San José, CA – Today, Oct. 15, right-wing Republicans in the House of Representatives stopped the House Republican leadership from trying to pass a compromise measure to re-open the federal government and raise its debt ceiling. This marks another step towards the first U.S. debt crisis in history.

On Oct. 17, the federal government will not be able to borrow more money to pay its bills. The federal government will only be able to pay out what it collects in taxes, plus about $30 billion in cash that it has on hand. In the two weeks after that, the federal government will run short of money to pay all its bills, with the most likely date being Nov. 1, when $55 billion in Social Security benefits, Medicare payments, and military pay, benefits and retirement benefits are due.

From now through mid-November, the federal government will have to postpone payment on about $100 billion in payments if the debt ceiling is not raised. This comes to almost 8% of Gross Domestic Product (GDP, the standard measure of the size of the economy based on production of goods and services) on an annual basis, enough to throw the economy in a recession even worse than the one following the financial crisis in 2008.

Background to the crisis

The looming debt crisis has several roots. The first are the budget deficits of the federal government, where it spends more than it collects in taxes, so it has to borrow the difference by selling bonds. The federal government budget deficit ballooned to about $1.4 trillion (or $1400 billion), equal to 10% of GDP, in 2009 because the deep recession lowered tax revenues and the federal government increased spending to bail out Wall Street and stimulate the economy. Since then, a combination of higher tax revenues, spending cuts and economic growth have reduced the deficit to almost $600 billion, or about 4% of GDP in 2012, a decline of 60% in relation to the size of the economy.

The total amount of bonds that the U.S. government sells to pay for the budget deficit is the public debt, which is now $16.75 trillion ($16,750 billion). The federal government has a self-imposed limit on the public debt of $16.7 trillion, which means that the government can no longer borrow more money. The reported debt is slightly higher than the limit because the federal government has been shifting money around to avoid running out of cash for the last five months.

While there have been disputes over the debt ceiling in the past, they have been largely partisan affairs that did not come close to forcing the government to actually delay payment. But the recent rise of Tea Party Republicans means that the Republicans, especially in the House of Representatives, are controlled by right wingers who are more than willing to shut down the government and even force the government not to pay its bills in order to achieve their goal of ending Obama’s health care reform known as Obamacare.

What drives the Tea Party

Many Republican members of congress were denying the possibility of a partial shutdown of the federal government right up to the point that the government shut down. Their behavior is similar to their stance on climate change – just deny that it is happening so one doesn’t have to do anything.

Digging a little deeper, one sees that the government agencies that were most affected by the shutdown, such as the Department of Education, Housing and Urban Development (HUD), the Environmental Protection Agency (EPA) and the Department of Labor, are the programs most hated by the right wing.

There is also an extreme free-market logic among Tea Party Republicans that the government is bad for business and the economy and that a shutdown of the government will be good for business.

What is likely to happen

The world isn’t going to end on Oct. 17 if the debt ceiling is not raised. But the economic effects are already being felt, as the uncertainty of repayment of bonds after that date is causing the prices of bonds coming due soon to fall, which leads to higher interest rates. The interest rate on the shortest term U.S. bonds (called bills), which come due in 30 days, has now tripled and is higher than the interest rates on 60-day bills, which come due later.

While Democrats and the Obama administration are warning of the danger of default, which is what happens when the federal government does not repay its bonds or interest payment, it is hard to see how the government won’t give Wall Street what it wants. But there is chance that some bank or financial institution will find itself in a squeeze if the federal government doesn’t pay on time, triggering another financial crisis.

What is more likely is that the sudden drop in federal government spending will trigger a new recession. This could quickly feed upon itself in what economists call the ‘multiplier effect,’ where the individuals, businesses and institutions that aren’t being paid by the federal government then cut back their own purchases and payments, putting the economy into a downward spiral.

What a debt crisis would mean

If the House Republicans do manage to block any agreement to reopen the government and raise the debt ceiling, the self-inflicted crisis will mark another step in the decline of the U.S. as a world power. Ever since World War II, the U.S. government has been both a protector of Wall Street and big business and the head of worldwide empire of pro-U.S. governments that protect U.S. financial and business interests, backed by the U.S. military.

From an economic point of view, the end in 1971 of the post-World War II system of fixed exchange rates centered on the U.S. dollar, called Bretton Woods, was an early sign of the decline of the U.S. relative to the rising nations of Europe and Japan. This was followed by the OPEC oil boycott in 1973, and then the U.S. military defeat in Vietnam in 1975, showing the rise of the Third World.

Today the withdrawal of U.S. troops from Iraq and coming U.S. withdrawal from Afghanistan shows that the U.S., despite using hundreds of thousands of troops and spending trillions of dollars, is no longer to set up stable, pro-U.S. governments that can defend U.S. business interests. With the looming debt crisis, more and more governments around the world are losing faith in the economic power of the U.S. and the safety of U.S. government bonds. Foreign governments and investors now own more than $5.5 trillion of U.S. government bonds, and any sell-off in the bond market triggered by a debt crisis would quickly spread a financial crisis around the world.

But even if a financial crisis is avoided, a deep recession in the U.S. will also spread around the world. Europe’s economy is still in a depression with the euro-zone crisis and many economies in the Third World are slowing down already. Another worldwide recession, following so closely on the 2008-2009 so-called Great Depression, could again shake the very foundations of the world capitalist economy.

#SanJoséCA #capitalistCrisis #recession #RepublicanAgenda #TeaParty #governmentShutdown #DebtCeiling

May Day began in the U.S. On May 1, 1886, workers held massive rallies across the country demanding an eight-hour workday. In Chicago, the site of the biggest protests, police attacked striking workers, May 4, in Haymarket Square. The bosses, politicians and courts, using anti-immigrant and red scare tactics, framed eight strike leaders and executed four of them on bogus charges. This was the start of May 1 as a day of workers’ protest.

In recent times, the immigrant rights mega-marches of 2006 reignited May Day. This historic series of marches – from Los Angeles, to Chicago, to New York – drew millions of Chicano, Mexicano and Central American protesters into the streets to fight for full legalization. Just last year, tens of thousands joined together around the country for immigrant rights marches, and with unions as a part of the upsurge around Occupy Wall Street.

This year, activists and organizers will mark May Day by advancing the struggle for legalization and full equality for the undocumented. The fight for immigrant rights is once again at the forefront. While President Barack Obama and other politicians propose weak legislation that would help big business while actually hurting many undocumented immigrants, immigrant rights activists raise the demand, “Legalization for all.” For their part, Republican politicians call for more repressive barriers. We oppose further militarization and death at the border. We oppose new guest worker programs seeking to super-exploit immigrant labor. We oppose the brutal raids on and breaking up of immigrant families by Immigration and Customs Enforcement (ICE).

This May Day, workers in the U.S. are resisting cutbacks to public services and attacks on their wages, pensions and rights. The wave of Republican legislators swept into office in 2010 by the Tea Party set a new wave of anti-worker attacks in motion. Wisconsin union members lost a sharp struggle against far-right Governor Scott Walker. Workers and unions in many states took it on the chin, though Ohio unions won. Significantly, the strike by the Chicago Teachers Union set a good example of what to do in the face of attacks from Democratic Party big wigs. Working people are more and more fighting back against the push for austerity by the rich. This summer, Teamsters at UPS nationally are gearing up for a major contract battle to preserve health care plans and win raises for part-time workers. Those who fight can win.

Also this past year African Americans and their allies boldly confronted a spike in racist terrorism and police brutality. The racist murder of Trayvon Martin, the 17-year-old African American youth, provoked outrage. In Sanford, Florida and other parts of the country, thousands marched to demand the racist vigilante Zimmerman to go to prison. More recently in Brooklyn, 16-year-old African American student Kimani Gray was shot to death by the New York police department. This police murder sparked militant protests. Racist terrorism by vigilantes like Zimmerman and by the police is an inherent part of the national oppression of Black, Chicano and other oppressed nationalities. The movement to end this oppression is rising. FRSO has always supported the right to self-determination for the Black Belt nation in the South and for the Chicano nation in the Southwest.

