Students and Youth Hit Hard

One of the groups hit hard by the economic crisis is college students and youth. The crisis led to class cuts and tuition hikes at public colleges and universities across the country. While the pace of budget cuts and tuition increases slowed with the economic expansion, they still continue today. One example is the growing threat to Historically Black Colleges and Universities (HBCU), many of which are seeing dramatic and dangerous drops in enrollments because of cuts in federal student loan programs.

Double Whammy

Youth who do manage to graduate from college, which is taking longer and becoming more expensive than ever, face a double whammy. On one hand the economic crisis sped up the restructuring of the labor market. Over the last 30 years millions of manufacturing jobs were automated away, off-shored by multinational corporations, and/or workers’ wages and benefits were cut. Now, government is one of the last remaining sectors with decent paying jobs, benefits and union representation. However, this sector has been hit harder by the Great Recession of 2009 than any other recession since the 1930s. Hundreds of thousands of local and state jobs are being lost, while government workers face wage and pension cuts and loss of union protection. Republican politicians are taking away hard-earned bargaining rights in states like Wisconsin and Michigan.

Restructuring Youth: Low-wage, Part-time and Temporary

In addition to the loss of jobs that pay a living wage and benefits, more and more permanent, full-time jobs are being replaced by temporary and part-time jobs. Today about half of all recent college graduates are either unemployed or underemployed, with part-time or temporary jobs, many of which don’t even require a college degree.

Skyrocketing Student Debt

There is an explosion of student loan debt, which totals as much as $1.2 trillion. Student loan debt is now the largest form of consumer (non-mortgage) debt, about 40% of the total. Caught between rising tuition and the cost of living on one hand and stagnant grants and wages, college students and their families have been borrowing more and more to pay for college. This student debt is a growing burden on youth, especially those who were not able to graduate or find a full-time, permanent, decent paying job.

Boom then Bust, Repeat

The boom and bust cycle under capitalism is not an accident – it is part and parcel of a capitalist economy. Wages are pushed down to grow profits, and this limits workers ability to spend. Then the profits are reinvested in expanding production, thereby increasing the ability to produce more, but the workers cannot buy all that they produce, and a periodic crisis of overproduction, or what we call recessions occur.

Crisis upon Crisis

On top of this, the build up in debt and deregulation and expansion of the financial sector following the end of the post-World War II economic boom in the 1970s led to growing financial crisis in the U.S. From the Third World debt crisis and Savings and Loan crisis in the 1980s to the Asian Economic Crisis of the 1990s, and most recently to the financial crisis in 2008, these crises have grown and become a greater and greater threat to the economy as a whole.

People Over Profits

The government is turning away from stimulating the economy to policies of more and more austerity – higher taxes on working people and cuts to programs that serve the people. The spending cuts are really felt at the state and local levels, hurting education funding from Head Start through university level. With financial regulation blocked by the power of Wall Street, it is more and more clear that the government, along with both political parties, are bought and paid for by the rich. They offer no real hope for working people and college-aged youth. Only a socialist economy, one based on people’s needs and not profit, can offer an alternative of expanding access and affordability to higher education, while creating jobs that pay a living wage.

Masao Suzuki teaches economics at a community college in California and is a member of the Freedom Road Socialist Organization (FRSO).

#SanJoséCA #crisisOfCapitalism #recession #PublicSchools #economy #corporateProfits #tuitionHikes

San José, CA – Early New Year’s Day, the U.S. Senate voted 89-8 to pass a compromise bill to put off the so-called ‘fiscal cliff.’ The bill now goes to the House of Representatives, where Republicans are likely to try to get even more tax breaks for the rich.

One of the few good parts to the bill is that it will continue the federal unemployment insurance for the long-term jobless for another year. There are about 2 million workers collecting benefits under the Emergency Unemployment Compensation (EUC) program. All of them would be immediately cut off this week if a bill extending the benefits is not signed into law.

Other benefits of the compromise for poor and working people are an extension of the Earned Income Tax Credit (EITC), a child tax credit and credits for college tuition. These credits were expanded or started in 2009 in response to the economic crisis and will continue for five years.

On the other hand, working people face an immediate tax hike because the payroll tax cut will expire. Most workers getting a paycheck will see their FICA payroll taxes (which go to pay for Social Security) rise by 2%, from 4.2% to 6.2%. This will affect 160 million working people, raising their taxes by about $125 billion in the coming year. This tax increase will have less effect on the rich, as the FICA is only collected from paychecks and not from investment income, and only on the first $113,700 earned.

The compromise also locks in the Bush-era income tax cuts for everyone earning less than $400,000 ($450,000 for a household). The Bush cut in taxes on interest, dividends and capital gains will also continue for these individuals and households. There is a permanent ‘fix’ for the Alternative Minimum Tax, which mainly benefits households earning $200,000 to $500,000 a year. A cut in Medicare reimbursement rates for doctors is delayed a year. The lower limit on taxing estates goes from $1 million before the Bush tax cuts to $5 million under the compromise. A number of business tax credits were also extended.

In addition, the compromise puts off the automatic, across the board spending cuts designed to reduce the federal government’s budget deficit by two months. However, the compromise does nothing about raising the federal government’s debt limit, which will force massive cuts in spending in about two months if nothing is done.

#SanJoséCA #Unemployment #crisisOfCapitalism #taxCuts #ExtendedUnemploymentCompensation #fiscalCliff

Trenton, NJ, – The people’s struggle against foreclosures took a new turn before the New Jersey Court of Appeals here, Dec. 19.

Foreclosure today is capitalism in chaos, a capitalism of swindling even on its own terms. New problems require new tactics of struggle.

