[D66] Christmas of crisis in America

[Antid Oto]

Christmas of crisis in America
23 December 2011

America at Christmas 2011 is a society of mass poverty, on the one hand, and
vast wealth accumulation, on the other—tens of millions of people are poor and
desperate, while a relative handful enjoy riches undreamt of by the Egyptian
pharaohs or the aristocracy of Louis XIV.

Government agencies and social service groups document the tidal wave of human
need in statistics that are increasingly mind-boggling: 50 million Americans
live below the official poverty line, while another 100 million live in
“near-poverty,” struggling to support themselves on incomes so low that they are
one misfortune away from destitution.

Some 25 million workers are either unemployed or underemployed, 50 million live
without health insurance, one out of every seven Americans receives food stamps.
The number of self-employed Americans has fallen by two million over the past
five years. Nearly six million of the jobless have been out of work for more
than six months.

The jobs crisis has steadily worsened, not only year-to-year, but decade after
decade. American capitalism continues to generate record corporate profits and
wealth for the super-rich, but is less and less able to provide employment for
working people.

According to a study by the McKinsey consulting firm, it took six months for the
US economy to return to pre-recession job levels after the 1982 recession. After
the 1991 recession, the recovery in jobs required 15 months. After the 2001
recession, it took 39 months.

Some 48 months have already passed since the current slump in the labor market
began, and there are six million fewer people employed than in December 2007.
McKinsey initially forecast that it would take 60 months before jobs regained
the level of 2007, but at the current level of job creation, it would take 78
months to reach the level of 146 million workers employed before the onset of
the recession—assuming that there is no further deepening of the economic slump.

The protracted duration of mass unemployment is the driving force of a social
crisis that blights the future of young and old. One out of every four American
children depends on food stamps. Some 1.6 million children were homeless at some
point or other during this year. For young workers aged 18 to 24, jobless rates
exceed the Depression level of 20 percent. Nearly 20 percent of all American men
between the ages of 25 and 34 are now living with their parents.

Meanwhile those nearer the end of their working life have little to look forward
to: according to the Employee Benefit Research Institute, 46 percent of all
American workers have less than $10,000 saved for retirement, and 29 percent of
all American workers have less than $1,000 saved for retirement.

Four million American families have seen their homes foreclosed since the
subprime mortgage crisis first erupted in 2007. Nearly 12 million families
occupy homes that are under water, financially speaking—the mortgage debt is
more than the dwellings are worth in the depressed housing market.

The entire political establishment, the Obama White House and Congress alike, is
callously indifferent to the suffering of the population. The Democrats and
Republicans speak for different wings of the same ruling elite.

While the vast majority of the American people confront increasing difficulty in
meeting their basic social and economic requirements, the financial aristocracy
lives in a different universe. One recent example sheds considerable light.

As the New York Times reported this week, one charter member of this
aristocracy, former Citigroup chairman Sandy Weill, has just sold his penthouse
apartment in Manhattan for $88 million. The purchaser was 22-year-od Ekaterina
Rybolovleva, daughter of Russian oligarch Dmitriy Rybolovlev, the monopoly owner
of the former Soviet fertilizer industry.

The squandering of such a vast sum to house a single individual naturally
provokes outrage and revulsion. The $88 million expended for the penthouse at 15
Central Park West is greater than the entire annual operating deficit of the
Metropolitan Transportation Authority ($68 million), or the 2010 annual budget
deficit of the city of Detroit ($58 million). It approximates the cost of all
free school lunches in the New York City schools for an entire school year.

By a straightforward calculation, $88 million would provide 2,000 jobs for
unemployed workers at the average US wage of $44,000 a year. While Mr. Weill and
Ms. Rybolovleva are among the “job creators” celebrated by American politicians,
Democrats and Republicans, who oppose raising taxes on the super-rich, neither
of them provided employment on that scale. And if anything, the demeaning
employment of chauffeurs, doormen, maids and security men who serve the whims of
such billionaires constitutes a drain on society, not a benefit.

There is another yardstick for measuring this waste of social resources. Sandy
Weill is best know as the wheeler-dealer who combined his Travelers insurance
empire with Citibank, creating Citigroup as the first and largest of the
financial supermarkets, companies able to throw their weight around in every
area of financial services.

In 1998-99, Weill launched an all-out lobbying campaign to sway the
Republican-controlled Congress and the Democratic White House to support repeal
of the Glass-Steagall Act, the Depression-era law, passed in the wake of the
1929 Wall Street crash, that made illegal the type of financial octopus created
by Weill.

Weill bought Congress and the Clinton administration for $100 million, not much
more than the price at which he sold his Manhattan penthouse last month.

Patrick Martin

http://wsws.org/articles/2011/dec2011/pers-d23.shtml