On May Day, we should reaffirm our commitment to fight for our democratic rights. The U.S. government has unleashed serious attacks on Arabs and Muslims. In 2010, the FBI carried out raids directed against anti-war and international solidarity activists, including members of the FRSO. We must be prepared to respond to new attacks, while speaking out in defense of the right to organize.

May Day provides an opportunity to talk with fellow workers about unity with workers and nations oppressed by U.S. wars and imperialism, to urge the end to U.S. war in Afghanistan, to stop murderous U.S. drone strikes, to oppose U.S. and NATO military intervention and threats upon sovereign countries like Syria, Iran and People’s Korea, and to oppose U.S. military adventures in Africa, Latin America and Asia. May Day reminds us of the need for a militant anti-war movement that stands in solidarity with our sisters and brothers in oppressed nations. When they strike a blow against imperialism in their countries, they strike a blow against the same bankers, corporations and rich elites that rip us off and exploit and oppress us here in the U.S.

May Day is also an important time to celebrate the accomplishments of the socialist countries – Cuba, China, Vietnam, Laos and Democratic Korea – where the working class holds political and economic power.

The Freedom Road Socialist Organization believes that a better world for working people is possible, but it can only be won through a determined struggle.

Workers and oppressed people wage that struggle in their workplaces, in their communities and ultimately in the streets. The continued misery inflicted on workers by economic crisis and non-stop U.S. wars and occupations makes the importance of May Day abundantly clear. Workers have sparked a fire through the mass struggles of the past three years, and the fire rises into May 1, 2013 and beyond.

#UnitedStates #Socialism #OppressedNationalities #MayDay #capitalistCrisis #FreedomRoadSocialistOrganization #workersRights #antiimperialism

Los trabajos han desaparecido y no hay señales de que van a regresar. Hay más de 5 millones de desempleados que han estado fuera de la fuerza laboral por más de seis meses. Alrededor de 2.5 millones de ellos están recibiendo beneficios extendidos por el gobierno federal y podrían ser cortados en el 2013. La mayoría han agotado sus beneficios. Demandamos que el gobierno extienda y expanda los beneficios para los desempleados.

Y si no fuera suficiente, una gran cantidad de políticos de derecha están tratando de satanizar a las personas quienes están desempleados por la falta de trabajos. Así que toman en cuenta la opinión de los opositores y proponen exámenes antidrogas para (pedir) beneficios del desempleo. Ellos dicen que los que están desempleados son flojos y son una “carga” para la economía. Y luego proponen nuevos descuentos tributarios para los ricos.

Así están las cosas. Actualmente hay 4 millones menos de trabajo comparado con el 2007 cuando se declaro la crisis económica. Al actual crecimiento laboral – el cual es mínimo- tomara alrededor de cuatro años más para recuperar esos trabajos perdidos. Y eso es si no hay otra baja económica o una crisis capitalista. Por las indicaciones, estamos en época de altas tazas de desempleo.

Encima de esto, por la discriminación en contra de las nacionalidades oprimidas – afro-americanos, chicanos / latinos, y los nativos americanos – las tazas en estas comunidades son mas altas. No un poco, mucho más altas. Por ejemplo la taza de desempleo para los afro-americanos es el doble que la de los blancos.

No hay suficientes empleos para los trabajadores que los quieren y los necesitan. Esto no tiene nada que ver con ser flojo, o el nivel de educación o entrenamiento en este caso. Es verdad que hay más oportunidades de trabajo para cualquiera. Más también es verdad que más educación y entrenamiento laboral no cambian el número total de gente desempleada. Y es por esa razón que hay cantidad de graduados universitarios y trabajadores especializados en las filas de los sin trabajo.

Ese uno-por-ciento en el Congreso quieren hacerle la vida mas dura a los desempleados. Al comienzo del próximo año, 2013, se terminara la ayuda federal de Compensación de desempleo extendida (EUC por sus siglas en ingles). Quiere decir, que la única compensación de desempleo será proveída por los gobiernos estatales. Esto significa típicamente ayuda por solo 26 semanas. Especialmente lo que esta pasando en Washington DC, el inacabable consentir a esa clase incumplida que gusta llamarse “los creadores de empleos”.

La presión debe ser puesta en los políticos para preservar la ayuda federal de Compensación de desempleo extendida (EUC). Y necesita haber un debate político ahora. No solo se necesita extender la compensación de desempleo, se debe expander para durar más tiempo e incluir más gente. Si no hay trabajos, los beneficios de desempleo deben durar lo que tome el traer nuevos trabajos y para que la gente los ocupe. Los trabajadores indocumentados quienes están de baja deben de ser elegibles. Es contraria a la noción de justicia e igualdad que una fábrica pueda ser cerrada y tienen trabajadores con cinco, diez o más años de antigüedad, quienes pagan impuestos – quienes no pueden obtener beneficios de desempleo como otros trabajadores.

La única razón por la cual la compensación de desempleo existe es porque la clase trabajadora lucho por ello. Mientras la crisis económica de los 1930 se ahondaba, cientos de miles de trabajadores, organizados mayormente por comunistas, crearon dramáticas demostraciones en las calles de ciudades y pueblos de los E.U. demandando “salarios laborales” y seguro de desempleo para los desempleados. En este tiempo necesitamos el mismo empeño para luchar y ganar. El 1% junto con sus políticos comprados y pagados no nos van a dar nada si no estamos organizados para tomarlo.

¡Trabajos ahora o salarios ahora!

¡Defiende y expande el seguro del desempleo!

#UnitedStates #Unemployment #capitalistCrisis #FederalUnemploymentBenefits

For the last two years the mainstream media has been painting a picture of the economic crisis in the euro-zone as one of governments spending too much on social welfare programs, leading to large budget deficits and debt. This reflects a right-wing, free market view that crises of overproduction under capitalism are because of ‘too much government intervention’ in the economy. The poster-child for this story has been Greece, whose large government budget deficit of about 15% of Greek GDP (total production of goods and services) and large government debt (which went as high as 160% of Greek GDP), triggered the crisis in 2010. In response, the big capitalists and their politicians called for more and more austerity in the form of tax increases, spending cuts and reduction in workers’ pensions and employment protection.

But Spain, whose economy is much larger than Greece’s, and which actually has a higher unemployment rate than Greece, is now the new center of the crisis. Spain has just had to take a 100 billion euro ($125 billion) bailout of its banks by the euro-zone. But Spain actually had government budget surpluses during the last economic expansion (2001-2007) so that its tax revenues were greater than government spending. In contrast, Germany, which is often portrayed as being ‘thrifty,’ also had government budget deficits (albeit about half the size of Greece’s). Spain also had one of the lowest levels of total government debt before the last recession and still had a government debt level lower than Germany, until it took out the bank bailout loan.

What Greece and Spain (along with Portugal and Ireland which have also had to impose austerity in exchange for more loans), had in common is that they all had large inflows of capital from Germany and other northern European countries. When the recession (or in a growing number of countries, depression) and financial crisis that began in the U.S. hit, these capital flows dried up. Thus the current euro-zone crisis is very similar to the 1997 Asian economic crisis, which also resulted from a boom and then bust in capital flows and led to a severe crisis of overproduction that spread to Russia and Latin America.

These booms and bust caused by international flows of capital are not accidents; rather they are a fact of life under modern monopoly capitalism. About 100 years ago, the Russian revolutionary V.I. Lenin pointed out that the concentration and centralization of capital led to a handful of huge corporations dominating industry after industry. Lenin called this monopoly capitalism to differentiate it from the more competitive capitalism of Marx’s time, where most capitalist firms were relatively small.

One of the features of monopoly capitalism pointed out by Lenin was that the export of capital, which is movement of money across borders, became more important than international trade, or the movement of goods and services between countries. Today capital flows, for both investment and speculative reasons, far exceed the value of trade. In 2010, world trade averaged about $75 billion per day. In contrast, the foreign exchange market, which trades money for trade, investment and speculation, averaged a whopping $4 trillion per day, or 50 times larger than the trade of goods and services.