In early December, Attorney Adam Deutsch was invited to speak to the Coalition to Save Our Homes, a group in Essex County that organizes homeowners to take the initiative in the struggle against predatory lending. He suggested that one thing people can do is turn out and pack the courtroom when important foreclosure defense motions are presented.

He later mentioned a case in progress that shows the marks of chaos. The bank, HSBC, had never met the requirements of law to prove it held a financial interest in the mortgage. In the foreclosure trial the judge pointed out to the HSBC attorney that the mortgage note, the crucial point of the bank’s financial interest in the property, had not been submitted to the court. The attorney replied that no defense was being made.

No one would argue that, if someone walked into a store when no one was there, they could lawfully clean out the till and walk off with the money. The judge should have stopped right there and not allowed HSBC to continue until it proved it had a claim on the house. Instead HSBC was allowed to proceed. This defect and others in HSBC’s case were not removed in the foreclosure hearing when final judgment (i.e., order of foreclosure) was granted against the homeowner.

A big problem for the defense appeal is that the homeowner did not come to court to defend before judgment of foreclosure was issued. The defense therefore had to deal with procedural issues of delays in filing, as well as seizure of property by a bank with no proven financial interest in it. The defense also says lower court decisions were made in error and should be reversed.

These issues figure in millions of predatory lending cases. Courts far too often exhibit a double standard. Homeowners are excused for nothing and banks for anything.

The difference in the Dec. 19 hearing was that homeowners, activists, and organized labor representatives showed up in court. A case that ordinarily would have been heard before an empty courtroom was heard before a body of citizens with their own sense of justice. The discomfort of the bank’s attorney was obvious. He began in a mumbling tone of voice and an attendee called out, “We can’t hear you.” Ordinarily that is a big no-no in court but the only result was that the attorney spoke up. He distanced himself from the issue of ownership of the mortgage note. The court asked if the bank had submitted properly certified proof of ownership – the defense contends it had not – and the response was a stammered, “I guess so.”

Decisions are not delivered at appeals court hearings. The judges take the case under advisement and issue their decision later.

However the decision turns out, the day showed the way forward. The people’s forces felt a sense of unity and empowerment. We can fight the banks, we can fight foreclosure. We don’t have to settle for making the best of a bad situation. We can attack the bad situation itself. If there is no justice in the halls of justice we will bring our own standard of justice. We will depend on ourselves to build a broader, stronger, more united movement for people’s economic justice, and we will succeed.

#TrentonNJ #HousingStruggles #crisisOfCapitalism #CoalitionToSaveOurHomes #HomeForeclosures #AttorneyAdamDeutsch

Tallahassee, FL – The afternoon clouds were dark, but even the threat of rain couldn't stop students, retirees, and union members from taking a stand against federal budget cuts. About 35 people rallied outside of Republican Congressman Steve Southerland’s office here, Dec.10, demanding no cuts to Medicare, Medicaid, or Social Security.

The protest was part of a national day of action called by the AFL-CIO and other trade unions in response to the so-called ‘fiscal cliff.’ If Congress does not act by Jan.1, 2013, they will trigger a set of austerity measures, budget cuts and tax increases.

Carrying signs that read, “Don’t cut my Medicare benefits,” and “No more tax cuts for the rich,” protesters listened to a short stack of speakers in the parking lot below Southerland’s office.

Republican lawmakers, like Southerland, have pushed for deep cuts to programs that support workers and retirees, like Medicare and Medicaid. President Barack Obama and the Democratic Senate have proposed a compromise that includes meager tax hikes for the richest 2%, coupled with cuts to Social Security and Medicare in the form of increasing the eligibility age.

Michael Sampson, a student at Florida State University, fired up the crowd with a passionate speech explaining how budget cuts by politicians benefit the rich at the expense of working people. He said, “We see the politicians of the 1% trying to balance the budget on the backs of the hardworking people who built this country. And it is a shame!”

The crowd erupted into cheers and chanted, “When Medicare is under attack, what do we do? Stand up! Fight back!”

Next, protesters heard from David Jacobsen, the President of the Northwest Florida AFSCME Retiree Council, which represents more than 600 retired workers.

“We want legislators to keep their hands off these programs,” said Jacobsen. Speaking to Republican proposals that would force working class retirees to pay crippling bills, he added, “Medicare should never, ever, ever be a voucher program. It should be available to young people the same way it is available to me now.”

After Jacobsen’s speech, the protesters marched upstairs to Southerland’s office chanting, “They say cut back, we say fight back!” The crowd packed inside the small office and asked Southerland’s staff to pass on their demands to the congressperson.

Taking video using an office cell phone, the staff recorded a message of retirees and students speaking out. The footage was sent directly to Southerland’s phone via text. The protesters then reconvened outside briefly to discuss future actions.

For more in depth analyses of the ‘fiscal cliff’ see: http://www.fightbacknews.org/2012/9/25/federal-government-course-austerity-2013

#TallahasseeFL #PoorPeoplesMovements #BudgetCuts #crisisOfCapitalism #SocialSecurity #Medicare #fiscalCliff #CongressmanSteveSoutherland

The U.S. economy is showing signs of stagnation – that is, slow economic growth combined with ongoing high unemployment – ever since the financial crisis and deep recession in 2008-2009. When economic stagnation first showed up in Europe in the 1980s, mainstream U.S. economists blamed the European social democratic policies of high taxation and extensive social welfare programs like universal health care. Then economic stagnation spread to Japan in the 1990s and again mainstream U.S. economists blamed the Japanese government policy of supporting certain industries.

