(reposted from the People’s Tribune, March 2009)
Over the past year, more than 2.2 million homes have been lost to foreclosure, a record number. Some four million jobs have vanished, and jobs continue to be lost at the rate of about 650,000 a month. One American in three has suffered a job loss or a pay cut in their household. Those once stably employed are becoming destitute, and those who were already destitute are dying.
The question on everyone’s lips is, what is our government doing to stop the ongoing economic catastrophe that threatens us all? What should it do? Where do the interests of the people lie?
As this issue of the People’s Tribune goes to press, President Obama has signed an economic stimulus bill which, we’re told, will create or save a few million jobs and expand public assistance to the unemployed, among other things. The government is also pondering how best to bail out the banks, arguing that helping the banks will restart the flow of credit and help get the economy going again. And the administration announced a $75 billion foreclosure-prevention plan that it says could help up to nine million homeowners keep their homes.
We should be on guard. We should ask ourselves, what actually needs to be achieved? The end result of the government’s intervention should be to guarantee the necessities of life for anyone who is doing without them. If this isn’t happening, then we need to demand that the government do what is right.
The underlying cause of the crisis is that more and more production is carried on with less and less labor, because of the introduction of labor-replacing technology into the economy. This technology has wiped out jobs and driven down wages for those still working. Because people with low wages or no jobs buy less, the market for goods and services is being wiped out. As the market has been undermined, the economy was kept going with debt – the massive extension of credit to workers and businesses. Credit was also used to fuel a huge orgy of speculation in stocks, bonds, credit default swaps, mortgage-backed securities and all sorts of exotic financial instruments that really had no value. On a temporary basis, this speculation brought huge profits to the financial sector.
This house of credit, debt and speculation has been standing on a “real” economy that has been hollowed out by labor-replacing technology. Eventually the debt-based bubble had to burst, and now that it has, the real economy is falling to its true level.
In the short term, what is needed is to nationalize large parts of the economy, such as the banking system, in the interest of the people, not the corporations. We should be nationalizing the assets of the corporations—not their risks—and putting those assets to work in such a way as to guarantee every person has access to housing, health care and the other necessities of life.
In the longer term, we are going to have to decide whether we’ll have a society that serves the majority of the people, or a society organized to serve only the wealthy few. Either the people are going to have to take the corporations over and run them in society’s interest, or the privately owned corporations will decide whether the rest of us live or die. This is the ultimate question we must answer.
(Image courtesy of the People’s Tribune)