While free market apologists for monopoly capitalism claim that these huge flows of speculative capital actually make capitalism more stable, the fact is that these flows can be the trigger for worldwide economic crises of overproduction. These huge international flows of capital go hand-in-hand with the growth of the financial sector, another characteristic of monopoly capitalism described by Lenin in his work Imperialism: The Highest Stage of Capitalism.

Some countries with capitalist economies, such as Malaysia during the 1997 economic crisis, turned away from free-market fantasies and introduced controls on capital flows. While free-market economists predicted disaster, these controls actually helped Malaysia’s economy to weather the storm.

But while controls on capital, like other Keynesian government policies such as government deficit spending, can help reduce the damage of an economic crisis, they do not prevent such crises. The more that such controls help limit the damage of crises, the more the capitalists want to reduce the government’s role in the economy to free big corporations and big banks to make the most profits. This is the policy of deregulation, imposed by politicians bought and paid for by the 1% for the last 30 years.

Only with a socialist economy can a country distance itself from the global monopoly capitalist financial whirlpool that is leading to one economic disaster to another. A socialist economy is one where the production is for people’s needs and not for profit and ownership is not concentrated in the hands of the wealthy 1% but instead collectively owned by the people.

#Europe #CapitalismAndEconomy #Ireland #capitalistCrisis #Greece #monopolyCapitalism #Spain #Portugal

San José, CA – On June 9, Spain and the European Union made an agreement to bail out Spain’s troubled banking sector. This agreement means Spain is the fourth country (along with Portugal, Ireland and Greece) in the eurozone to have to take a bailout.

The agreement will provide up to 100 billion euros ($125 billion) in loans to Spain’s bank bail-out fund, the FROB (Fund for Orderly Bank Restructuring). The agreement with the European Union was triggered by Spain’s third largest bank, Bankia SA, which needed a 19 billion Euro ($24 billion) bailout. But the FROB had only 9 billion euros, after three earlier rounds of bailouts of Spanish banks. The Spanish government, which would normally sell bonds to borrow money to bail out banks, was having a harder and harder time selling its own bonds.

Spain’s banks have billions of euros of bad real estate loans because of the boom and bust in the Spanish housing market. Spain’s housing boom was almost twice as large as the one in the United States, with construction spending accounting for about 10% of Spain’s Gross Domestic Product (GDP, the total spending on goods and service made in Spain), vs. 6% in the U.S.

Here in the U.S., big businesses have been able to bounce back from the financial crisis caused by the boom and bust in U.S. housing. This was aided by the U.S. central bank, the Federal Reserve, which printed some $2 trillion in money to buy financial assets, while the U.S. government spent another $800 billion on a bank bailout.

But Spain does not have the power to print money since it adopted the euro; rather this power lies with the European Central Bank or ECB. Spain’s government is also limited in its ability to borrow and spend money since its government bonds are not backed by the ECB.

As a result, while unemployment in the U.S. peaked at 10% and has since dropped to almost 8%, the unemployment rate in Spain has increased to almost 25% and is still rising. Over half the young people in Spain do not have jobs.

Spain actually had a small federal government budget surplus during its housing boom (with tax revenues greater than spending by 0.3% of GDP from 2000-2007). However the government budget deficit swelled to 12% of Spanish GDP in the aftermath of the 2008 financial crisis and deep recession in Europe that went hand-in-hand with Spain’s housing bust.

The Spanish government, first led by the social-democratic Spanish Socialist Workers Party (PSOE), and now by the conservative People’s Party, has instituted deep spending cuts and tax increases that have reduced the budget deficit from 12% to 9% of Spanish GDP. But this austerity has also led Spain into another deep recession, even before it had recovered from the 2008-2009 economic downturn.

These back-to-back recessions have dragged down the Spanish housing market, leading to even more losses at Spanish banks, which made a lot of loans during the boom times. Then in December of 2011, and again in February of this year, the European Central Bank made one trillion Euros (about $1.3 trillion) of long-term (three year) loans to Spanish and other European banks. But Spanish banks have already burned through almost all of this money in order to pay depositors withdrawing their money, and the rest, almost 40%, going to buy Spanish government bonds.

As the Spanish government had a harder time borrowing, the price of Spanish government bonds fell, causing even more losses among Spanish banks. Thus there is a need for another round of bank bailouts, to be paid for by the 100 billion euro E.U. loan.

While the bailout does put off an immediate Spanish banking crisis, it adds more European supervision to Spanish banks. This could worsen the Spanish depression if Spanish banks are forced to limit loans or even shut down to make the remaining banks more profitable. Spain’s unemployment rate is already close to 25%, the highest in the Euro-zone, and even higher than Greece’s unemployment rate. Industrial production (the goods produced by factories, mines, and refineries) in Spain has fallen 8.3% over the past year.

While the Spanish bailout does not have the severe austerity measures of tax increases and government spending cuts that have been imposed on the Greek, Irish and Portuguese people, it will make it harder for the Spanish government to borrow in the future. The EU bailout loan will be ‘senior’ to other Spanish government debts, meaning that the EU must be paid back before other owners of Spanish government bonds. This will make it harder for the Spanish government to sell bonds in the future.

On June 11, prices for Spanish bonds fell and their interest rate rose to more than 6.4% on a ten-year bond (in contrast, U.S. government ten-year bonds had an interest rate of only 1.6% on June 11). This increases the odds that the Spanish government itself may need a bailout or end up being forced out of the eurozone.

#SanJoséCA #Unemployment #Depression #Europe #capitalistCrisis #bankBailout #EuropeanUnion #Spain

St. Paul, MN – Frente a una pancarta que dice, “Rescate del pueblo pobre y trabajador – No a los billonarios!” las líderezas del Comité por el Derecho de Asistencia Pública anunciaron una campaña para combatir el impacto de la creciente crisis económica en una conferencia de prensa el 29 de octubre. Acompañándolos en la actividad se hicieron presentes miembros del sindicato de oficinistas AFSCME 3800, el Comité Anti-guerra, Mujeres en Contra de la Militarización y otros grupos que luchan por la paz y la justicia.

Tasha Jackson, miembro del Comité por los Derechos de la Asistencia Pública explicó, “Hoy, el 29 de octubre, es el aniversario del derrumbe de Wall Street en el año 1929 – o sea, el comienzo de la Gran Depresión. Estamos aquí en el Capitolio de Minnesota, como gente pobre y trabajadora, exigiendo que el Gobernador Pawlenty y los políticos estatales enfrenten la crisis que está pasando ahora y afecta a nuestras familias en Minnesota.”

Minnesota tiene un déficit presupuestario de casi mil millones de dólares. Observadores creen que la crisis financiaria crecerá en los meses que vienen. En el pasado el estado de Minnesota ha intentado hacer que la gente de bajos ingresos y la clase trabajadora paguen la crisis.

Angel Buechner anunció, “El Comité por los Derechos del Asistencia está iniciando y liderando un esfuerzo para avanzar la agenda del pueblo de Minnesota. Llamaremos a una moratoria a las reposiciones de casas, una extensión de los beneficios del desempleo, una moratoria del límite de tiempo de los programas de asistencia publica, un paro a los despidos temporales y otras iniciativas. Llevaremos nuestro mensaje al pueblo de Minnesota y nuestras demandas a Pawlenty y a los políticos de este estado. Uniremos a gente pobre y trabajadora para exigir que los políticos hagan que los ricos paguen la crisis y que no corten los programas que el pueblo pobre y trabajador necesitamos para vivir.”