Now the third center of world capitalism, the United States, has joined Europe and Japan. With unemployment still more than 8% almost three years after the official end of the recession, it would take about six more years at the current rate of job growth just to gain back the jobs lost during the last downturn. The U.S. economy has followed a much more free-market approach of deregulation of industry, cuts in social welfare programs and attacks on unions since the 1980s. But Wall Street bankers, freed from regulations dating back the Great Depression, let their greed run amuck, leading to a boom and then bust in the housing markets that ultimately led the biggest financial crisis in the United States since the Great Depression of the 1930s.

In a capitalist economy production of goods and services is done to make a profit. This drive for profits leads businesses to pay their workers less than the value of what the workers’ labor creates, which is what Karl Marx referred to as exploitation. This can be seen today in the United States as the purchasing power of wages has been flat while the value of what an average worker produces has been rising. This has led to record corporate profits, while more and more working people are living paycheck to paycheck and sinking into poverty.

At the same time, competition among businesses leads them to reinvest most of these profits into expanding their businesses and introducing new technology. This is what Marx called the accumulation of capital, which leads to the ability to produce more and more goods and services. But this ability to produce more comes into conflict with the fact that exploitation limits the ability of workers (who make up 90% of the population in the United States) to buy the goods and services that they have produced. The result is crisis of overproduction, or what are called recessions today.

During a recession, goods and services go unsold – not because they are not needed or desired, but because they cannot be sold at a profit. The most glaring example today is in the housing market, where there are a record number of homes standing empty at the same time as there are record numbers of homeless (counting not just those on the street, but including people living in cars and staying at friends and relatives).

This can explain the regular pattern of alternating periods of economic growth and recession, or what is called the business cycle. Here in the United States there have been 33 such cycles over the last 200 years.

For more than a hundred years, huge corporations have developed in more and more types of businesses, so that a small handful, or even just one, giant corporation can dominate an entire industry. What Marx called the concentration and centralization of capital can be seen in the recent takeover of more and more types of retail businesses such as office supply, bookstores and hardware stores by two or three companies.

These giant corporations can cut back on production to limit overproduction, but then end up with overcapacity, or the ability to produce more than they can produce and sell on the market for a profit. This overcapacity can be seen in many industries: car makers can produce more cars than can be sold, steel producers can produce more steel than there is a market for, etc.

With the ability to produce more than what can be sold, corporations are sitting on literally trillions of dollars of profits that are not being spent to expand business. This is what leads to stagnation: the lack of reinvestment of profits means slower economic growth and fewer jobs, i.e. the economic stagnation that we see today.

Neither the Republicans nor the Democrats offer a real solution to the economic woes for working people. The Republicans want to increase corporate profits by increasing the exploitation of workers using the methods of cutting pensions, smashing unions, limiting health care benefits and cutting unemployment insurance and other social safety net programs. In addition the Republicans would cut taxes and regulation on business to make them even more profitable. But this would only increase the contradiction between the limited purchasing power of workers and the ability of corporations to produce more, leading to another crisis of overproduction.

The Democrats would prefer to use the government to increase corporate profits through subsidies and loans for selective industries with new technology (like electric batteries and solar panels) or the health insurance industry (with the health care reform law). While the Democrats talk about helping out working people with cuts in payroll taxes and extending unemployment insurance, their support for balancing the budget will lead to more austerity: higher taxes and cuts to social programs, including the two biggest, Medicare and Social Security.

Only a socialist economy, where production is aimed at peoples’ needs, not for profit, can overcome the cycle of boom and bust and the economic stagnation that we face today. A socialist economy, with government and collective ownership of the means of production (and not just the extensive social welfare programs as seen in Europe), cannot be won at the ballot box, since both major parties are in favor of the 1% that benefits from capitalism. Only mass struggle can bring about the fundamental economic change that will benefit working people.

#UnitedStates #WallStreet #Socialism #crisisOfCapitalism #recession #Capitalism #republicanParty #democratParty

In September of 2008 the New York Federal Reserve gave the U.S. insurer American International Group (AIG) an $85 billion loan as part of the bailout of Wall Street. The NY Fed told AIG to pay big banks in full the $62 billion AIG owed for credit default swaps. In addition, the NY Fed told AIG not to tell the public how much they owed or who they were paying off. The government bailout of AIG has been increased three times since then and now totals more than $180 billion.

The corporate-owned mainstream media has been crowing about the ‘success of the bank bailout as the biggest banks have repaid their Troubled Asset Relief Program (TARP) funds. But little mention is made of how these same big banks that have repaid their TARP moneys got this secret bailout via AIG.

Current Secretary of the Treasury Timothy Geithner was president of the New York Federal Reserve when AIG and big banks were given the secret bailout. The editors of Fight Back! say that Geithner should resign, or be removed from the post of Treasury Secretary.

The federal government should also have tax on financial transactions. A small tax of one-half of one percent or less could raise more than $100 billion a year. Representative Peter DeFazio (Democrat-Oregon) has recently reintroduced a bill to tax financial transactions. Unfortunately, many Democratic representatives who are in bed with Wall Street have opposed this, calling it a “huge new tax burden.” In fact, a financial transactions tax could crimp the profits of big Wall Street firms and big banks, but since they helped create the economic crisis, why shouldn't they pay?

Working people are facing higher state and local taxes and severe service cuts, while the official unemployment rate is still above 10% nationally. People are now paying five or even ten percent sales taxes on the goods that they buy, why shouldn’t there be a small tax on the financial assets that Wall Street sells? This money could be used to cover the costs of the bank bailout and be spent by the government to create jobs.

#UnitedStates #CapitalismAndEconomy #Editorials #crisisOfCapitalism #Geithner

Berkeley, CA – Over 600 activists gathered on Oct. 24, for a conference to organize against the statewide education budget cuts.

