US Working Class Face Greater Struggles as Economic Bubbles Continue

The US working class have taken another round of austerity, with cuts in subsidized housing (HUD Section 8), early childhood education (HEADSTART), food subsidies (SNAP) and long-term unemployment benefits.  The US Federal Reserve, however, continues to give tens of billions of dollars each month to the nation's largest banks, through its quantitative easing program.

Meanwhile, bubbles and budget shortfalls persist in healthcare, higher education, the military-industrial complex,and the financial system, including pensions and retirement programs.   Working class people of all ages continue to adapt to this predatory economy by working harder and making financial sacrifices.  The same cannot be said for those in power. 

sources:

http://www.wnct.com/story/23632423/section-8-housing-suffers-from-budget-cuts-sequestration-and-shutdown

http://www.usatoday.com/story/news/nation/2013/08/19/stateline-head-start/2671309/

http://www.theguardian.com/world/2013/dec/24/food-stamps-programmes-cuts-working-americans-texas

http://www.washingtonpost.com/opinions/eugene-robinson-unemployment-benefits-the-cruelest-cut-of-all/2013/12/30/511c57e2-7198-11e3-8b3f-b1666705ca3b_story.html

http://www.occupy.com/tags/quantitative-easing

http://www.marketwatch.com/story/10-explosive-bubbles-that-will-kill-capitalism-2012-07-03

Stock Market High...and Worker Lows

US workers continue to suffer as elites consolidate even more power and money.  The US Treasury and the Federal Reserve continue to funnel money into the big banks through Quantitative Easing (QE).  In this scheme, banks are overpaid for their toxic assets.1

On the worker front, about 50 million people in the US continue to rely on SNAP (aka foodstamps) to get by.  Youth continue to have difficulty in finding work, and many are feeling depressed and suicidal.  Work hours are also being reduced by some corporations to skirt the Affordable Care Act.2  At the time of this writing, Republicans and Democrats are discussing austerity measures that are already hurting low income workers and their families.3

Sources:

1.http://www.slate.com/articles/business/project_syndicate/2013/03/quantitative_easing_all_your_questions_answered.html
2.http://www.huffingtonpost.com/c-cryn-johannsen/student-loan-debt-suicides_b_1638972.html
3.http://www.policymic.com/articles/29299/sequester-2013-sequestration-cuts-will-have-a-devastating-impact-on-america-s-poor

What We Knew Already: US Working Class Decimated By "Free Market" Economics

According to the US Census, US median wealth declined 38% between 2007 and 2010. While some working class people may have recovered economically since 2010, few have been untouched by structural changes. As we have noted in previous posts, inequality has been increasing in the US since the late 1960s and working class wages have been stagnant. The so-called middle-class adapted to structural changes by having smaller families, going to college and borrowing money for housing, education, and medical costs. But in 2007, the first bubble burst and the financial and housing foreclosure crisis ensued. In response, neoliberals and neoconservatives responded by bailing out large banks, investment firms and insurance companies (2008-2009) then calling for austerity at the federal, state, and local levels (2010-). "Banks" have consolidated power while the working class remain in peril.

US Supreme Court Reinforces Slow Descent Into Fascism

On April 2, 2012, the US Supreme Court upheld the rights of police and jailers to strip search Americans for the smallest offenses. Florence v. County of Burlington is only the latest judicial decision or law limiting the rights of the People. Recently, the US Congress also passed HR 347, a law criminalizing the disruption of government meetings.


Source:
http://www.nytimes.com/2012/04/03/us/justices-approve-strip-searches-for-any-offense.html?_r=1

http://www.guardian.co.uk/commentisfree/cifamerica/2012/apr/05/us-sexual-humiliation-political-control

Unemployment and Income Numbers Fail to Illustrate US Worker Struggle

The official (U3) unemployment rate is increasingly becoming irrelevant in explaining the employment picture. Note the gap between U3, U6, and Shadow Stats Unemployment.

Behind the numbers: young unable to enter the market and others unable to reenter the market in a meaningful way. So many stories on our travels of the "flexible workplace": an architect selling luggage at Macy's, a woman having to take a retirement or face layoff, adjunct profs with little pay and no benefits, the state worker downsized and doing the same job for less as a contractor, college grads who cannot find work that can pay off their student loans.

