Government of Japan fully understands and respects this position of the Government of the People’s Republic of China.”
This process of normalizing relations with China began with the recognition and seat of the PRC in the United Nations in 1971, replacing Taiwan on the Security Council and with a right of veto, and accelerated with the visit of the American president. Richard Nixon in China to meet Mao in February 1972. Although the United States did not officially recognize the PRC until 1979, Nixon’s visit signified a significant change in American foreign policy toward China, a change that American allies like Japan were ready to reflect.
The driving force behind the willingness to accept the reality that the PRC had ruled China since the Chinese Revolution of 1949 was major shifts in global political relations and the global economic crisis triggered by the end of the Bretton Woods system.
The Sino-Soviet split, which had come to light in the early 1960s, had soured relations between Beijing and Moscow and presented an opportunity for Washington to bring China closer to itself and further isolate the Union. Soviet during the Cold War. An added benefit for the United States and its allies was that the establishment of relations with China put pressure on its ally in North Vietnam to accept a peace agreement that would leave in place the American puppet regime in the South. Vietnam while the American war effort was interrupted.
Another longer-term factor was the potential access to the “Chinese market” and cheap labor from China’s huge working class. As the “Nixon shock” propelled global inflation to new heights, prompting demands for wage increases from American workers to cope with rising prices, the prospect of shifting production to overseas to China was an opportunity to restore profits for American and Japanese capitalism. A few years later, in the late 1970s under Deng Xiaoping, the Chinese Communist Party’s Maoists showed that they were more than happy to aid in this attack on the living standards of the international working class.
75 years ago: The Stalinist bureaucracy establishes the Cominform
On September 27, 1947, a five-day conference in Poland, bringing together representatives of the Stalinist bureaucracy of the Soviet Union and eight other Communist parties, concluded with the formation of a new international organization. The entity, named the Communist and Workers’ Parties Information Office, was nicknamed the Cominform.
The organization had nothing to do with the struggle to unify the international working class on the basis of a socialist program. Instead, it was another sordid maneuver by the bureaucracy that had usurped power from the working class in the Soviet Union, aimed at strengthening its own position.
The conference had several objectives. One of them was to ensure the domination of the Soviet bureaucracy over the states of Eastern Europe, in which the Communist parties had come to power after the Second World War. These ruling parties were all led by tried Stalinists. The Soviet bureaucracy, however, feared the consequences of the success of mass partisan movements, particularly in Yugoslavia, as well as the prospect of some of those states turning to imperialist powers.
More broadly, the formation of the Cominform is part of the Cold War initiated by the Truman administration in the United States. During 1947, the United States had proclaimed the Truman Doctrine, sanctioning aggressive American interventions in the world, as well as the Marshall Plan for the reconstruction of Europe under American imperialist supervision.
The document proclaiming the conference asserted that the world was divided between an imperialist camp, led by the United States, and democratic and socialist forces led by the Soviet Union. An independent role of the working class was completely excluded.
The document included a defense of the policies pursued by the Stalinist bureaucracy during World War II and its consequences. It had aligned itself with the so-called “democratic” imperialist countries, including the United States, Britain and France. This included agreements for the division of Europe at the end of the war, based on communist parties stabilizing capitalist rule in Western Europe and preventing socialist revolution.
As part of this counter-revolutionary program, the Soviet bureaucracy in 1943 had dissolved the Comintern. Founded in 1919, it had been an international working class party committed to world revolution until the consolidation of the Stalinist bureaucracy in the 1920s and the defeat of the Left Opposition led by Leon Trotsky. Under Stalin’s control, the Comintern had served as the foreign policy arm of the bureaucracy, betraying multiple revolutions to reach a compromise with imperialism. The Cominform has now continued these filthy traditions.
100 years ago: US authorities detain artists arriving from Soviet Russia
On October 1, 1922, American immigration authorities refused to allow American dancer and choreographer Isadora Duncan and her Russian husband, poet Sergei Yesenin, to disembark in New York from an ocean liner that had arrived from France. It was later revealed that the detention order came from the Department of Justice. Duncan held a Russian passport because she had married a Russian citizen. His visa to visit the United States was in order.
“We don’t mix political issues. It is only in the realm of art that we work,” the dancer said in a statement.
The official reason for the detention was never specified. The New York Times wrote, in what was overall a breathtakingly lighthearted article, “it was understood that the instructions came from Washington and that the Soviet opinions expressed by the dancer were involved.”
Duncan was one of the best-known celebrities of his time and a central figure in the development of modern dance. She was returning to the United States for the first time since 1917 for a tour. In 1921, while in Soviet Russia, she met the popular poet Yesenin and married him a year later.
After being held on the ship, the two were taken to Ellis Island where they were questioned. Duncan denied that she was a communist. Upon his release, Duncan told the press: “They detained me because I was from Moscow…I don’t think I can tell you about a specific charge, if there was one, and if there was one, it was unsubstantiated.”