Public education is under attack across the state of California, from kindergartens to universities. The struggle has intensified as public officials have brutally cut funding and launched a campaign of privatization.

The conference came out of last month’s massive university walkouts, which drew thousands of workers, students and faculty demanding an end to layoffs, furloughs and tuition hikes. Excitement filled the room during the proceedings as students and workers came together to hammer out a unified plan of action to defend public education.

“We did not make this crisis, but we are paying for it!” said Kathryn Lybarger, an organizer with AFSME local 3299. The pay cuts, forced furloughs, tuition hikes and slashed department funds will only account for 2% of the gaping hole in the state budget, she explained. “So the question has to be asked – why go after education to pay California’s debt?” According to one of the University of California (UC) regents, the state-appointed board that manages the UC system, the answer is simple: The public schools are an untapped business.

The people of California are making it clear that they do not share this view, through protests and direct actions. John, a middle school teacher in the Bay Area, heatedly argued that “education is not a commodity to be bought and sold.” His school participated in a ‘sick-in’ this past spring, joining dozens of other Los Angeles Unified School District schools that held actions against the teacher layoffs.

Oppressed nationality and working class students have been hit the hardest. “Recruiters used to come to our community college two to three times a year,” explained Brian Donovan, chapter president of Diablo Valley Students for a Democratic Society. “But now we see them nearly every week.” Lately, the chapter has been organizing counter-recruitment actions, often pushing the Air Force to pack up before they even get started.

By the afternoon, the conference attendees agreed to a day of action against privatization and cutbacks, scheduled for March 4 of next year. Break-out sessions (grouped by system – University of California, California State University, community colleges and K-12) were used for more specific brainstorming.

The conference ended with participants marching on Mark Yudof’s Oakland home. Yudof, the president of the UC system, was hired to run it like a corporation. In a recent interview he arrogantly compared his job to “presiding over a cemetery.” In response, the workers of Healthcare, Research and Technical Employees-CWA and AFSME erected a graveyard on the front lawn of his taxpayer-subsidized mansion.

In recent weeks, occupations, sit-ins and other militant actions have exploded across the California education system. Organizers of a building occupation at UC-Santa Cruz explicitly mentioned the Republic Windows and Doors workers as a source of inspiration. The way forward is being paved and the workers of the United States are refusing to pay for the economic crisis that the rich have inflicted upon us. On Nov. 19, UC students and workers will descend on UCLA’s campus to shut down the regents meeting and demand an end to the attacks on public education.

#BerkeleyCA #OppressedNationalities #BudgetCuts #EducationRights #crisisOfCapitalism #UCBerkeley

Activists from the welfare rights, labor, immigrant rights and anti-war movements filled May Day books store here, for a forum called 'Capitalism in crisis; fighting back in hard times,' Oct. 25. Speakers included Steff Yorek of Freedom Road Socialist Organization and Linden Gawboy of the Welfare Rights Committee and the Minnesota Coalition for a People's Bailout, along with labor and student activists.

Linden Gawboy, of the Welfare Rights Committee told the crowd, “We have be clear who the enemy is in our battles. The wealthy that own this country want to get rid of welfare. They want to steal our houses. They want us to work for nothing, have no education and on an on. Not for the good of society, but in the hopes that they can crawl up on a heap of corpses – and get rich.”

Steff Yorek, the Political Secretary of Freedom Road Socialist Organization opened her talk by stating “It's not news to us in this room that there is an enormous economic crisis. It began in December of 2007 with a crisis of overproduction, where the economy produces more than can be sold at a profit.” She also noted that the effect of the economic crisis are uneven, saying, “The monopoly capitalists are trying to put the burden of the crisis on the working class and oppressed nationalities,” pointing out that home foreclosures and job losses are disproportionately affecting African American, Chicano/Latino and other oppressed nationality communities.

Yorek also talked about the financial crisis, stating “The ruling class says the financial crisis is over; that remains to be seen. The federal government did give banks $700 billion and a free line of credit. The capitalists tried to blame the crisis on the government, overlooking the fact that the government had pursued their policies of deregulation, free trade and cuts in social programs for almost the last 30 years. And none of that has resolved the crisis of overproduction. This crisis is continuing and will continue for a long time. Working and oppressed people will continue to see massive unemployment, a crisis in housing and an accelerated erosion of our standard of living over the next several years, as if it isn't bad enough already.”

After stating that is was critical to build the day-to-day struggles of working people, Yorek said that revolutionary change was necessary to get rid of capitalism and its crises.

“When I talk about revolution, I mean that we need to throw out capitalism altogether – with its recurring crises and its criminal abuses of all working and oppressed people, always favoring a tiny group of rich and powerful. The socialist countries are not experiencing the economic crisis that plagues the capitalist world. Socialism would never throw our nation’s wealth into bailing out criminal bankers who are closing up factories and taking away people’s homes. So as each of us fight for changes here and now, we must see our work as part of a long term fight to overthrow the capitalist system and build something new: Socialism. Socialism would put an end to these crises and allow us to solve the problems of society in the best interests of all of us, not in the interests of the rich,” Yorek concluded.

#MinneapolisMN #crisisOfCapitalism #FreedomRoadSocialistOrganization

Comunidades pobres y de clase trabajadora, ya azotadas por los cesos y reducciones dehoras de trabajo que resultan de la recesión económica, están a punto de sufrir aun mas como los gobiernos estatales y municipales empiezan a cortar los servicios de salud, escuelas y gobierno local, cosas necesarias para nuestras familias.

