Saturday, October 17, 2009

Radical economic and social reforms needed to exit crisis

The latest "official" unemployment reports for Illinois, now at 10.5%, once again demonstrates the need for far broader federal action to stimulate jobs creation. We join the chorus calling for a 2nd economic stimulus and for faster spending of the first federal stimulus.

Official unemployment may be at 10.5% but real unemployment is far higher. Unemployment in African American and Latino communities is over 20% and among African American youth nearly 80-90%, the backdrop to the tragic violence gripping such cities like Chicago.

Many economists believe the total number of unemployed may actually be 26 million Americans. There is no way the private corporate sector can create this many jobs and in any case jobs creation doesn't start from the top but from expanding the purchasing power of working people.

While the 1st stimulus has been a success in boosting economic growth and is projected to save or create 2-3 million jobs, it can't possibly stimulate the economy enough to make up for the remaining 24 million jobs needed.

Many economists are saying this will be a "jobless" economic recovery. Among other factors, the use of new labor saving technology has heavily impacted on the ability of US capitalism to create jobs.

Because Wall Street and Chicago board of trade capital seeks maximum profits, it has flooded over the past years into speculation and away from basic industry and manufacturing. It has tended to be concentrated in far fewer hands. Michael Moore says the top 1% of the population has accumulated wealth equal to the bottom 95%. That would mean in a place like Illinois, only 110,000 families have the wealth of the lower 10.5 million.

This is disgustingly illustrated in the announcement by Wall Street that it would pay out $150 billion in bonuses this year. Wall Street has recovered its profits while Main Street is falling into deeper crisis.

These titans of finance will not invest capital in a productive way that benefits the nation but in a way that benefits themselves. Government intervention that "redistributes" the wealth in the form of jobs creation, passage of EFCA and increase in wages and benefits, health care reform, education funding and aid to the cities and rural communities is urgently needed. These reforms constitute a curb on the power and ability of high finance and the mega transnational corporations to dispose of the nation's wealth.

Therefore a second stimulus package is desperately needed as part of a basic reform of the US economy, focusing on a "green" overhaul of the US infrastructure: building mass transit, re-insulating homes and offices, building new water treatment facilities, cleaning up brown fields and toxic waste dumps, etc.

Other radical measures needed are an immediate bailout of states and cities who are drowning in debt, being forced to slash services, moratorium on all home foreclosures, a cut in the work week with no cut in pay, extension of unemployment benefits to cover the full length of joblessness and to cover first time job seekers like youth entering the job market.

A radical restructuring of the federal and state tax codes is long overdue that corrects the theft that took place during the Reagan years. The tax burden should be restored to the wealthy and large corporations and banks.

This is only the beginning of far reaching changes needed to re-orient the US economy and society toward one that puts people before corporate and bank profits.

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