As people in the U.S. slog through yet another El Niño-fueled winter of hundred-year storms, an even bigger storm is brewing.
For the last four years, a kind of economic Katrina has been unfolding, sweeping away home ownership and demolishing hopes for a comfortable retirement or a college education. Workers have been battered by unemployment, the housing crisis, a loss of public services due to cutbacks, attacks on our rights, and rising costs for everything from clothes, gas, and groceries to the chocolate we need to deal with the stress of it all.
In fact, of the 13 recessions since the Great Depression of 1929-33, none has been as deep or persistent as the current one. While the official unemployment rate hovers around 10 percent, it is nearly twice that rate for people of color and even higher among youth.
Five million people, meanwhile, have lost their homes to foreclosure. Many more are just a few missed paychecks away from defaulting on their mortgages.
Adding insult to injury, not one Wall Street bigwig has gone to jail for helping to engineer the financial meltdown.
Home ownership: a losing proposition. The current housing crisis, which has disproportionately harmed people of color, has its roots mainly in massive fraud perpetrated against these same folks by the mortgage industry.
Not only were homeowners sold loan packages without full disclosure, loans were made to people who were at a higher risk of defaulting, at a much higher interest rate. These were known as subprime mortgages. When people started to default on these loans, it started a cascade of business bankruptcies and layoffs. This in turn led to more defaults on more home loans, resulting in the foreclosure mess.
As if the foreclosure numbers weren’t bad enough, 27 percent of homeowners are now “underwater”: they owe more than their homes are worth. Those willing to relocate for a job often find they can’t afford to sell their home, which compounds the unemployment problem. And with banks stonewalling those who try to fight foreclosure, many homeowners feel they have no choice but to quit making their payments and just walk away from what has become a nightmare.
The transfer of wealth from working people to Wall Street banks as more and more homes were foreclosed has been called the greatest transfer of wealth from one class to another in U.S. history. The average household’s real wealth has declined by 20 percent in recent years.
Where are the jobs? In spite of trillions of dollars spent on the much-touted “recovery,” employment numbers remain stagnant. President Obama has lately seemed more and more serenely out of touch with the average worker as he crisscrossed the country talking about developing wind power, high-speed rail, and nuclear power (!) as cures for our economic woes.
Unemployment statistics scarcely tell the whole story. For workers who have been jobless for six months the prospects are particularly grim. If they do find work, it will most likely be part-time or involve a cut in wages, since the new jobs created in the last year pay significantly less than those lost.
Some workers will remain jobless and become homeless. Meanwhile, others are holding down two or three jobs just to keep food on the table.
At first during this recession, women lost fewer jobs than men did. Now, though, women in predominantly female occupations such as teaching and nursing are increasingly losing ground as public workers are laid off.
The system is not creating jobs even at a rate to keep up with population growth, meaning long-term unemployment is here to stay.
In fact, to get the unemployment rate down by 3 or 4 percent by 2014, the system would need to create over 300,000 new jobs each month.
A tragic domino effect. The situation for poor and working people has become even more dire as state and local budgets collapse.
Revenue has fallen drastically due to the recession and a 30-year policy of tax cuts for corporations and the rich. The results have been more hemorrhaging of jobs and cutbacks in everything from library hours to park maintenance and physical and mental health services.
People may lose access to medical treatment because the services have entirely disappeared, because government support for those in financial need has been cut off, or because they have lost their jobs, and with them their insurance coverage.
And healthcare could not be lost at a worse time. The increased stress of all this turmoil is no laughing matter. A recent study of unemployed adults found they were twice as likely as those who are employed to have thoughts of suicide. Nationally, calls to suicide hotlines have increased by over a third in the last year.
The winds of change. Recent events in Wisconsin demonstrate that working people are not in a mood to grin and bear it. As the global crisis of capitalism continues, people everywhere are beginning to fight back.
The Freedom Socialist Party (FSP) has put forward a 10-point program to address the current economic crisis. It includes demands to redirect war spending into social services and tax the rich to close the budget gaps. To achieve universal employment, it also calls for a mass public works program and for reducing the standard workweek to 30 hours with no cut in pay.
Radical but completely logical demands like these are essential if resistance by working people is to succeed in winning change and making life livable. When a disaster of this magnitude strikes, there is no use in talking about half measures.
Send feedback to Sukey Wolf at firstname.lastname@example.org.