La recesión ha causado una caída grande en los ingresos de los estados. En Abril, las entradas de los gobiernos estatales mostraron una baja de 20% en comparación con el año anterior. Ademas, las pérdidas en la bolsa de valores ha obligado a algunos gobiernos locales y estales a contribuir mas a los fondos de jubilación de sus empleados. Esta baja en ingresos estatales ha causado que algunos estados han cortado programas y aumentado impuestos. Aquí en California, el deficit que se proyecta es de $25 mil millones, de un presupuesto total de $100 mil millones.

Los estados tambien se encuentran atrapados por la política federal de obligarles a cubrir mas de los costos de bienestar social, en términos de ayuda pública y cuidado de salud. Durante una recesión económica, la demanda para estas servicios aumenta (por ejemplo, el número de personas recibiendo ayuda pública ha aumentado por primera vez en varios años), pero los estados están recibiendo menos ingresos. Porque los estados tienen que balancear a sus presupuestos (cosa que el gobierno federal no necesita hacer) esto significa recortar programas precisamente cuando hay mas necesidad.

Algunos estados, como Missouri y Massachusetts, se han encontrado en una situación tan apretada como para haber necesitado que han demorado la entrega de dinero extra que pagaron los ciudadanos en impuestos. La legislatura de Oregon ha hecho recortes grandes en el presupuesto de las escuelas. El gobernador “Nuevo Demócrata” de California, Gray Davis, ha intentado balancear el presupuesto por medio de cortar servicios de salud para los pobres, cesar a los empleados estatales, pasando la responsibilidad de programas sociales a los condados, y usando dinero prestado, proveniente de los resultados de la demanda en contra de la industria de tabaco, y de distritos escolares.

Minnesota se ha encontrado en una situación presupuestuaria tan mala como para hacerlo recurrir a mecanismos de contabilidad tipo Enron, y con ataques a los servicios sociales. Esto significa que mas tarde este año va a haber una crisis aun mayor. Illinois planea atacar a los empleados públicos. La respuesta de los gobiernos estatales a las deficiencias presupuestuarias es sencilla. Los políticos intentan balancear sus presupuestos en los hombros de los pobres y los trabajadores. En este proceso los mas afectados son las minorías oprimidas.

La crisis de los presupuestos estatales tambien afecta a los municipios y los condados, quienes reciben gran parte de sus fondos del estado. Durante la última recesión, en 1991, California balanceó su presupuesto principalmente cortando los fondos a los condados, que hacían la mayor parte de los servicios sociales. Estas entidades ademas de muchas organizaciones no-lucrativas, se encuentran doblemente impactados, como sus ingresos se van bajando mientras que la necesidad para sus servicios se aumentan.

Por supuesto, si los políticos no fuesen títeres de las grandes corporaciones, sería posible balancear los presupuestos mentras que se mantenían, o hasta expandían, a los servicios sociales. Aqui en California, organizaciones de consumidores, de comunidades y sindicatos, juntos con algunos políticos locales, lucharon a favor de un aumento de impuestos en personas de alto ingreso. Pero la resistencia de la legislatura republicana y el gobernador demócrata paró a este esfuerzo. En vez de eso, el gobernador pretende aumentar los impuestos de cicarros y gasolina, mas imponer un pequeño aumento en los impuestos de ventas, lo que no afecta especialmente a los ricos que son los que pueden pagar mas.

La “guerra en contra del terrorismo” del presidente Bush y sus aumentos de las fuerzas armadas significan que el gobierno federal no da tantos recursos a los servicios de salud y escuelas. Esto aprieta mas a los presupuestos estatales y municipales, que pagan casi la totalidad de los costos de las escuelas. El gobierno federal tambien pudiera ayudar transferiendo mas dinero a los gobiernos estatales y locales. Lo mejor sería si el gobierno federal pudiera cancelar a los cortes de impuestos de los ricos que se implementaron el año pasado, o si rediciera al presupuesto militar. Pero aun sin pedir esto de parte de los político, el gobierno pudiera conseguir dinero prestado y transferir una parte a los gobiernos estatales y municipales, ya que no existe ningún requesito que el presupuesto federal sea balanceado.

Ahora mismo, muchos políticos están utlizando a la crisis del presupuesto para sacar ventajas para las elecciones de Noviembre. Aquí en California, el gobernador está amenazando de parar los cheques de ayuda pública y los fondos para servicios sociales si los republicanos no le aprueben su presupuesto. Piensa echar la culpa a los republicanos con tal de avanzar su campaña re-eleccionista. Los gobiernos municipales y de los condados se van a encarar con mas cortes presupuestuarios cuando se revisa al presupuesto al fin del verano. Los sindicatos y organizaciones comunales deben prepararse ahora mismo para resistir a los cortes de programas que nos acercan.

#EstadosUnidos #Analysis #BudgetCuts #BudgetCrisis #crisisOfCapitalism #welfare #healthCare #safetyNet #warOnTerror #militarySpending

Pero la realidad es que lo mas prosable es que 2002 traiga mas problemas para familias de la clase trabajadora en lugar de regresar al año próspero de 1999, como sueña Wall Street. Hay un problema fundamental: La larga jornada de prosperidad de los 1990 produjo el resultado de que en el mundo entero, industrias como de acero, autos, computadores, telecomunicaciones, etc. expandieron su producción mucho mas allá de lo que pueden vender con ganancias. Ahora esas corporaciones están cortando producción y cesando a cientos de miles de trabajadores.

El intento por parte del Banco Federal de Reserva de re-animar a la economía por medio de tazas reducidas de intereses, simplement no ha dado resultados. Mientras que las tazas de intereses de corto plazo han caido en este año (2001) desde 6.5% a solo 1.75% en comparación con 2000, las tazas para hipotecas de hogares quedaron casi iguales. Muchos negocios, tanto grandes como pequeños, encuentran que es muy dificil conseguir préstamos, no importa la taza de intereses.

