Average weekly wages for workers went up 3.8% over the last year. Subtracting inflation, the “real” or purchasing power of wages went up 0.8% over the last year according to another report of the Department of labor on Real Wages.

But the CPI does not include two important payments made by consumers. The first is interest payments, which have mainly gone up because of the Federal Reserve, the U.S. central bank, which raises interest rates to try to slow the economy and lower inflation. Mortgage interest rates are near 7% and are the highest in more than 20 years. Credit cards now charge more than 20% in interest on unpaid balances, which is the highest level in more than 30 years.

Adding back higher interest costs, for both consumer loans (student loans, credit cards and auto loans mainly) as well as mortgages, would increase the inflation rate by about 0.7% over the course of the year. This is not much, but enough to offset out the 0.8% gain in real wages.

The second omission is that the CPI does not include insurance costs for homeowners. The CPI estimates the equivalent rent for a house, but this does not include rapidly rising home insurance costs. These costs would add about 0.8% to inflation over the last year, mean that purchasing power for the average household in the United States has actually gone down by about 0.7%. This is only an average, so many would be much worse off, while some would be better off. No wonder surveys show so many people are sour on the economy.

#SanJoseCA #inflation #economy #capitalism

San Francisco, CA – On November 11, close to 900 people gathered at San Francisco State University for a counter-summit against the upcoming Asia-Pacific Economic Cooperation (APEC) Summit later that week.

The day was convened by the “No To APEC Coalition,” which had 160 endorsing organizations. The counter-summit was the first action leading up to a week of activity against APEC.

APEC is an inter-governmental forum for 21 member economies in the Pacific Rim that promotes free trade throughout the Asia-Pacific region. While the rhetoric that APEC pushes seem to benefit the member economies, the No to APEC Coalition states that it’s a forum for corporations and institutions to push so-called “free trade” to exploit their workers and put the benefits of corporations over the rights of nations and peoples.

The day began at 9 a.m. with opening remarks that reviewed what APEC and IPEF (Indo-Pacific Economic Framework for Prosperity) were, and why it’s important to mobilize against them.

The keynote speaker was Brandon Lee, who came out to a standing ovation and chants of “Justice for Brandon Lee!” Lee is an indigenous rights activist who in 2019 was shot in four places by the 54th Infantry Battalion of the Armed Forces of the Philippines, rendering him paralyzed. Lee continues to organize for human rights and is a member of the San Francisco Committee for Human Rights in the Philippines.

During his keynote speech, he spoke about how he became an organizer, and the current fight against Chevron. He also joined the chorus to mobilize against APEC and IPEF, “I will continue to fight as long as I breathe. My story is one of many. There are 1000 people here today, diverse and multi-generational, each with their own journey, all united against APEC. And we will not go gently into the night. We will rage!”

After Lee’s speech there was a plenary with speakers from different movements, including organizers from Palestine, Starbucks Workers United, Myanmar, and others.

The afternoon saw two sets of dozens of workshops for people to choose from.

The evening ended with a call to action for November 12 and the march against APEC. It closed out with agitating speeches, that fired people up!

#SanFranciscoCA #NoToAPEC #APEC #Capitalism #Economy #ILPS

The Asia Pacific Economic Cooperation (APEC) Forum will be meeting in San Francisco and progressives need to be there on Saturday, November 11 and Sunday, November 12.

Freedom Road Socialist Organization opposes APEC as a tool of imperialist exploitation, and stands in solidarity with those planning to protest this meeting, such as the People's Counter-Summit being organized by the No to APEC Coalition.

APEC is a forum in which governments and big corporations collude and contend with each other to exploit the workers and oppressed peoples of the Asia-Pacific region. It is a part of the imperialist strategy of neoliberalism, which seeks to deregulate trade, privatize services, increase the exploitation of the oppressed nations, and advance the agenda of big corporations.

APEC exists for the same reasons as the World Trade Organization (WTO), the Indo-Pacific Economic Framework (IPEF), and the United States-Mexico-Canda Agreement (USMCA, known informally as “NAFTA 2.0”): to maximize profits at the expense of working and oppressed peoples.

Freedom Road Socialist Organization stands for a world free of capitalist domination. Institutions like APEC are notorious for meddling in the internal affairs of nations, offering economic ties or “development” loans on the condition of doing away with labor regulations, privatizing public services, or getting rid of tariffs. The U.S. has the most influence within APEC, and its chairperson is Joe Biden. In addition, the U.S. has launched the Indo-Pacific Economic Framework (IPEF), which excludes People’s China, and seeks to limit Beijing’s growing influence.

Wherever the big corporations and their political representatives gather to plot and scheme how to better exploit the workers and oppressed peoples of the world, the people's movements should be in the streets to denounce and expose them. Let’s make them feel our strength in San Francisco November 11 and 12.

