The U.S. economy is going deeper into crisis. Millions of people have already lost their homes due to foreclosures. In New York City alone, tens of thousands in the financial sector have lost their jobs, and as the crisis spreads to the productive sector around the country, millions more will be laid off.
Meanwhile, the managements of the big investment corporations that got us into the crisis were doing fine. In 2006 the five largest Wall St. firms at that time gave their top management personnel $40 billion in bonuses, twice as much as the wage increases of all 93 million workers in the U.S. for the six years from 2000 to 2006.
In response to the crisis, the government granted a bailout of some $700 billion to the big banks and investment companies, the same ones directly responsible for the crisis. This giveaway of our tax dollars was pushed through Congress by both the Democrats and the Republicans, with the support of both Barack Obama and John McCain. But the banks will not use this money in any way that benefits those facing foreclosures or evictions, or workers facing layoffs.
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| Food line in U.S. during Great Depression |
For example, in December the Republic Windows and Doors factory in Chicago planned to close after Bank of America, which had received $25 billion in the bailout, canceled its line of credit to Republic. This would have left Republic's 300 workers without even the required 60 day notice of a plant closing or the severance pay due them. Only after the workers occupied the factory for 6 days did Bank of America and JP Morgan Chase grant the $1.75 million needed to meet the workers' minimal demands.
CEOs of the failed investment firms, such as Kerry Killigan of Washington Mutual, Daniel Mudd of Fannie Mae and Richard Syron of Freddie Mac, still received tens of millions of dollars in "golden parachutes" when they left.
And the U.S. government is still spending over $12 billion every month to continue its wars of occupation of Iraq and Afghanistan, which is only in the interest of the U.S. oil companies and other big capitalist corporations.
Now the government has come up with a $17 billion bailout for the auto industry. But this plan is based on pushing through further cuts in wages and benefits of all auto workers. These workers are already suffering from two-tier contracts under which newly hired workers earn only $14 an hour. This is in an industry which for a long time paid relatively good wages.
Capitalism Is the Problem
But this crisis is much deeper than one of corrupt CEOs making millions while the economy goes into decline. It is a crisis of capitalism, a system in which the rich get richer and the poor get poorer. At its root is a crisis of over-production, in which companies produce more goods than the masses of working people, with their limited incomes, can afford to buy. The present crisis began with the sub-prime mortgages, in which variable-rate mortgages were granted at low, teaser rates to people who could otherwise not afford them. When the rates began to rise, the people soon could not afford to pay. As they lost their homes to foreclosure, the mortgage companies failed. This affected the investment firms and major banks, which had put a lot of their assets into the mortgage companies. In general terms, it is a result of the contradiction between social production (where millions of workers produce the housing, food, cars, etc. that people need) and the private appropriation (by the monopoly corporations and big banks that finance them) of the wealth produced.
All working people must continue to oppose the bailouts and other giveaways to the banks and big corporations. We should demand instead that the money be used to stop foreclosures and evictions, to protect workers' pension funds invested in 401 (k)s, to pay for free, single-payer health insurance for all, to provide free quality education through university for all who want it.
Socialism Is the Long-Term Solution
In the long run, the answer to the crises is socialism. The big U.S. corporations, their media and government, want us to believe that capitalism is the best of all possible worlds, that it can provide a decent life for all. But for years already, working people have been seeing the "American Dream" fade into a nightmare. The idea that, with hard work we can do better than our parents, is vanishing as real wages continue to fall. And during times of crisis like today, finding any kind of job has become an impossibility for many.
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| Moscow Foreign Workers Club, 1934 |
But capitalism is not an eternal system. In November of 1917, the Russian workers carried out a socialist revolution. They took over the big factories, confiscated the land of the landlords and gave it to the peasants, and pulled the country out of the imperialist First World War. In the 1930s, while the whole capitalist world was suffering from the Great Depression, the socialist Soviet Union eliminated unemployment. Production was organized to meet the increasing material and cultural needs of the working people, instead of for the maximum profit of the capitalists. New factories were built all over the country, particularly in the less industrially developed interior of the country. Many workers from all over the capitalist world went to the Soviet Union for jobs. In 1931, the Soviet Union advertised for skilled workers from the U.S., and 100,000 Americans applied, many more than were needed. In all, about 15,000 U.S. workers took jobs in the Soviet Union.
People in the U.S. are suffering from constantly rising rents and mortgage payments, while millions around the country have no homes at all; in the socialist Soviet Union, rents were pegged at about 5% of family income. Over 47 million people in the U.S. today have no health insurance and most of the rest of the population has to pay high premiums and co-pays for their insurance; the Soviet Union provided free, quality health care for all from the cradle to the grave. The public school system in the U.S. is always facing budget crises and is unable to provide a decent education for children of working people, and the few cities and states that have public colleges are constantly raising tuition; the Soviet Union provided free, quality education from pre-K to the university level.
Racism and police brutality continues to exist in the U.S., despite the election of the first Black president. In the socialist Soviet Union, the discrimination against the non-Russian people of the former tsarist empire was rapidly eliminated. The well-known African-American writer Langston Hughes spent several months living in Soviet Central Asia in the 1930s and described the equal treatment of the non-white peoples in this area in his book / Wonder As I Wander. And of course, Paul Robeson, the great fighter for civil and human rights, described the absence of racism that he always found in the Soviet Union.
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| Dniepropetrovsk Dam in Soviet Ukraine, completed in 1932, supported the largest hydoelectric plant in all of Europe. |
With the immense productive capacity of this country, a socialist U.S. would have a much easier time providing a productive, fulfilling life for all working people. But in order to do this, workers would have to get rid of the present capitalist government and expropriate (take over) the property of the big corporations. Of i course, the capitalists would fight with all the power of their state against this. For, as the Communist Manifesto stated: "the executive of the modern State is but a committee for managing the common affairs of the whole bourgeoisie." Only a working class, conscious of its class interests and organized by a genuine communist party, could bring this about.
For further information, please contact:
U.S. Friends of Soviet People
P.O. Box 140434
Staten Island, NY 10314
(718) 667-4740
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