Detroit community residents and organizers came out to defend the home of Rubie Curl-Pinkins who was facing foreclosure by Bank of America. This demonstration was held on July 18, 2008. (Photo: Alan Pollock).
Originally uploaded by Pan-African News Wire File Photos
By Fred Goldstein
Published Jan 15, 2009 9:01 PM
The intensifying capitalist crisis, which is bringing greater and greater suffering daily, is leaving the workers and the oppressed with no alternative but to organize a fightback. The deadly waves of unemployment, foreclosures, homelessness, hunger and repression are spreading while the ruling-class politicians and experts debate over the terms of the so-called “stimulus package.”
With 533,000 jobs lost in December, official unemployment went up to a 16-year high of 7.2 percent. The annual job loss for 2008 was over 2.59 million, the highest since World War II. The rapid rate of layoffs has brought the official number of unemployed to 11.1 million workers.
Unemployment of Black men over the age of 20, which was already officially double-digit, jumped from 12.1 percent to 13.4 percent in December. For African-American youth from 16 to 19, the figures were a staggering 32.2 percent rising to 33.7 percent in the same month. White youth unemployment also rose to 18.7 percent.
The rarely published figure of “total unemployment” grew from 12.6 percent to 13.5 percent. Total unemployment includes those workers forced to take part-time work who need full-time jobs as well as workers who are known to have become so discouraged that they have stopped looking for work.
The average number of hours worked was down to 33.3 in December, the lowest since these records were first kept in 1964.
The most important aspect of the December figures is that December is usually a month of increased hiring, even during slow times, as retailers gear up for holiday sales, manufacturers put on additional workers to fill rush orders for inventory, and the restaurant and entertainment industries have higher sales.
Instead, December saw the biggest decline in retail sales since record keeping began in 1970, despite price-slashing sales of 50 to 70 percent off and buy-one-get-one-free offers. The International Council of Shopping Centers estimated that 148,000 retail stores shut down in 2008. It projected that another 73,100 retail stores will shut down in the first six months of 2009. The closures would result in the loss of 625,000 to 800,000 retail jobs. (Washington Post, Jan. 9)
‘Stimulus program’ smaller than a band-aid
Considering the catastrophic wave of unemployment, with at least 20 million jobless or severely underemployed right now, and the prospects for a massive increase in the coming period, all the speculation about whether the “stimulus package” will add 3 million or 3.5 million jobs over the next two years seems utterly inadequate.
The government figure of 11.1 million unemployed, or 7.2 percent, is based upon a workforce of 154 million. The more realistic “total unemployment” figure cited above of 13.4 percent equals 20.6 million, according to the government.
Furthermore, the stimulus package now being projected amounts to $775 billion. Of this, 40 percent is in tax cuts, which are not necessarily going to create jobs. And, worst of all, 90 percent of the spending is to go to private capitalists. So it is largely a handout to the capitalists in the hope that they will create enough jobs.
With all the talk about studying the New Deal, this program takes an opposite approach to that of the Roosevelt administration. While the New Deal was purely a band-aid, filled with limitations and flaws and calculated to save capitalism by preventing a mass uprising of the workers, the Works Progress Administration (WPA) nevertheless provided direct jobs to 8 million workers during the decade, or one-fifth of the workforce. At any given time, anywhere from 2 million to 3 million workers were employed by the government in these programs—the equivalent of 9 million to 10 million today.
The present plans for government spending set up a situation in which some 20 million unemployed workers will have to compete for 1 million to 1.5 million jobs in the coming year—assuming that the job creation projections are anywhere near correct. Such a situation in which workers are desperately seeking scarce jobs will tend to lower wages, set worker against worker and help the bosses.
The workers should of course take advantage of any opportunity to get new jobs created to help feed themselves and their families. But they must not sit back and let the economic “experts” in Washington and Wall Street dictate the terms of the economic package. They must get organized to impose their own economic demands on the capitalist government.
They could start by demanding that every nickel of the more than $1 trillion already given to the banks be taken back and made available for jobs and services to the workers and the communities. The banks are so arrogant that they won’t even tell the government what they are doing with this money.
From bailout to fightback
The struggle is in its early stages and the workers are on the defensive. It is natural that at this stage popular organizations want to take advantage of the term “bailout” to expose the handouts to the banks and the bosses. But, as the struggle progresses, the concept of the capitalist government bailing out the people has to be shifted to the concept of the workers fighting back.
The funds to stem the crisis have to be put under the supervision of the workers, the unions, community organizations and other mass organizations—and not the bosses. It is the masses who are suffering from the crisis. They should be empowered to deal with it.
Only the masses will enforce a living wage, job guarantees, union rights, anti-racist practices and rights for women workers. The capitalists are skilled and experienced at manipulating government subsidies that are supposed to go for creating jobs. Instead they turn things around to maximize their profits. Relying on profiteering capitalists—and there is no other kind!—to save the working class is the worst possible course to pursue.
There must be a movement toward creating organs of popular power at the local, regional and national level to stop the layoffs and defend the workers’ right to a job; to demand a guarantee of jobs or income; an end to foreclosures and evictions; to organize the unemployed and the employed into a united movement demanding jobs for all.
As the crisis unfolds, the question must be raised, what is the cause of the crisis? Paul Krugman, a liberal economist, cites the fact that the U.S. economy could create $30 trillion worth of goods and services in the next two years. That would be sufficient to vastly reduce unemployment.
Krugman, who recently won a Nobel Prize for economics, restricted his commentary to a criticism of Barack Obama’s economic program. He brushed by the fundamental question. He did not bother to ask why, when there is the economic capacity to employ all the workers, is unemployment going through the roof?
The answer is that while the U.S. economy can produce $30 trillion worth of goods and services, it is in the form of commodities that must be sold for profit and only for profit. Human need means nothing to capitalism.
It is not as if the masses of people do not need the $30 trillion worth of goods and services. In fact, right now they are being deprived of the very means of life by an economic storm artificially created by capitalism itself.
The masses have been impoverished for more than 30 years by union busting, wage and benefit cuts, massive destruction of jobs at living wages and their replacement by low-wage jobs. At the same time the corporations have vied with each other to capture markets and sell more and more—purely to make more profit. They fostered every kind of debt—credit card debt, mortgage debt, auto loan debt and so on—to keep the profits rolling in.
Finally the entire edifice has come crashing down in a crisis of capitalist overproduction. There are too many autos to sell at a profit. There are too many houses to sell at a profit. There is too much steel to sell at a profit. And so on. It has led to the wave of layoffs, foreclosures, evictions, hunger and homelessness.
As a system of exploitation for profit, capitalism itself is at the bottom of the crisis. As the workers and the oppressed awake to demand their rights, the ultimate aim must be the destruction of capitalism and the erection of a system run for human need, not for profit. That system is socialism.
Goldstein is the author of the recently published book “Low-Wage Capitalism: Colossus with Feet of Clay.” See lowwagecapitalism.com for information about the book and how to order it.
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