El gobierno no ha podido, tampoco, estimular a la economía mediante cambios en sus politicas de impuestos y gastos gubernmentales. La primera fase de la reducción de impuestos instalada por el presidente Bush no hizo casi nada para aumentar los gastos del pueblo, ya que casi la todalidad fue ahorrado por hogares de ingresos altos y medianos que recibieron re-embolsos de impuestos. El presidente y el Congreso no pudieron ponerse de acuerdo sobre un paquete para estimular a la economía antes de Navidad, por razón de la mucha oposición que surgió en contra del plan de los Repbuulicanos de dar grandes concesiones presupuestuarias a las corporaciones y para adelantar los recortes de impuestos para hogares ricos.

Recesión mundial

En la mayoría de las recesiones en el pasado, el crecimiento fuerte de las economías de otros países hizo posible que se recuperara la economía norteamericana porque los otros países compraban mas mercancías y servicios de los Estados Unidos. Pero la actual receción afecta al mundo entero, con las economías de Alemania y Japón, la segunda y tercera economía en el mundo, también en recesión. La caída de miestros exportes tambien arrastra a nuestra economía.

Una recesión que continua el año que entra tambien aumenta las probabilidades de una crisis econónica de escala grande. Argentina ya se encuentra en medio de una crisis. Durante los últimos diez años, ha seguido las políticas económicas conservadoras impuestas por los Estados Unidos, de mercado libre y moneda fuerte. La Argentina ligó su dinero al dólar norteamericao y eliminó a las barreras de comercio internacional. El resultado: La industria argentina ha sido aplastada, el desempleo argentino se ha subido a 20%, y tanto la empresa privada como el gobierno han acumulado una deuda enorme en dólares. Luego el gobierno cortó los salarios, congeló a las cuentas bancarias, y al fin se apoderó de las cuentas de jubilación para intentar pagar sus deudas, pero en vano. Protestas masivas en contra de estas políticas le obligó al gobierno argentino que se renunciara.

Japón va rumbo rápido a una crisis económica. En los 1980, la fuerza industrial de Japón produjo una ola de prosperidad. Los precios de acciones y bienes raíces subieron al cielo mientras que las corporaciones se endeudaban grandemente para especular en estos mercados. Cuando se rebentó esta burbuja en los 1990, le fue necesario al gobierno japonés apoyar a la economía cada vez mas con gastos gubernmentales. Ahora el mismo gobierno está alcanzando al límite de conseguir préstamos y gastar dinero, mientras que las exporaciones japonesas están cayendo. La economía japonesa va de mal en peor.

El desempleo es mas que nunca desde la Segunda Guerra Mundial, se van aumentando las quiebras de corporaciones, y la banca acumula perdidas cada vez mas grandes en préstamos que no se pueden pagar. El Yen japonés va bajando en valor, trayendo en cadena amenazas a las economías de otros países asiáticos por la probabilidad de que los productos japoneses resulten mas baratos.

Hay cada vez mas señales que la economía de los Estados Unidos podría correr la misma suerte que la de Japón. Nuestra prosperidad económica de los 1990, aunque fue dirigida por empresas de alta tecnología, tambien fue construído por medio de medio de préstamos 'record' a compañías que deseaban crecer mas rapidamente. Ahora los Estados Unidos se encuentra en plena recesión y aquella deuda viene a perjudicar a la economía.

El derrumbe de Enron bajo una montaña de deudas puede ser el primer señal de una catastrofe que nos acerca. Enron representaba tanti alta tecnología con sus prácticas de comerciar en energética por medio del internet, hasta de miles de millones de dólares cada día, y la desregulación de la industria energética que era parte de la política conservadora del gobierno. Basado en Texas, Enron era la corporación que mas apoyo financiero daba a George W. Bush y había hecho much cabildeo a favor de la desregulación.

Pero Enron no era la única compañía que acumulaba deudas. Tras la quiebra de Enron, nos estamos enterando de otras compañías de energética y hasta de alta tecnología como Solectron que en encuentan en un estado raquítico por razón del doble golpe de recesión y deuda. Los bancos norteamericanos que le prestaron montón de dinero a Enron, van a sufrir perdidas enormes, cortando sus préstamos como resultado y afectando aun mas negativamente a la economía. Si la economía norteamericana emipiece a tambalear en 2001, lo mas probable es que el punto central de la crisis económinca no sea ni el “Valle de Silicon” ni de las Torres Gemelas, sino en Texas.

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Fight Back!: For months we’ve heard about the economic and financial crisis and how it’s playing out in the auto industry. The corporate media doesn’t report on what it means for workers.

Gregg Shotwell: I’m retired since November, 2008 but I’m in contact with workers. The peculiar situation now is the average worker has come to realize they are not just fighting the company; they are fighting the union and they are fighting the government. They really feel like everything is stacked up against them.

It’s become increasingly clear that the union has blocked the rank and file out of negotiations. So workers and retirees feel abandoned. They’re up against a three-headed dog: the union, the company and the government.

Most critically, in the last labor agreement that came out with Chrysler, workers didn’t have any information on the contract they were going to vote on until the day they were to vote on it, but they were told this: If you don’t pass this contract, the company will go into bankruptcy and then everything will be in jeopardy. So the workers were voting with a gun to their head.

In the contract, certain plants were guaranteed to stay open. As soon as the contract was ratified, Chrysler went into bankruptcy, and announced additional plant closings. After all the concessions they made, they still didn’t get any security.

