In less than a year, the U.S. government has thrown over one trillion dollars at the big investment banks and insurance companies. Imagine that: one trillion dollars. It is hard to fathom. Twelve zeros after that one. $1,000,000,000,000. Count those zeros: twelve. That’s a lot of money.
With that kind of money put to good use, the U.S. government could have covered all out-of-pocket medical expenses for everyone in the country for seven years. With that kind of money, the U.S. government could have finally rebuilt New Orleans and the Gulf Coast and given every working American a $3,500 cash bonus.
The bailouts may have stabilized things in the markets for a few moments, but possibly not for long. For instance, one of the big banks that was given a chunk of change separate from the $700 billion package was AIG. This predatory lender has been given $143 billion; they’ve already spent $90 billion, and executives continue to get ridiculous compensation. The housing speculators who helped to create this crisis are being rewarded for their greed. This shows that the bailout was not attached to any sort of accountability or real democratic oversight.
Yet, after all this money has been thrown at finance, the markets are still in chaos and the crisis threatens to spread further throughout the world economy. The market volatility index is at 80% as we reach November. Any index rating above 50% is considered “financially dangerous.” In the past year, there has been an increase in unemployment of 2.8 million people (Bureau of Labor Statistics), and over a million people have lost their homes.
Recent figures show a decline in both the Gross Domestic Product and consumer spending, and house prices continue to decline. Workers do not have enough income to continue to prop up the economy. We are in a recession, and the financial decline is likely to last for years.
The recession means that the corporate and Wall Street masters will be trying to cut working hours, provide less in wages, lay people off, and resort to cutting corners that will force us to work harder and sometimes at greater personal risk.
The System Causes Crisis
Recessions are built into the framework of the capitalist system. Big business makes more money by paying workers less. So over the past 20 years, good union manufacturing jobs have been shipped off to Mexico and China as the big companies search for cheap wages.
Legislation like the North American Free Trade Agreement (NAFTA) under Clinton in 1994 helped to exacerbate this global race to the bottom in workers’ wages. Since then, millions of jobs in heavy industry have been lost.
The jobs that have been created over the past 20 years are overwhelmingly low-paid work. For example, the anti-union Wal-Mart has become the biggest employer in the country. The big companies aren’t creating good jobs in the real economy. Now, the super-rich want us to pay for their system.
States and cities throughout the country face debt and budget cuts. Hospitals and services for the blind are on the chopping block in Massachusetts. Education cuts are forcing larger class sizes in other parts of the country. Libraries, elderly care, community centers, and other public services will be attacked by corporate politicians throughout the nation.
Who Should Pay for This Crisis, and How?
Handouts to the big banks and companies do not provide real jobs or benefits for working people. We need the type of economic growth that affects our day-to-day lives. The “boom” of the Bush era saw a decrease in living standards for many working-class people.
We need spending and economic growth, but not the kind that only benefits corporate greed. We need a massive public works program to improve schools, healthcare, and transportation. We need union jobs to develop alternative energy and rebuild our infrastructure. We need quality public childcare and improved affordable housing. We don't need more handouts to some of the richest people in the country.
The money is there to pay for jobs and services. The big financial institutions and the super-rich should be taxed heavily. The wars in Iraq and Afghanistan should be stopped. The failed banks and companies should be taken into public ownership under democratic workers' control. This would free up billions, indeed trillions, of dollars to meet the needs of ordinary people.
In order to get jobs and services, we have to fight for them. The labor movement in the 1930s organized massive sit-down strikes, community support rallies, and protest organizations of the unemployed. Good jobs, better services, and more rights on the job were won through these battles.
We need to get organized to resist the coming attacks. Unions and community groups have the potential resources that could be used to build real fighting movements that challenge corporate greed with strikes, mass actions, and direct resistance.
Workers make society function by producing all the goods, distributing everything, and providing all the services in society. The big company executives don’t drive the buses, trains, and trucks that keep America moving. The politicians don’t teach our kids, clean the floors, and take care of the sick. We have the potential power to make things better. Bosses and politicians only make things worse.
We can struggle to win a better life instead of this potentially bleak future, but we have to be organized at the grassroots and our leaders have to be willing to fight for our needs. If this system, capitalism, can’t afford to guarantee us jobs, heat, and homes, then we can’t afford their system!