No to APEC!

#FRSO #Statement #APEC #Capitalism #Economy

In 2023, there have been many announcements of layoffs by technology firms. This is a result of what the media calls post-COVID normalization. But this “normalization” has also shown that many technology companies that boomed during the pandemic were in fact overproducing and building new capacity too quickly, forcing them now to scale back. In the past ten days this slowdown in the technology industry spilled over into the banking system, triggered by the failure of Silicon Valley Bank, based in Santa Clara, California. Soon after the failure of SVB on Friday, March 10, regulators shut Signature Bank in New York. First Republic bank, headquartered in San Francisco, had to borrow $30 billion from other banks, under the direction of the Federal Reserve. The crisis even spilled overseas, as the troubled Swiss banking giant Credit Suisse was forced to sell itself to the even larger Swiss bank UBS. Fight Back! News sat down with Professor Suzuki to ask him about this crisis. Fight Back!: How is the failure of Silicon Valley Bank related the crisis unfolding in the technology industry?

Masao Suzuki: Because of the slowdown in Silicon Valley, many SVB’s depositors began to pull more and more of their deposit money out because revenue and new capital was not coming in fast enough. To meet their depositors’ demand for their money, SVB had to sell many U.S. government bonds that they had bought with their depositors’ money.

Buying U.S. government bonds is widely seen as safe, as there was almost no risk that the U.S. government would default on this debt. It would seem that this was a very good way to balance against the risk of loans that SVB made to technology startups.

One the failures of the bank and its leadership was that they did not take into account the interest rate risks of the bonds that the bank owned. This risk to owning bonds is that if interest rates go up, the price of the bonds go down, since they pay a fixed interest payment, or coupon. With the Federal Reserve raising interest rates to slow the economy to fight inflation, the market price of these U.S. government bonds began to fall. This wouldn’t matter if SVB was able to hold the bonds until they matured, and the U.S. government paid off their full face value.

The bonds that Silicon Valley Bank had to sell to pay off their depositors were sold at lower prices, causing billions of dollars of losses. When SVB made plans to raise more capital to offset these losses by selling stock, depositors panicked, and California regulators shut down the bank on Friday morning, March 10.

Fight Back!: Were there other reasons that contributed to the failure of Silicon Valley Bank?

Suzuki: One other important reason was rolling back the regulation of bigger banks. Following the 2008 financial crisis, the Dodd-Frank law was passed, increasing regulation of larger banks with at least $50 billion in assets, among other things. But in 2018 Dodd-Frank was weakened under the Trump administration, to raise the limit for greater regulation to $250 billion.

Silicon Valley Bank grew quickly to more than $50 billion in assets in 2017. Facing increasing regulation, the CEO of SVB, along with other banks, lobbied to weaken Dodd Frank, and those reforms passed into law in 2018. By 2023, just before it failed, SVB had grown to more than $200 billion in assets, and yet still had lighter regulation like much smaller banks.

Fight Back!: Was that the only other factor?

Suzuki: A third factor is that depositors pulled their money out at a much faster rate than in the past. The last time a bigger bank failed, Washington Mutual in 2008, it took a week for depositors to pull out 10% of its deposits. This gave regulators time to find a buyer – J.P. Morgan Chase – and allowed them to shut the bank over a weekend.

With Silicon Valley Bank, depositors tried to withdraw an amount equal to 25% of total deposits in one day, Thursday, March 9. This was because more than 90% of SVB’s deposits were large, with more than the $250,000 in deposits that are insured. Facing possible large losses, depositors tried to pull tens of billions of dollars. Electronic banking made this even faster.

Fight Back!: Will the deposits of working people be at risk?

Suzuki: Bank deposits are insured by the Federal Deposit Insurance Corporation or FDIC. The banks pay insurance premiums to the FDIC that provide the money to cover deposits at failed banks. I doubt many readers of Fight Back! have more than $250,000 in a checking or savings account at a single bank. But if you do, it would be safest to move your money to separate banks so you have no more than the insured limit at any single bank.

Because the failure of Silicon Valley Bank was quickly followed by the failure of Signature Bank in New York, the FDIC said that it would cover all the deposits of the failed banks, in an effort to stop the banking crisis spreading any further. The Federal Reserve also created a special program to lend to banks and twisted the arms of some big banks to lend up to $30 billion to First Republic Bank. First Republic, based in San Francisco, was just slightly smaller than Silicon Valley Bank, and also had a large number of uninsured deposits, like SVB.

While the Biden administration and others continue to stress that the banking system is “fundamentally sound,” the fact the government continues to provide aid to other banks says otherwise.

#SanJoseCA #Capitalism #economy #economics