#StPaulMN #PoorPeoplesMovements #Labor #News #MinnesotaCoalitionForAPeoplesBailout #BudgetCrisis #capitalistCrisis

Los republicanos sostienen que es necesario efectuar dichas medidas para reducir el déficit en el presupuesto del gobierno federal, el cual se calcula en unos $400 billones en este año. Sin embargo, la reducción a los impuestos de los ricos disminuiría los ingresos al presupuesto en casi el doble de lo que el recorte en los gastos sociales le ahorraría al gobierno. El ala derechista espera que al aumentar el déficit presupuestario, aumenten también los recortes a los programas sociales en un futuro.

Esta propuesta le permite a los estados cobrar cuotas aun más altas por los servicios de “Medicaid” y a la vez recortar los servicios que ofrece a los beneficiarios. El congresista republicano de Texas, Joe Barton, ha afirmado que los pobres deben pagar más por los servicios de salud para que así “se hagan responsables”. Los recortes al Medicaid no solo afectan injustamente a los pobres, sino que también contribuirán al aumento en el costo de los servicios de salud para los trabajadores. Se espera un aumento en el numero de personas que no cuentan con seguro medico, debido a los recortes al “Medicaid” y a que las empresas continúan recortando prestaciones como el seguro medico de los trabajadores. Los hospitales de los condados tendrán que hacer frente a dichos costos, con lo cual aumentara a su vez el costo del seguro medico.

En cuanto a la ayuda financiera para el estudiante, la propuesta establecería un incremento en las tasas de interés a los préstamos para estudiantes, lo cual afectaría a la clase trabajadora. A lo largo del país, los estudiantes han tenido que incurrir en mayores deudas para poder pagar los aumentos en el costo de las universidades públicas. Cada vez aumenta más el número de alumnos universitarios que al término de sus estudios tienen miles de dólares en deudas.

En el pasado existía una demanda de graduados universitarios para trabajar en las grandes corporaciones; ahora mas bien los empleos calificados (como los relacionados con la alta tecnología) son enviados al exterior donde le pagan al trabajador la sexta o décima parte de lo que se le pagaría en los Estados Unidos por salario y prestaciones.

Las familias de bajos recursos tendrán que reunir requisitos aun mas estrictos par obtener los beneficios de “TANF”, por lo cual será mas difícil para los padres de familia asistir a la escuela para obtener mejores trabajos en el futuro, obligándolos a trabajar en cualquier trabajo mal pagado que este a la mano. Asimismo, la propuesta recorta los fondos de ayuda para los niños (“Child Support”) así como el SSI que ayuda a los discapacitados y a las personas mayores.

La reducción a los impuestos aprobada por los republicanos en la Cámara de Representantes extendería por dos años mas una medida ya aprobada por el presidente Bush – vigente hasta el 2009 – que reduce los impuestos a las ganancias obtenidas en la bolsa de valores o por medio de capital y otros negocios. Al presidente Bush le gustaría reducir de manera permanente dichos impuestos para así seguir beneficiando al 1% de la población, los más ricos, que ya de por si tienen en sus manos la gran parte de las acciones de la bolsa.

Gracias a la oposición popular, a la movilización de grandes sectores de la clase media como la “AARP” (Asociación Americana de Pensionados) y a la oposición de los demócratas, fue posible aplastar el plan del presidente Bush y de los republicanos de privatizar el seguro social. Sin embargo, es necesario continuar la lucha en contra de estas medidas propuestas por los republicanos. Los sindicatos de trabajadores, las organizaciones comunitarias en favor de los oprimidos, así como las asociaciones estudiantiles deberán movilizarse en contra de los republicanos y su guerra contra el pobre y la clase trabajadora.

#SanJoséCA #Analysis #BudgetCuts #capitalistCrisis

Raleigh, NC – “We’re in the middle of an historic crisis,” the president of the North Carolina Public Sector Workers Union (UE 150), Angaza Laughinghouse, told Fight Back!. “It requires a historic response from unions, youth groups, faith groups and community organizations to develop the fight back.”

That sentiment is what brought an important mobilization of over 160 community, labor, faith, and political organizations to the state capital on June 15. 300 workers and community members gathered after work to rally on Jones Street before marching into the North Carolina General Assembly to talk to legislators about the budget cuts.

The message, says Jeff Shaw from the North Carolina Justice Center, is simple: “We cannot balance the budget on the backs of the poor. Low-income and minority communities suffer the most in an economic crisis. And budget cuts in times like this will only make things worse.”

“Morally and economically,” Shaw added, “the right thing to do is invest in our community.”

Reverend Barber, the president of North Carolina’s NAACP, agreed. In a powerful speech at the rally, Barber emphasized, “We need to move from talking about tax cuts and tax raises, to a discussion about investing in children, care for the sick, protecting the mentally ill and supporting workers.”

The rally was organized by Together NC and the Historic Thousands on Jones St (HKonJ) Network, two coalitions that are uniting a broad spectrum of organizations, communities and social classes to oppose the budget cuts that will impact workers and oppressed nationalities. North Carolina currently faces a $4.6 billion budget shortfall. Instead of taxing corporations and the wealthy to raise additional revenue, the House is cutting funding from social services and laying off workers.

Public sector workers face layoffs, pay cuts and furloughs. Insurance premiums are going up and some workers are losing their 401k and pension contributions. In addition, the university system’s budget is being cut by 11%. The Department of Health and Human Services is slated for 465 layoffs under the current budget.

Angaza Laughinghouse emphasized that the way out is for workers to organize their communities to raise pressure on the legislators, with a strong message: “We need to tax corporations and the wealthy and make a budget for working people.”

In the coming weeks, organizers with Together NC and HKonJ will be holding town hall meetings around the state and engaging in communities to gather input on the budget process. Organizers are excited with the turnout and enthusiasm among the participants of June 15’s rally and will continue to struggle for a budget – and a budget process – that serves the majority of North Carolina’s people, not the wealthy and the corporations.

#RaleighNC #CapitalismAndEconomy #News #BudgetCrisis #capitalistCrisis

Minneapolis, MN – “You got bailed out, we got sold out! Stop foreclosures now!” was the rallying call during a protest here June 13 as a crowd of 75 people surged to the doors of a US Bank branch on Lake Street. Minneapolis police officers blocked the doors of the bank building, calling in more squad cars, which arrived with sirens blaring.

The protest and march was organized by the Minnesota Coalition for a People’s Bailout. It called on banks and mortgage companies to stop forecloses and the displacement of homeowners and to stop evicting tenants from rental properties that have been foreclosed upon.

In response to breaking news, the march first went to a branch of Wells Fargo Bank, in solidarity with the workers of Quad City Die Casting. Wells Fargo has pulled the financing of the Moline, Illinois based company and workers are waging a powerful fight to keep the plant open. The Moline workers sent a statement to the protest, which read in part, “Wells Fargo received $25 billion in taxpayer money, supposedly to keep the economy going. Instead, they’ve pocketed that money for executive bonuses and are closing down factories like ours and throwing thousands of workers into the street. It’s time we said enough is enough.”

The march then proceeded east on Lake Street to US Bank, in company with appreciative honks and shouts from cars and passersby. US Bank has received $6.6 billion in TARP, the federal bank bailout, yet it continues to foreclose and evict local families.

Deb Konechne, of the Welfare Rights Committee, a member group of the Minnesota Coalition for a People’s Bailout, spoke for the Coalition: “The bailout money would have been much better spent going directly to the families in need – to keep people in their homes – instead of to the financial institutions whose only motivation is their own profit. U.S. Bank received over $6 billion of the federal bailout TARP funds. Now they want to give the bailout money back, because it has too many ‘strings attached.’ The strings they apparently don’t want is that the money is to be used to refinance people’s homes, instead of lining the pockets of the greedy CEOs.”

Konechne added, “These greedy banks are like parasites, sucking the blood out of our communities and neighborhoods. They take our money in good times, but in bad times, they throw us to the curb!”

State Representative Jeff Hayden, a Democrat from south Minneapolis, compared the current foreclosure crisis to the crack epidemic of the 1980s. He pointed out that removing longtime residents from their homes was destroying the culture and history of the community. Minneapolis city councilmember Elizabeth Glidden, who was pushed the city council to pass a resolution against evictions, also addressed the crowd.