The mainstream media tends to use income rather than wealth as an indicator of equality and economic health. But wealth, the accumulation of assets minus debts, gives us a bleaker picture, as tens of millions of people owe large amounts on their homes, student loans, and consumer loans. In 2007 the average wealth of the bottom 40% US residents was only $2200; imagine what the numbers must be in 2012.

For women and people of color, the decline of wealth is more stark. African American families now only have 5 cents in wealth for every dollar that a white family owns; the median income of African American single women is $100.

People Resist Corporate Destruction of Democracy, Environment, and Social Safety Net

Workers continue to fight for economic and environmental justice. However they have taken lots of hits lately. The American Legislative Exchange Council (ALEC), a nonprofit corporation, continues to provide model legislation to politicians to undermine progressive efforts.

Meanwhile, at least 25 large United States corporations paid more to their CEO than they did to the US government in taxes.1 According to the AFL-CIO "In addition to handing their CEOs big dollars, 20 of the 25 corporations in the study spent more on lobbying lawmakers than they paid in corporate taxes.

Vital organizations like the US Red Cross and the US Postal Service have been downsizing--with threats of more layoffs. Verizon communication workers protested after the corporation refused to bargain in good faith--and called for drastic cuts in pay and benefits.

As for government programs, homeless prevention programs and affordable housing budgets face drastic cuts.2

In environmental news, the Obama administration has decided to table progressive ozone legislation. They also appear to have given a green light for corporations to construct the Keystone Pipeline, transporting processed tar sands from Canada, across one of the largest US aquifers. More than 1200 people have been arrested outside the White House to protest the environmental injustice.3


Sources:

1. http://www.nytimes.com/2011/08/31/business/where-pay-for-chief-executives-tops-the-company-tax-burden.html

http://blog.aflcio.org/2011/08/31/ceos-rake-in-more-than-their-corporations-pay-in-taxes/

2. http://sfbayview.com/2011/housing-authorities-prepare-for-section-8-housing-cuts/

3. http://www.tarsandsaction.org/press/

Rich Continue to Consolidate Wealth and Power

American Injustice continues to gather reports showing a continuing consolidation of power by the US elites. The top 400 US families now own as much as the bottom 150,000,000 citizens.1 Meanwhile, the top 10 "banks" (Bank of America, JP Morgan Chase, Citibank, Wells Fargo, Goldman Sachs,Morgan Stanley) hold $11 trillion in assets or about 84% of all US bank assets.2 Two years ago, Bank of America and Citibank were on the verge of collapse, until they were bailed out by the US government.


Sources:

1.http://www.politifact.com/wisconsin/statements/2011/mar/10/michael-moore/michael-moore-says-400-americans-have-more-wealth-/

2. http://www.mybudget360.com/banking-mammoths-top-10-us-banks-have-11-trillion-of-13-trillion-in-total-banking-assets/

Macroanalysis: Trillions of Dollars Transferred From Working Class to Banks

US workers have been paying the price for corporate malfeasance--to the tune of $8,000,000,000,000 in home equity from 2006 to 2010. Note that while home equity decreased precipitously, residential mortgage debt (in red) did not decrease. Workers also continue to face mass evictions, job loss, and reductions in pay and benefits, while large corporations make record profits.

Workers Continue Class Struggle

US workers have faced several recent losses. In Dukes v. Walmart, the Supreme Court ruled against more than a million women workers who have faced gender discrimination at America's largest corporate employer. US Postal Service employees also lost all employer contributions to their pensions. And in the states, public service employees, including teachers, face layoffs and reductions in pensions and health benefits. Workers, however, continue the class struggle. In New Jersey, thousands of public service employees protested drastic benefit reductions. The losses were particularly discouraging given that both houses of the New Jersey Legislature are held by Democrats. Although the anti-worker bills were passed, protesters vowed they would "remember in November."

Workers Resist in Wisconsin

Public employees are increasingly feeling the pressure as states and municipalities face budget shortfalls--shortfalls created by neoliberal politics and economics. In Wisconsin, the Governor has used a slight budget deficit(created by tax cuts) as an excuse to declare ending collective bargaining for most public service employees. Wisconites and workers throughout the US are resisting these attacks on collective bargaining rights.