But the worst thing and this is the most important part of what happened in this last set of negotiations, the union agreed that in 2011, when this contract expires, if they can’t settle the next contract, they agree to non-binding arbitration, and compensation would be set at non-union levels.

This is not a contract: this is a death warrant for the union. The union de-certified itself. There’s no longer any benefit to membership. If they agree in advance we will accept non-binding arbitration – this goes along with the no-strike clause. They’ve abrogated voting rights.

This is a moving target. In 2011, Toyota will have ratcheted down their compensation because they only set their level of wages at the union level to keep the union out. That’s no longer a threat to them any more. Now they can go back to workers in their factories that don’t have any union and say to them, “We going to have to cut a dollar or two an hour; we’re going to have to cut health care; we’re going to have to stop contributing to your 401k.” So by 2011, the average non-union wage is going to be that much lower than it is now.

So what the union has done is decertify itself as the bargaining agent for workers.

Fight Back!: Is there an initiative by any force to fight any part of this?

Shotwell: There is a lot of anger out there so there are opportunities. We’re seeing a lot of reactions – a lot of spontaneous activity right now, especially in the Detroit area and in Michigan, where Chrysler workers are demonstrating and picketing, demanding to keep their plants open.

The other part of the fight back is the potential for a broader movement. This crisis isn’t new, it’s just broader. We can go back and look at steel and rubber and textile and electronics and airlines and PATCO and Staley and say, “Y’know, they’ve been picking us off one at a time for years and years.”

But now everybody is impacted and there’s not a safety net for anyone, because if it’s not your pension it’s your 401k, or it’s that your house isn’t worth anything any more; or you’re forced to relocate but you can’t afford to uproot; or you’re losing your job or your pay is being cut; and it doesn’t matter if you’re a knowledge worker or a salaried worker or a laborer, everybody is in this position. Everybody’s angry and threatened and recognizing that these mechanisms and these organizations that were supposed to secure your life, are no longer valid. All the rules have changed. I think there’s a real possibility that we can have a much more united resistance because everyone is under attack, not just one industry or one union.

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While the official unemployment rate in September was reported to be the same as in August (6.1%), this was only because hundreds of thousands of people gave up looking for jobs while others had their hours cut, but were not laid off. If these so-called ‘discouraged workers’ and those working part-time because of poor economic conditions are included, the unemployment rate would be 11%.

Friday’s report on the labor market also showed that workers were out of work for longer periods of time, as the average length of unemployment rose by a week to more than 18 weeks. A fifth of all officially unemployed, or almost 2 million people, have been out of work for more than six months. It is no wonder that the number of people receiving unemployment insurance benefits is now over 3.5 million, up almost 50% from over a year ago. Still this is barely one-third of all unemployed, in part because many have run out of their benefits.

African Americans were again the hardest hit, as their official unemployment rate rose by almost a full percentage point in September, to 11.4%. If those who dropped out of the official labor force were counted as unemployed, the unemployment rate for Black workers would have been almost 13% in September.

To add insult to injury, the bailout bill was loaded with tax breaks for businesses, including one for makers of wooden arrows. There was relief from the Alternative Minimum Tax (AMT), where the biggest benefit goes to households earning $200,000 to $500,000. There was an expansion of federal deposit insurance from $100,000 to $250,000. This list could go on and on, but the bottom line is that there was nothing for the unemployed.

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The Mortgage Bankers Association of America (MBAA) reported that a bit more than three-quarters of one percent (0.78%) of all mortgages went into the foreclosure process in the three months ending in September. This was the highest level since the MBAA began reporting this statistic in 1972. In addition, 5.59% of residential mortgages were at least 30 days late, which was the highest since 1986. These numbers show that the housing market continues to worsen, as a perfect storm of adjustable rate mortgages resetting to higher rates, falling home prices, and a slowing economy batter home-buyers.

The problems in the mortgage market are spilling over into other credit markets, despite the Bush administration and Federal Reserve claims that they were ‘contained.’ Late payments for auto loans from finance companies and dealers rose to 2.77% in the April to June period, which is the highest since the recession in 1991. Many school districts, cities and counties in Florida were also swept into the growing credit crisis when the Florida State Investment Pool stopped withdrawals after almost half their deposits fled upon news that the pool held billions of dollars of investments backed by subprime mortgages. This left these local government without the cash to pay their bills and payrolls.

The Bush administration mortgage plan was worked out with big banks and mortgage lenders. It calls for subprime mortgages whose rates are resetting starting Jan. 1, 2008 until July 2010 to have the initial low rates continue for up to five years. However most homebuyers who are in financial trouble will not be covered by this plan. First of all, only homebuyers who have adjustable rate mortgages and poor credit will qualify. This covers a minority of homebuyers (45%) going into foreclosures. Homebuyers in this group who are already behind on their mortgages more than 60 days or in foreclosure are not covered. Also those who are deemed able to pay the higher rate are not included. Each mortgage borrower would have to negotiate their extension individually. With all these hoops to jump through, the California Greenlining Institute said that only 12% of subprime mortgages and 5% of oppressed nationality homebuyers would end up benefiting. Finally, the whole plan could be dragged out by lawsuits from investors who bought investments based on these mortgages.

One detail reported in the Wall Street Journal, but not in other newspapers, is that only subprime mortgages packaged into securities and sold to investors are covered by the plan, not loans made and held by banks. While mortgages made and held by banks are only a small part of the total subprime mortgages, this is another example of how the big banks who funded, processed and profited from the securitization of mortgages are being let off the hook.