Niger Arevalo from the Minnesota Immigrant Rights Action Coalition, said, “It’s important for the Latino community to join in these protests to speak out against foreclosures and evictions, because they are affecting our community, together with other working class communities.”

Alan Dale, of the Minnesota Coalition for a People’s Bailout, stated, “The economic crisis is not the fault of working and low-income people. Banks and mortgage companies sold mortgages with escalating interest rates and penalties that were doomed to fail. Increasing layoffs and the economic crisis will lead to more people falling behind on mortgage payments. Working people and low-income people need a bail out. We need time to get through this economic crisis and to save our homes.”

Tom Lenius, before presenting a ‘notice of default’ to US Bank, said, “The banks are in the habit of sending notices of default to the people. Today, the people of Minneapolis gave notice to Wells Fargo and US Bank that they are in default of their obligations to ensure that their activities do not negatively impact the communities in which they do business.” Then the crowd went up to the doors of the bank.

The police snatched the notice and then informed the crowd that the bank manager was too afraid to come out and talk. Coalition member Mick Kelly spoke through the bullhorn to the crowd, “The banks are scared because we are building a movement of low-income and working people that is going to fight back to keep our homes and to stay in our homes and to demand an end to foreclosures and evictions!”

#MinneapolisMN #Minneapolis #MinnesotaCoalitionForAPeoplesBailout #HousingStruggles #capitalistCrisis #housingCrisis

Rosemary Williams, a long-time resident of the Minneapolis Central neighborhood, has won wide community support in her struggle to prevent her mortgage company from evicting her.

Ms. Williams is contesting the foreclosure and eviction on several grounds. Hundreds of neighbors, friends and community members have signed legal requests to intervene in her case. Her supporters argue that her eviction, which will lead to another vacant home, would create a public nuisance for the entire neighborhood.

Stef Yorek, of the MN Coalition for a People's Bailout, said, “Low-income neighborhoods with high concentrations of people of color have been the hardest hit by the foreclosure crisis. Foreclosures and evictions destabilize communities, we need to keep people in their homes, not create more empty houses and more homelessness.”

Cheri Honkala, Poor People’s Economic Human Rights Campaign said, “We are urging people to come to court on June 16 and June 22 to show solidarity with Rosemary Williams and her fight against foreclosure and eviction.”

#MinneapolisMN #CapitalismAndEconomy #News #MinnesotaCoalitionForAPeoplesBailout #RosemaryWilliams #AfricanAmerican #HousingStruggles #capitalistCrisis #housingCrisis

While the pace of layoffs has slowed from earlier in the year, the unemployed are finding it harder and harder to land new jobs. The average time out of work continues to rise, hitting more than 5 months in April. The number of workers collecting unemployment insurance benefits set a new record in April, at 8.5 million, almost three times the level of a year earlier. The number of people on the Federal Food Stamp program is also at a record high, with more than 32 million, or 10.6%, of the population getting food aid.

While jobs and income losses mount, home prices continue to fall. The price of homes has fallen 30% since the peak in mid-2006 as of February. This drop in price has led to more than one-quarter of homeowners being ‘underwater’ with mortgages greater than the value of their home during the first three months of 2009. One of the worst hit areas is in California’s central valley, where housing prices in Modesto and Stockton have fallen an eye-popping 50%.

Many banks had temporarily stopped foreclosure proceedings through March but are now ramping up their foreclosure efforts. These foreclosures are not only hitting neighborhoods that are mainly oppressed nationality, but also more and more renters who are being evicted when their landlords are foreclosed. Even apartment renters are being hit as former homeowners are competing for a place to live, keeping rents up even with the rising unemployment.

This situation is bound to increase the number of homeless people even as a record number of homes stand empty. During the first three months of 2009, 15% of houses were vacant, or more than 19 million homes. The situation has gotten so bad that one bank demolished new homes in Victorville, a city near Los Angeles, California, that it had foreclosed on – rather than trying to sell them.

In the past, many households could borrow against their homes to tide them over rough economic times. But with unemployment up and housing prices in their deepest fall since the Great Depression, household bankruptcies are soaring. In April, more than 125,000 individuals filed for bankruptcies, up 36% from a year ago. There could be as many as 1.6 million bankruptcy filings this year, almost three times the number of 2006 when filings plunged due to the bank-backed new law that made declaring bankruptcy much harder.

State and local governments are also being squeezed by the economic crisis. 47 of 50 states have budget deficits, totaling more than $100 billion for fiscal year 2009, which comes to more than 15% of their budgets. Despite raising taxes and cutting spending, California and many other states face growing deficits as the economy continues to deteriorate.

These budget cuts and tax increases are hitting working people both directly and indirectly. Here in California, state employees (except for prison guards, who make up two-thirds of state workers) were forced to take two days a month off without pay, which is almost a 10% cut in pay. States across the country are cutting health care spending for low-income families, even as more and more people are losing their health insurance due to job losses. Medicaid and the State Children’s Health Insurance Program or SCHIP are both under the gun, along with Temporary Aid to Needy Family (TANF or welfare) and other social service programs.

Local governments and schools are at the beginning of belt-tightening as property tax revenues fall along with housing prices and cuts in state aid. In March, some 25,000 public school teachers in California received early notification of possible layoffs for the fall. State universities and colleges are raising fees and cutting admissions to cope with budget cuts.

Despite the rising unemployment and bankruptcies along with falling home prices, Wall Street, the corporate-controlled media and many politicians are saying that the economy is bottoming out. They say that since the economy is getting worse at a slower pace, a turnaround is in the near future.

One problem with this rosy view is that corporations, weighed down with huge amounts of debt, are in trouble. Business bankruptcies are on the rise as more than 43,000 businesses declared bankruptcy in 2008, 54% more than in 2007. In April, Chrysler Corporation filed for bankruptcy, as the economic downturn, financial crisis and mismanagement finally sunk one of Detroit’s Big Three despite billions of dollars of federal government aid. As auto manufacturers close plants and shed jobs, there is a multiplier effect on parts suppliers and dealers.

Others base their optimism on the huge government stimulus package. But while the Obama administration program does provide some help for the unemployed, schools and transportation, a far larger amount has been spent on bailing out banks and other financial institutions. These same banks continue to cut back on lending that households and businesses need. In contrast, the federal government’s aid to General Motors and Chrysler is conditioned on even more factory and dealer closings that will cut – not create – jobs.

Even if the end of the recession is not far off, it will be marked by growth in the economy and corporate profits, not jobs. Many jobs in auto are gone for good as plants and dealers shut down. With millions of empty homes, construction jobs will not reach the peaks of the last housing boom. The FIRE (Finance, Insurance, and Real Estate) industries were among the fastest growing before the recession when the economy was piling on more and more debt, but no more. In the last two recessions in 2001 and 1991, job losses continued for up to two years after the recession ended.

But the people’s fight back against the crisis is growing. Workers and progressive people across the country rallied to support the Chicago Republic Window Workers and their union, United Electrical, Radio, and Machine Workers (UE) Local 1110 in their struggle against the shutdown of their plant by Bank of America. In Minneapolis, Minnesota, the People’s Bailout Coalition is fighting foreclosures and pushing for a people’s bailout bill in the state legislature by uniting labor, community and student organizations. In North Carolina, students, campus workers, and faculty protested the budget cuts at the University of North Carolina’s Board of Trustee meetings – just one of a growing number of fight backs against cuts in public education.

While most struggles are small and locally based, there is a growing anger at big bankers and big business who brought on the crisis. To add insult to injury, many of them are being rewarded with obscene bonuses, high salaries and tax cuts while the suffering of working people, and in particular in oppressed nationalities such as African Americans and Latinos, deepens. Time will tell that there is no recovery in sight for working people and that our real hope lies is organization and struggle, not the Democrats or Republicans in Washington D.C.