Workers Suffer World Wide, Continue to Protest in Greece

Today the US stock markets and markets throughout Europe plunged. Working-class observers suggest that increased volatility in the markets signal more manipulation of the markets--and some wealthy investors profiting from the panic.1 In Greece, workers continue to protest austerity programs to service its debt to Western European powers.2 Neoliberal policies in other European nations have put other working-class people in peril, including people in Portugal, Spain, Italy, and Ireland.3 Conditions for workers worldwide have deteriorated to starvation levels, particularly in India, where food prices have increased more than 20%.4 In the US, British Petroleum's oil spill near Louisiana may be the largest ecological disaster in the nation's history, threatening to create increases in gas prices and sea food, while destroying the seafood industry in the area.5

Sources:
1. http://www.nytimes.com/2010/05/07/business/07markets.html?hp
2. http://www.timesonline.co.uk/tol/news/world/europe/article7116511.ece
3. http://www.spiegel.de/international/europe/0,1518,677214,00.html
4. http://news.yahoo.com/s/ap/20100430/ap_on_re_as/as_india_going_hungry
5. http://wcco.com/national/oil.spill.Louisiana.2.1666005.html

Goldman Sachs Continues to Profit from Global Downturn

Lloyd Blankfein, CEO of Goldman Sachs (Source: UK Guardian)


The US Senate Governmental Affairs Subcommittee held hearings today examining the role of Goldman Sachs in the banking crisis. There were great theatrics as Senators Carl Levin and Claire McCaskill grilled Goldman executives about how GS employees sold junk stocks and derivatives to their clients.

The hearings sound very much like the testimony by Enron executives involved in undermining the energy industry. Unfortunately, many politicians, Democrats as well as Republicans, are beholden to Wall Street, and working-class people are skeptical that any politicians are looking out for them.

GS has also been implicated in hiding problems in Greece's economy. Greece appears to be close to bankruptcy, along with several other European nations, including Portugal, Spain, and Ireland. In 2008, Goldman was heavily involved in oil futures as prices rose and fell--and they, along with JP Morgan, were implicated in manipulating the markets.

In other stories, there is more rumbling on the Chinese real estate bubble as capitalism runs rampant there and the wealthy squeeze out more surplus value from their workers.

Sources:
(1) http://www.c-span.org/Watch/Media/2010/04/27/HP/A/32230/Senate+Hearing+on+Goldman+Sachs+the+Financial+Crisis.aspx

(2) http://www.spiegel.de/international/europe/0,1518,676634,00.html

(3) http://motherjones.com/kevin-drum/2010/04/chinas-housing-bubble

2009: The Year in Review

It has been another difficult year for the working class. While the top wealth owners consolidated ownership, the working class saw declines in wages and employment. The gap between rich and poor continued on its 40-year path towards greater disparity. The US health care bill, which appears to be close to passing, grants greater power for the powerful medical-industrial complex. The US also continues to be involved in military occupations in Iraq and an escalation of violence in Afghanistan. The drawing above, from 1911, reflects the hegemony of capitalism which is still visible nearly a century later.

Goldman Sachs and the War on the Working Class

Goldman Sachs (GS) continues to consolidate power on several fronts, by pushing working-class people out of their homes, and by sending a 29 year-old former executive to the Securities and Exchange Commission (SEC) as another major player in the US government.

In 2006 GS sold $2 Billion in bonds to European investors through a Cayman Islands shell corporation, Altius III Funding Ltd. The bonds were bundled real estate and student loans made to appear as safe investments. Shell corporations such as Altius have been used to avoid taxes and oversight. From 2006 to 2007, GS sold more than $57 Billion in high-risk mortgage-based securities packaged as low risk bonds. The corporation, however, was left holding billions more in mortgage loans.1

With billions in toxic real estate investments remaining, another GS subsidiary, MTGLQ, is now removing people from their homes without negotiating substantively with homeowners.2

On October 16th, Former GS executive Adam Storch, a former Vice President at GS has been appointed Chief Operating Officer of the SEC's Enforcement Division. Former GS CEO Henry Paulson was the US Treasury Secretary from 2006 to 2008 when the US economy began its dramatic downturn.3


1. http://www.cleveland.com/business/index.ssf/2009/11/goldman_sachs_left_foreign_inv.html
2. http://www.miamiherald.com/news/nation/story/1311587.html
3. http://www.huffingtonpost.com/2009/10/16/adam-storch-sec-hires-exg_n_323526.html

Frontline Episode Shows How Neoliberals Enabled Economic Collapse

Frontline's latest episode called "The Warning" presents information on the history of over-the-counter credit derivatives and Brooksley Born, the head of the CFTC who cautioned that these unregulated financial instruments (over-the-counter derivatives) created a major risk for the economic markets. According to the Frontline sources, Alan Greenspan reportedly said he did not favor prosecution of fraud in this market that grew to $596 Trillion in derivatives. When Born decided to prosecute anyway, she was marginalized by FED Chairman Greenspan and Clinton Treasury officials Robert Rubin and Larry Summers. The episode also notes that Timothy Geitner, now the US Treasury Secretary, was also part of the male-dominated neoliberal contingent.