Take, for example, the mess in Florida. Local governments want the state to guarantee their moneys in the State Investment Pool, while the state wants the local government to share the losses on investments. But nobody seems to be pointing their fingers at the big banks that set up the ‘Structured Investment Vehicles’ or SIVs that the state pool invested in. The banks should be forced to take over the SIVs and cover any losses to the local governments.

Tough times require tough solutions. The country is facing the biggest housing bust since the great depression of the 1930s. We know the Bush administration record on dealing with disasters from New Orleans after Hurricane Katrina. We can’t afford to let the Bush administration and their masters on Wall Street continue to propose band-aids while whole neighborhoods, especially poor, African American and Latino communities are engulfed in an economic disaster. What working people need is a New Deal on housing, which will put families and neighborhood needs over the greed of Wall Street.

We need a foreclosure moratorium of at least a year on owner-occupied homes together with a moratorium on evictions of tenants in foreclosed properties. During this time laws covering mortgages need to be fixed by banning prepayment penalties and putting a freeze on mortgages resetting to higher interest rates. We need to change bankruptcy laws so that they cover home loans and allow home buyers in financial distress to repay their loans at lower, fixed interest rates. Finally, owners of foreclosed properties must either maintain them or have them condemned and seized without compensation as financial, health and safety hazards to their communities. These condemned properties should be turned over to local governments who can sell some, rent out others or put them to some other use for communities.

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Republicans defended this move by pointing to the rapid growth of the economy from July to September of 2003, when production grew at an 8.2% rate, the fastest in almost twenty years. But during that same three months, the economy only produced a total of 77,000 new jobs – when a typical recovery would produce almost ten times as many jobs. In November, the Department of Labor report on unemployment showed that more than 2 million people, or almost one out of every four unemployed, had been without work for six months or more, the highest fraction in more than twenty years. The unemployment rate, at 5.9%, was actually higher in November than it was when the extended unemployment benefit program was first passed in March 2002.

What is really behind the Republicans’ decision is their thinking that unemployment benefits keep people from taking the low-paying jobs. Republican Senator John Ensign of Nevada said, “The more generous the benefit, the easier you make it to stay on unemployment insurance, and the less incentive you have to actually go out and do what it takes to find a job.”

While the Republicans have to cut unemployment benefits in public, private businesses are evading their unemployment insurance taxes to the tune of hundreds of millions of dollars. Many employers are calling their workers ‘independent contractors’ to avoid unemployment insurance taxes, costing workers their benefits if they are laid off. Employer errors also led to underpayment of more than a billion dollars in benefits to jobless workers in 2002.

In the last two years, New York, Texas, Minnesota, Missouri, Illinois and North Carolina have been forced to borrow from the federal government when their state benefits funds ran out of money. Businesses have pushed for lower taxes, and now that the funds are running out of money, they want to cut unemployment benefits. Here in California, the state will have to borrow over a billion dollars to cover unemployment benefits in 2004. Business leaders are pushing to stop a $40 a week increase in benefits, which they say are too high, even though the average benefit is only $236 a week. While this is more than what most other states pay, California has one of the lowest benefits when compared to average wages (not to mention the cost of living).

The cuts in unemployment benefits are part of a larger plan to slash and privatize government services and the safety net. First came welfare ‘reform’ in 1996, and now the Medicare ‘reform’ which opens the door to privatization using the promise of expanding drug coverage. The Bush administration still wants to privatize social security, public education and the Post Office.

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These reports also showed that the African American and Latino communities were the hardest hit. One million of those who fell below the poverty line were African American or Latino. Latinos and African Americans also lost the most in terms of their money incomes, which fell 3 to 4%, as compared to less than 1% for whites.

African Americans not only have the highest poverty rate (24.1%), but also had the largest increase in poverty last year. It is no surprise that the African American community has been hardest hit by the recession, as they are historically the ‘last hired and first fired.’ The loss of millions of manufacturing jobs has hurt African Americans especially hard, since Black workers rely the most on these jobs to achieve a better lifestyle. The Bush administration, along with some Democrat misleaders, is trying to blame China for the loss of U.S. factory jobs. But it is the big U.S. corporations, who move their production to wherever they can find cheap labor, who are to blame.

Latinos – many of whom work in low wage jobs without health benefits – have the most uninsured, with almost one-third (32.4%) not having health insurance, as compared to only 10% of whites. Fewer jobs are offering health insurance benefits; while others have raised the workers’ contributions so high that insurance is no longer affordable. Other workers who had jobs with health insurance have been laid off, and have had to take temporary or low-paying jobs without benefits.

These Census reports actually understate the suffering of the working class and oppressed nationalities. The poverty rate hides the true extent of poverty, since a family of three had to earn less that $14,500 to be counted as ‘poor.’ But to meet basic needs, a family of three needs at least $25,000 to get by. The fall in income is also understated, as the fall in income per person was 1.8%, much larger than the reported fall in household income. Finally, the number of people without health insurance only counts those who had no health insurance for the entire year. Three out of four people who lose their health insurance do so for less than a year, and would not be included. Thus, the number without health insurance at any one time is much more than the 15% of the total population, or almost 45 million people, reported.

Meanwhile, Forbes magazine just released its list of the 400 richest individuals. Their wealth rose 10% over the last year, to nearly $1 trillion dollars, or an average of $2.5 billion dollars each! At the same time, the number of millionaires increased 14%, and is at a twenty-year high! This just continues the trend of the rich getting richer while most of the rest of us slide back. The gap between the rich and the poor doubled between 1979 and 2000, with the richest 1% of the population having more after-tax income than the bottom 40%. Huge gains in executive pay, like the $140 million paid to the New York Stock Exchange’s Grasso, and tax cuts for the wealthy – thanks to Reagan and George W. Bush – contributed to the rise of the rich.

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