#SanJoseCA #Analysis #Depression #capitalistCrisis #recession

St. Paul, MN – Fifty protesters gathered on tax day, April 15, on the front steps of the Minnesota state capitol building to demand state government tax the rich and not balance the state budget on the backs of working and low-income people. Organized by the Minnesota Coalition for a People’s Bail Out, speakers included leaders of labor unions, low-income groups and anti-war organizations.

Deb Konechne, a spokesperson for the Minnesota Coalition for a People’s Bail Out said, “The wealthy have enjoyed years of state and federal tax breaks, which has led to an enormous concentration of wealth in this country. But what did the wealthy do with this bonus? They ran the economy into the ground. Now state and federal government are preparing budget cuts.”

“People are losing their jobs and homes. It is time the rich make up the difference and pay higher taxes so low-income and working people get a break,” said Mick Kelly, also of the MN Coalition for a People’s Bail Out.

Bernie Hess, of United Food and Commercial Workers Local 789 and the Saint Paul Regional Labor Federation was scheduled to speak but instead was forced to send a message to the rally. He was on duty at a meat processing plant in Buffalo Lake, Minnesota, where over 250 workers were laid off on April 14 with no notice.

Tasha Jackson, of the Welfare Rights Committee said, “The state of Minnesota is in a budget deficit. We say, if the state needs money, go where the money is – tax the rich! Don’t take it from poor and working people.”

The People’s Bail Out coalition has been working for legislation at the state capitol that would provide some basic protections for working and low-income people during the current economic crisis. Among the steps the coalition wants to see enacted are a moratorium on home foreclosures and evictions, an extension of the five-year limit for families receiving public assistance and an end to layoffs of public and University of Minnesota employees.

Rosemary Williams, whose home has been foreclosed on, called on all those present to continue the fight for a moratorium on home foreclosures and for the rights of tenants of properties in foreclosure.

Member groups of the coalition include AFSCME Local 3800, Welfare Rights Committee, Minnesota Immigrant Rights Action Coalition (MIRAc), SDS at the University of Minnesota, Women Against Military Madness, Anti-War Committee, Iraq Peace Action Coalition, Saint Paul Regional Labor Federation, the State Council on Black Minnesotans, UNITE/HERE Minnesota and others.

#StPaulMN #SaintPaulMN #PoorPeoplesMovements #Labor #News #MinnesotaCoalitionForAPeoplesBailout #BudgetCrisis #capitalistCrisis

The single biggest factor in the ballooning deficit was the bank bailout. The federal government’s Troubled Asset Relief Program, or TARP, led to almost $300 billion in new spending, while aid to troubled insurer AIG and mortgage lenders Fannie Mae and Freddie Mac came to another $60 billion. These bailouts accounted for more than half of the increase in the budget deficit.

About one-quarter of the increase in the budget deficit was because of a fall in tax revenues. With rising unemployment and business bankruptcies, the federal government collected about $150 billion less in taxes as compared to the same time last year. Another quarter of the budget deficit was due to increases in spending besides the bank bailout. The largest increase, at $25 billion, was for increases in unemployment insurance benefits, followed closely by a $24 billion increase in spending on the Department of Defense.

The huge federal budget deficit has caused the public debt, or the total owed by the U.S. government, to rise by a little more than a trillion dollars over the last six months, to a total of more than $11 trillion. This is more than 80% of Gross Domestic Product (GDP), the total of final goods and services produced in the United States in a year.

The huge Federal budget deficit raises two questions: first, can the U.S. government continue to borrow to bailout financial institutions, pay for the wars in Iraq and Afghanistan, fund the growing demand for unemployment benefits, food stamps, and other benefits, and spend on the economic stimulus package? Secondly, will the large budget deficits be able to stimulate the economy out the current depression?

So far the federal government has had no problem borrowing enough to finance the deficit. This is mainly due to a rush to buy U.S. government bonds instead of other, more risky types of debt, following the financial crisis that exploded last September. Foreign investors, banks and businesses have been the biggest buyers, which has boosted the value of the dollar. Money market mutual funds and financial security dealers and brokers have also shifted to lending to the

federal government.

But with growing public opposition to more bank bailouts, and growing concern in the rest of the world that the U.S. budget is out of control, the government is planning to shift even more of the financial market bailout to the Federal Reserve, the U.S. central bank. The Federal Reserve has committed itself to a huge increase in purchases of U.S. government bonds, mortgage bonds issued by Fannie Mae and Freddie Mac and lending to private investors to buy more bad bank debt. The Federal Reserve has an unlimited ability to lend because it can create more money. In the last six months the basic measure of money in the United States, or M-1, has grown at a 14.3% rate even as the economy has shrunk. But continuing to print money could also lead to a crisis in confidence in the U.S. economy and a falling dollar. Fears of inflation are also bound to rise, which would also lead to higher interest rates.

Despite the rush to embrace, or to damn, the growing federal budget deficit as a new ‘New Deal’ by some on the left or the right, the actual stimulus to the economy is small. When the financial market bailout and drop in tax revenues is taken out, the increase in the federal government spending on goods and services has only been about $130 billion over the last six months. Almost half of this increase in spending is offset by spending cuts and tax increases by state and local governments, leaving the net stimulus at only 1% of GDP.

The other problem with this increase in government spending (based on the ideas of Depression-era economist John Maynard Keynes) is that it does not deal with the huge overcapacity in auto, construction, retail, airlines and other industries. Keynesian government deficit spending only can address one side of the crisis of overproduction that the economy is going through, the shortfall in spending. It does not deal with the overbuilding done by the capitalists in their competition for more markets and greater profits.

The reality is that neither the New Deal nor even the military spending of World War II alone solved the crisis of overproduction of the Great Depression. The rebuilding of factories, machinery and buildings that decayed during the decade of depression, or that were destroyed during World War II, also laid the basis for the post-World War II economic growth. It is no coincidence that soon after the economies of Europe and Japan recovered from the war in the 1960s that a new crisis of recession and inflation hit the world capitalist economies in the 1970s.

#SanJoseCA #Analysis #FederalDeficit #capitalistCrisis #NewDeal

San José, CA – On April 3 the monthly jobs report by the Department of Labor showed that the official unemployment rate jumped from 8.1% in February to 8.5% in March, while the economy lost another 663,000 jobs. In addition, the number of jobs lost in January was increased by 90,000, to 741,000, which was the worst one-month job loss in 60 years. So far the economy has lost 5.1 million jobs since the recession began, making this the worst recession in terms of jobs lost in more than 50 years.

Job losses spread across nearly every sector of the economy. Construction, manufacturing, trade, finance, hotel and restaurant, and government all lost jobs. Even education, which was gaining jobs up through February, lost jobs as budget cuts spread. This left only health care as a sector with job gains, which came to only 13,000 in March. There was a very large job loss in temporary help services – 72,000 jobs lost – which shows more job losses to come. Temp jobs are usually the first to go and first to come back as businesses try to hang on to permanent workers during recessions and not make permanent hires during expansions.

Another sign of more unemployment pain to come was the record numbers collecting unemployment insurance. Another 669,000 people applied for unemployment insurance benefits in the last week of March. The total number collecting unemployment benefits rose to 5.73 million in March, and there were 1.5 million more collecting extended unemployment benefits, for a total of more than 7 million.

Regular unemployment benefits are for 26 weeks or one-half a year. With the growing job losses due to the recession, Congress added an additional 20 weeks of benefits in 2008, with still another 13 weeks available in states with the highest unemployment rates. So far 18 states have these extended benefits, which is twice the number in previous recessions in 2001 and 1991.

But despite up to almost 14 months of benefits, a growing number of jobless workers could run out of benefits later this year. There are now more than 3 million workers who have been out of work for more than six months as it becomes harder and harder to find a job.

It is no wonder that more and more people are giving up on finding a job. In March some 166,000 people gave up looking. The Labor Force Participation Rate, or percentage of adults who are working or looking for work, fell to 59.9%, the lowest since 1985. The underemployment rate, which includes people working part-time who can’t find full-time work, as well as the unemployed who haven’t been looking, grew to 15.6% in March.