Source:
http://www.pbs.org/wgbh/pages/frontline/warning/

Banks Continue Assault on Working Class

The working class continues to be assaulted on several fronts. While many of its sons and daughters are pawns in the economic draft for US imperialism, working class people have also faced a chronic economic malaise. Law professor Elizabeth Warren notes, the middle-class have been hollowed out:

"So you've got, effectively, flat income in this time period with rising core expenses; housing; health insurance; child care; transportation, now that it takes two cars to get everywhere, two jobs to support; and taxes, because you've got two people in the workforce and we have a somewhat progressive taxation system. So that families are spending a lot more on what you describe as the basic nut."1

As Warren notes, the neo-liberal elite have been bailed out while the working class face greater vulnerability. As my time line indicates, this war on the working class has been systemic and lengthy. Sometimes the injuries are from a thousand cuts, such as the recent plan of Bank of America and Citigroup to begin charging annual fees to customers who pay off their credit card balances each month.2


1. http://www.washingtonpost.com/wp-dyn/content/article/2009/10/08/AR2009100800778_2.html?sid=ST2009100800781

2. http://www.chron.com/disp/story.mpl/ap/business/6669772.html

US Empire Engaged in Murder Suicide

The US continues to occupy Afghanistan, with no exit strategy and no final objective. Historians note that the area is littered with the remains of the Macedonian, Mogul, British and Soviet empires who suffered great losses in their occupations. MSNBC reports that a significant majority of the warriors are not "Taliban", but a variety of recruits from the area and elsewhere (Chechnya, North Africa, Pakistan) sympathetic to the cause of pushing out the US Empire.1

In the meantime, US and NATO occupying soldiers are caught in the dilemma of killing civilians or facing death themselves as they help support corrupt governments there and in the US. To make matters worse, the US occupation exists between India and Pakistan, two nuclear rivals.3

According to former NATO Commander General Dan McNeill, 400,000 troops would be necessary to control Afghanistan. Others estimate that a much larger force, perhaps 660,000 troops, would be needed to secure the area.2 Currently there are about 100,000 US and NATO soldiers there and the Afghan military consists of about 190,000 soldiers. Canada plans on removing its 7500 troops by 2011.4

Sources:
1. http://www.msnbc.msn.com/id/33256784/ns/world_news-south_and_central_asia/
2. http://online.wsj.com/article/SB10001424052970204908604574336402390524212.html
3. http://www.cfr.org/publication/17474/indiaafghanistan_relations.html
4. http://www.presstv.ir/classic/Detail.aspx?id=108284§ionid=351020701

From Phantom Wealth to Real Wealth

Rep Marcy Kaptur Urges Working-Class People to Stay in their Homes

Is non-violent resistance necessary to enable democracy in the US? Bill Moyers interviews Ohio Representative Marcy Kaptur, a brave woman who has told her constituents to squat in their foreclosed homes. Banks such as Wells Fargo, BOA, and JP Morgan Chase continue to prey on working-class people as the housing crisis continues. In the Moyers interview, Rep Kaptur also says that Tim Geitner and Larry Summers are incapable of creating the changes necessary to fix the system and that President Obama needs to replace these shills for the banking industry.

Source: http://www.pbs.org/moyers/journal/10092009/profile.html

Elites' Solution for Working-Class Medical Care: Don't Get Sick

US Congressman Alan Grayson has apologized to the 45,000 or so Americans and their families who die prematurely due to lack of medical care. It appears that the US will continue to be perhaps the worst post-industrial nation in terms of health care--and yet the most expensive. The biggest winner in this neoliberal lottery appears to be the insurance companies, who either maintain the status quo of overcharging and rescission or profit from an additional 30 to 40 million customers if the health care bill passes.