On Sunday, Oct. 3, the Greek Cabinet voted on a new budget proposal for 2012 that includes 6.5 billion euros ($8.5 billion) in spending cuts and tax hikes, including cutting 30,000 government jobs. This budget will go to the Greek Parliament on Monday, Oct. 4, in hopes of getting another 8 billion euros ($10.5 billion) from the European Financial Stability Facility (EFSF) in order to pay back German, French and other European banks that own large amounts of Greek bonds.
San José, CA – On Sept. 13, the Census Bureau released their annual report on income, poverty, and health insurance in the United States. The report said that the number of people below the official poverty line rose from 14.3% in 2009 to 15.1% in 2010. This meant that 2.6 million more people fell into poverty last year, and the total of 46.2 million poor was the largest number in more than 50 years of records. Worst hit were African Americans (27.4% below the official poverty line), Latinos (26.6%), and children (22.0%).
San José, CA – In a sign that the economy is on the edge of another downturn, the Labor Department reported on Sept. 2 that there was no gain in jobs in August. Not counting last summer when there were large layoffs of temporary Census workers, this is the worst jobs report since February of 2010. The Labor Department also revised down the job gains for June and July, so that average job gain over the last three months was only 35,000 net new jobs per month. This is far below the 200,000 or so jobs that a normal recovery would be generating at this stage of an economic expansion.
Berkeley, CA – On Aug. 14, artist Iwao Lewis Suzuki was inducted into the La Peña Cultural Center Community Hall of Fame, which recognizes cultural activism for social change. Previous inductees into the Community Hall of Fame include Dolores Huerta, Victor Jara, Linda Tillery and Angela Davis.
San José, CA – On August 5, Standard and Poors, commonly known as S&P, downgraded U.S. government bonds from the highest rating AAA to the second-highest AA+. At the same time the S&P called for even more austerity, saying that $4 trillion in cuts in U.S. government spending were needed, not the $2 trillion agreed upon earlier in the week. S&P criticized the U.S. government for not making cuts in Social Security and Medicare. In addition, S&P said that the federal government spending cuts needed to come sooner, increasing the chances of a new downturn in the economy, or the feared ‘double-dip’ recession.
San José, CA – The recent federal debt limit deal passed by the House and Senate and signed into law by president Obama promises at least $2.1 trillion in spending cuts and lower interest payments over the next ten years. This deal did not include any savings from ending the wars in Iraq and Afghanistan, or from restoring higher taxes for the rich. It was a victory for the Tea Party-backed Republicans and benefits the rich and Wall Street. At the same time programs serving poor and working people will be the target for cuts and the deal opens the door for cuts in Social Security and Medicare.
The recession ain’t over yet, fears of a ‘double-dip’ rise
San José, CA – On July 29, the Commerce Department released its report on Gross Domestic Product or GDP for the Second Quarter (April to June) of 2011. GDP, which measures the value of goods and services produced in the United States, rose at only a 1.3% annual rate, much slower than most mainstream economists expected. Even worse, the First Quarter (January to March) economic growth was cut from an earlier estimate of 1.9% to just 0.4%.
The Congressional Progressive Caucus proposal is good but could be better
San José, CA – A proposal for a federal budget that serves working people and not the rich and corporations needs to include four points. First, a budget proposal for the people needs to recognize that the biggest economic problem right now is not the federal budget deficit, but rather an unemployment rate of almost 10% more than two years after the recession officially ended. Second, given the fact that the public debt is mainly due to wars, tax cuts for the wealthy and recessions, balancing the budget must be done in a way that cuts military spending, raises taxes on the well-to-do and increases spending in the short run to get more people back to work. Third, future funding problems for Social Security and Medicare must protect the programs by increasing funding, not by cutting back on the safety net for seniors.
Plan would cut taxes for the wealthy and corporations while cutting Social Security
The Bipartisan Senate Proposal is being pushed by the so-called Gang of Six – Saxby Chambliss (R-Georgia), Tom Coburn (R-Oklahoma), Kent Conrad (D-North Dakota), Mike Crapo (R-Idaho), Dick Durbin (D-Illinois), and Mark Warner (D-Virginia). Four of them were members of the National Commission on Fiscal Responsibility and Reform which was unable to pass a proposal to cut the Federal Budget deficit. This proposal has been welcomed by President Obama, who said that he endorsed the thrust of the proposal.
San José, CA – On July 8, the U.S. Department of Labor released its report on unemployment and new job creation for the month June. The report said that the unemployment rate rose for the third month in a row to 9.2%, while only 18,000 new jobs were created. The job creation was much worse than most mainstream economists expected, and was less than one-tenth as many new jobs as in February, March and April. The number of new jobs created in May was revised down from a weak 54,000 to an even worse 25,000.
On June 21, the Chairman of the U.S. Federal Reserve Bank, Ben Bernanke, gave a very downbeat report on the U.S. economy following a two day meeting of the Fed. Bernanke, who is also a professor of economics, admitted that he didn’t have a good explanation for why economic growth in the United States was so weak and the unemployment rate stuck at about 9%. But Marxist political economy does have an explanation: that economic stagnation is a natural outcome of a capitalist economy.
On June 19th the *Washington Post* published “With Executive Pay, Rich Pull Away from Rest of America” by Peter Whoriskey. This very informative article connected the rise in corporate executive’s pay with the growing economic inequality in the United States, using the example of a large U.S. dairy company combined with recent research by economists on high incomes. At the same time the article only offered very vague explanations for *why* the rich are winning out at the expense of almost everyone else.
San José, CA – In the first week of June, two important reports showed a sharp slowdown in the U.S. economy. On Friday, June 3, the Department of Labor said that unemployment in May rose to 9.1%, while only 54,000 new jobs were created, far less than what mainstream economists were predicting. Two days earlier, on June 1, a report on home prices showed another drop of 4.2% in the first three months of 2011, bringing home prices to a new low since the housing market began to tank in 2006.
San José, CA – On Nov. 18, Republicans in the House of Representatives blocked an attempt by the House Democrats to extend funding for Federal Unemployment Insurance, which expires on Nov. 30. If funding is not extended, almost a million jobless workers will be cut off from their benefits immediately. Over a million more will lose their benefits by the end of December.
On Nov. 10, former Colorado Republican Senator Alan Simpson and Erskine Bowles, investment banker and Morgan Stanley board member, released a draft report on deficit reduction. Both are co-chairs of the bipartisan deficit reduction commission appointed by President Obama. Their recommendations have been widely slammed by labor union and other progressives for good reason: The recommendations open the doors to even more austerity for working people while proposing lower tax rates for the well-to-do.
San José, CA – On Oct. 8, the Department of Labor reported that local public schools had cut 49,800 jobs in September. Included in the layoffs this fall was kindergarten teacher Amanda VanNess, who stood with President Obama when he signed a bill giving $26 billion to local schools in August of 2009. While this federal stimulus money did save Ms. VanNess’ job in the Toledo (Ohio) Public School District in 2009, she was laid off this fall as the district’s drop in students led to another round of cuts.
San Bruno, CA – On Aug. 25, the Commerce Department reported that new home sales in July fell 12.4% from the level of sales in June, and were 32.4% lower than July of 2009. This report, which was much worse than most economists expected, followed a report by the National Association of Realtors the day before that sales of existing homes in July fell 27.2% from June, and were 25.5% lower than a year earlier.