The growing job losses are causing record numbers of delinquencies and charge-offs of consumer loans. The Federal Reserve report on consumer loan problems showed 4% of all (non real estate) consumer loans and 1.6% of mortgage loans were charged off by banks that have given up on collecting them. Another 4% of consumer loans and 6% of home mortgages were late.

Recently the stock markets have been on a tear, with wealthy investors optimistic that the economy is bottoming out. But for working people, there is no end to the recession in sight. With job losses piling up month after month and with a large number of people set to lose their unemployment benefits, workers cannot afford to wait for the federal government’s economic stimulus plan to kick in. Even if the stimulus works as claimed, it will only provide 3 to 3.5 million jobs over the next two years. In the meantime, the economy has lost more than 3 million jobs in the last five months alone. We need a government jobs program that can guarantee jobs or income for all.

#SanJoseCA #Analysis #Unemployment #capitalistCrisis

On March 19, University of North Carolina (UNC) Chancellor Thorp implemented permanent 5% budget cuts, a measure that “will have deep impacts on student services across campus, class sizes and availability, and will result in dozens of workers losing their jobs and hundreds more positions being left unfilled, which will put a huge strain on already overworked employees of the university,” according to a press release from the organizers of the demonstration. The protesters demand that any budget cuts should “chop from the top” and that there should be full transparency and accountability in any decisions made around the budget crisis.

Brenda Denzler, vice-chair of the UNC Employee Forum, told the Board of Trustees earlier in the week that they must “publicly, openly and honestly state what the university’s policy is on how it will achieve the next round of budget cuts and whether it will reject budgets that do not include personnel cuts.”

“It’s ridiculous that while the chancellor is getting paid hundreds of thousands of dollars and average housekeepers are getting paid $25,000, the administrators think it best to save money by cutting low wage jobs,” said Rakhee Devasthali, an undergraduate and organizer with the coalition.

Salia Warren, an organizer with the North Carolina Public Service Workers Union (UE 150) at UNC, agreed that cuts should start from the top. “We demand that the cuts come from the top down, not the bottom up. The lowest paid administrator makes $95,000 a year – that’s four housekeeper’s jobs.”

“We’re launching a resistance and recovery campaign in all our union chapters across North Carolina,” said Warren, explaining the union’s approach to the economic crisis. “Workers during this period have to stand up and resist these budget cuts on their backs. Everything that’s happened so far is on the backs of the working class. We’ve got to say ‘we can’t take it anymore’. No one is bailing the workers out.”

Steve Milder, a graduate student in the History Department, explained how the budget cuts will have a dramatic impact on graduate students. “The budget cuts are making it unclear if as many graduate students will be able to keep their paid teaching positions next year,” said Milder. “We depend on those stipends to pay for our living and study expenses. If our salaries are cut, a lot of us will be forced to drop out.” Commenting on the process involved in cutting funding to graduate students, Milder added, “As graduate students, we feel shut out of the decision making process and are faced with a lot of uncertainty about our future.”

The demonstration was organized by a coalition made up of members from the Counter Cartographers Collective, United with the Northside Community NOW, Feminist Students United, Student Action with Workers, Students for a Democratic Society, UE 150, State Employees Association of North Carolina District 25, UNITY conference, Fight Imperialism Stand Together, HK on J, Progressive Faculty Network, along with many unaffiliated students, faculty and workers.

The coalition plans to continue organizing against the education cuts and layoffs, with more actions and educational events in the coming weeks.

#ChapelHillNC #CapitalismAndEconomy #Labor #News #BudgetCuts #capitalistCrisis #UE150

What the administration is demanding is even deeper cuts in workers’ wages and benefits, after autoworkers have already made recent concessions and suffered thousands of job losses. Many more dealers will be forced to close, causing more layoffs. Analysts of the automobile industry say that up to one-third of auto parts suppliers could be forced to declare bankruptcy in the next few months, possibly disrupting production at Ford, Toyota, Honda and other companies with car plants in the United States.

With the unemployment rate in Michigan the highest in the nation at 12% in February (compared to 8.1% nationwide), this plan to make the auto companies ‘viable offers even more pain. The unemployment rate has risen 4.6% in Michigan in the last year alone, as the car companies’ troubles have caused ripple effects throughout the state’s economy. Michigan has one of the highest foreclosure rates outside of the housing bust states like Nevada, Florida, Arizona and California.

For years, right-wing critics have tried to blame the United Auto Workers (UAW) union for Detroit’s problems. But the real blame is on the auto companies’ management, which saw the North American market as a cash cow. For years they built big cars and took the profits to build up their overseas business. GM is the largest carmaker in China, while Ford just opened a brand-new car plant in Russia.

The right has also tried to blame the workers’ wages and benefits. But union concessions have brought UAW workers’ wages down to the level of nonunion workers at Japanese and European car factories in the United States. But this did not help Detroit; instead it is encouraging a ‘race to the bottom’ for workers’ wages.

Chrysler, Ford and GM do have substantial retiree health benefit costs. While the newer Japanese and European car plants have almost no older workers, the Detroit has to pay for their retirees’ health insurance. But the real problem is not the retired auto workers who have health insurance, it is the U.S. for-profit, private health insurance industries that leaves 15% of our adults without coverage. If the United States had universal government health insurance, the Detroit auto makers would not have this burden.

The tough line that Washington is taking with Detroit’s automakers is very different from the government’s treatment of big banks. Citigroup has received three times as much bailout money as GM. But their CEO remains. Citi faces no deadline for a turnaround plan, no demand for wage cuts and no demand for Citi’s bondholders to take a hit.

Once again, Washington and Wall Street are putting the burden of the crisis on workers. We need to fight the ongoing giveaway to big banks and financial speculators and demand that the government provide health insurance for all.

#SanJoseCA #Analysis #AutoUnitedAutoWorkers #capitalistCrisis #autoIndustry #GM

Minneapolis, MN – About 100 demonstrators gathered outside the Minneapolis Convention Center to protest a massive auction of foreclosed homes, March 28. The protest was initiated by the Minnesota Coalition for a People’s Bailout.

The protest called attention to the urgent need for action by the government to halt the foreclosure crisis and to demand actions that protect working and low-income people from the ravages of the current economic crisis.

The Real Estate Disposition Corporation (REDC), one of the largest private auctioneers of foreclosed homes in the country, is sponsoring the auction. More than 300 foreclosed homes were on the block. The houses being sold to the highest bidder are the homes of families who were forced out by banks and mortgage companies.

“We cannot and must not be indifferent to the ugly spectacle of the auctioning of the homes of displaced families,” said Alan Dale of Minnesota Coalition for a People’s Bailout.

Dale continued, “In the midst of the worst economic crisis since the depression of the 1930s, these auctions should not be taking place. These auctions are a symptom of the cruel and criminal economy that ignores people while protecting corporations and large banks.”

“Working and low-income people should not be paying for this crisis. Banks and corporations have received billions of dollars of government funds, while continuing to foreclose and evict people from their homes,” said Deb Konechne of the Welfare Rights Committee and Minnesota Coalition for a People’s Bailout.

The protest also called attention to the foreclosures of rental properties in Minneapolis and Saint Paul. The tenants in these rental properties are often evicted by the banks and mortgage companies that foreclose on the landlord, even though the tenants have been faithfully paying rent, assuming the landlord was taking care of the mortgage.

“Working people who have fallen behind in payments due to the economic crisis, or due to the predatory nature of the mortgage they were sold, need basic protections,” said Konechne.

“While this auction goes on inside, the families that used to live in these homes have been put out. Every day in Minnesota, more and more families are losing their homes to foreclosure,” said Stef Yorek, of the Minnesota Coalition for a People’s Bailout.

Yorek also said, “We need a statewide moratorium on foreclosures and a state law that stops banks and mortgage companies from evicting tenants in foreclosed rental properties. Without these steps, the housing crisis will only deepen.”

The Minnesota Coalition for a People’s Bail Out is a grassroots campaign that has brought together labor unions, low-income organizations, peace and justice groups, students, housing advocates and others to call on Minnesota state government to take action to protect working and low-income people from the worst effects of the economic crisis.

The coalition is working to build support for the People’s Bailout Act at the Minnesota legislature. For more information, visit www.mn-peoples-bailout.org.

#MinneapolisMN #CapitalismAndEconomy #Labor #News #Foreclosures #HousingStruggles #capitalistCrisis #housingCrisis

Deb Konechne, a leader of the Minnesota Coalition for a People’s Bailout told the committee, “What we need is a bailout for the people. This legislation is a people’s bailout bill that addresses many of the issues that people in this state are facing and takes crucial steps to protect low-income and working Minnesotans from the ever-growing economic crisis.”

The act would put a moratorium on housing foreclosures and it would force banks and mortgage companies that foreclose on rental property to honor existing leases, thus preventing tenants from becoming homeless. Many of the touted programs to help homeowners and tenants have not yet taken effect on the ground, so Minnesota needs a moratorium.

The act also would extend and expand eligibility for unemployment benefits, create a new public works program to put people to work and place a moratorium on the five-year lifetime limit for public assistance. The act would prevent layoffs of public sector workers, including workers at the University of Minnesota.

The Minnesota Coalition for a People’s Bailout, a group of community, labor and other organizations, has been working with a broad range of community organizations to win support for the legislation.

“This legislative hearing is an important step in the effort to pass protections for low-income and working Minnesotans from the economic crisis. The act will provide protection from the most damaging affects of unemployment – mortgage foreclosures and evictions,” said Phyllis Walker, President of AFSCME Local 3800, one of the organizations supporting the act.

“Families on MFIP, the state welfare program, are facing a very bleak situation unless there is an extension of the five-year limit on receiving public assistance,” said Deb Konechne of Minnesota People’s Bailout Coalition and the Welfare Rights Committee. Konechne continued, “Grinding poverty, more homelessness, raising small children and living with disabilities in today’s blighted economy is extremely difficult. It is not realistic to expect these families to recover in the limited time currently available to them.”

The act would put in place protections for tenants in rental properties that are foreclosed. Currently, tenants in foreclosed properties can be given as little as a 60-day notice to vacate their rental homes once the bank or mortgage company reclaims the property.

“Tenants should not be made homeless when their landlord loses the property. The banks and mortgage companies have a responsibility to those tenants. Those companies have not voluntarily taken that responsibly, so it is up to the state of Minnesota to force them. Tenants have paid their rent and that rent was supposed to go to pay the landlords’ mortgages,” said Mick Kelly of the Minnesota Coalition for a Peoples’ Bailout.

The act would also put in place a moratorium on foreclosures for homeowners.

“Working people should not be losing their homes due to the economic crisis of the rich and powerful. The federal government is providing hundreds of billions of dollars to banks and corporations. Minnesota must take action to protect the homeowners who are facing foreclosure as a result of the corrupt mortgage market that the homeowner did not create and rising unemployment which is destroying the living standards of working people across the state,” Kelly continued.

The National Alliance to End Homelessness, in a January 2009 report, estimated that 1.5 million more people in the U.S. would become homeless over the next two years. This is over and above the number who would experience homelessness without the effects of the economic crisis.

A broad range of organizations have signed on to support the Bail Out Act, including the Saint Paul Regional Labor Federation, representing union households in the east metro area; AFSCME Council 5, the State Council on Black Minnesotans; AFSCME Local 3800, Elim Transitional Housing, Inc, Welfare Rights Committee and many others.

#StPaulMN #SaintPaulMN #PoorPeoplesMovements #Labor #News #MinnesotaCoalitionForAPeoplesBailout #BudgetCrisis #capitalistCrisis

San José, CA – On March 18, the Federal Reserve announced that it would inject an additional $1.15 trillion into credit markets. With short-term interest rates already close to zero percent, the Federal Reserve will try to lower long-term interest rates in an effort to boost the economy. The Fed will buy another $750 billion in bonds backed by mortgages guaranteed by Fannie Mae and Freddie Mac, $300 billion in long-term U.S. government treasury bonds and another $100 billion in bonds issued by Fannie Mae and Freddie Mac.

Following the outbreak of the financial crisis last year, the Federal Reserve bought almost $50 billion in bonds issued by Fannie and Freddie, and $225 billion in mortgage-backed bonds. But mortgage interest rates barely budged and the housing market continued to tank. So the Fed will buy three times as many more bonds in the hope that this will increase the price of bonds, which should lower mortgage interest rates. The Fed hopes that this will help more people to buy homes, stabilize houses prices and limit the growing tide of foreclosures.

The Fed is also buying longer-term U.S. government, or Treasury, bonds for the first time since the early 1960s. The huge U.S. government budget deficit this year, which will be around $1.5 trillion, means a huge number of bonds must be sold to borrow the money. This has started to drive up interest rates, which the Fed hopes to reverse by buying more bonds. The Federal Reserve was following the example of the Bank of England, the Fed’s counterpart in Britain, which has begun to buy government bonds, forcing down interest rates.

The Federal Reserve will create money through its electronic printing press to buy all of these bonds. With the supply of money already rising at a 24% rate the last six months, the latest Fed action further raises the danger of inflation in the future. Already inflation is on the rise this year after prices fell late last year. But the Fed seems to feel that it has no choice, as it no longer sees an economic recovery happening this year. While the Fed is right to fear the deflation, or falling prices, that helped ravage the economy in the 1930s, it may be laying the basis for a return to stagflation, or inflation and recession, common in the 1970s.

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Freedom Road Socialist Organization (FRSO) opposes ‘nationalization’ of banks by the present government. We stand with the majority of the American people who oppose more bank bailouts.

Let’s start with the government takeover of American International Group (AIG), one of the world’s largest insurance companies, last September. It began with an $80 billion bailout and takeover by the government. Then there was a second bailout, then a third, and now a fourth, adding up to more than $150 billion, with no end in sight. Even worse than the ever-rising cost is the fact that the government was not bailing out those who had bought insurance from AIG. The insurance part of AIG was regulated and there are enough assets to pay claims. The government is bailing out the wealthy investors and big banks that made loans to AIG, which were used to make big financial bets, known as derivatives. At least $50 billion of the AIG bailout has gone to big banks to pay off these bets. Why should the government spend money to bail out big gamblers when these are the very same people who helped to cause today’s crisis that has thrown millions of people out of their jobs?

This is what the bank bailouts are about: Not helping working people or small businesses, but saving the big investors and bankers. Look at the Troubled Asset Relief Program or TARP. The $300 billion spent on TARP has not gone to banks, it has gone to the holding companies that own the banks. And what have they used the TARP money for? To buy other banks, to pay billions of dollars in bonuses to executives and traders and billions more in dividends to stockowners. ‘Nationalization’ of the banks will be just another bailout of the bankers.

And where will the billions more in government aid that AIG and other big banks will be asking for come from? Not the rest of the world, which has been lending the U.S. government enough to cover almost all of the federal budget deficit and is also being dragged down by the economic crisis. These countries are trying to spend on their own economies; they are not out to save the United States. Trying to borrow the money in the United States would mean even higher interest rates, which would hurt the economy. The U.S. government may be forced to print the money, which could lead to more inflation and lower the purchasing power of workers’ wages. Or the federal government could try to cut spending on Social Security, Medicare or other social programs.

FRSO is a socialist organization. We believe that government ownership of the big banks and big corporations could help to create an economy that is based on peoples’ needs, not private profit. But this would require a government for and of working people. Today’s government is a far cry from that. Most politicians at the federal level are bought by Wall Street and big business and cater to their needs. The revolving door between the federal government and big business guarantees ‘good’ (that is pro-business) behavior by politicians, government administrators and top military brass. What we need is not bank ‘nationalization’ but a stronger and more militant people’s movement that can make the rich pay and protect the interests of poor and working people.

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