Insurance Companies Are WORSE Than Wall Street! w/Michael Hudson
Pledging “pain,” Federal Reserve declares war on the working class
In his speech Friday at the Federal Reserve’s annual summit in Jackson Hole, Wyoming, Federal Reserve Chairman Jerome Powell made one thing clear: America’s financial oligarchy is determined to make the working class bear the cost of the deepening economic crisis.
Speaking more bluntly than he has previously, Powell pledged that the US central bank would sustain higher interest rates in the name of fighting inflation, with increased unemployment and economic “pain” to be expected as the consequences. The Fed is widely anticipated to again raise rates by 0.5 to 0.75 percentage points in September.
“Reducing inflation is likely to require a sustained period of below-trend growth,” Powell said. “Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses.”
Behind the Fed chair’s grey-hued euphemisms stands a ruthless class policy. With “softening of labor market conditions,” Powell is describing a deliberate jobs bloodbath, in which higher rates will encourage mass layoffs and the inevitable calamity this entails for workers and their families. It will mean staggering rises in poverty, hunger, substance abuse, foreclosures, homelessness and suicides, under conditions of an already acute social crisis.
There can be no doubt that the target of the “pain” Powell is referring to is the working class.
Powell bemoaned a so-called “out of balance” labor market and outsized demand for workers, saying, “The labor market is particularly strong, but it is clearly out of balance, with demand for workers substantially exceeding the supply of available workers.”
This cynical argument—that a labor shortage and overly large wage increases are the primary drivers of inflation—defies the most basic economic logic. If the cause of high inflation in the United States were wage increases, then workers’ wages would be rising at a level comparable to, or higher than, the level of inflation.
Workers’ pay has risen in nominal terms far below the rate of inflation, resulting in a 3 percent decline in real wages over the course of the past year, according to the Bureau of Labor Statistics, falling as much as 5 percent in some states.
The labor shortage itself is in large part the consequence of the ruling class’ catastrophic response to the COVID-19 pandemic, in which mass infection has been ever more deliberately enforced in the short-term pursuit of profit. As many as 4.1 million Americans have left the labor force and are unable to work due to the debilitating impact of Long COVID, according to an analysis by the Brookings Institution released this week. The US Census Bureau has estimated that as many as 16 million people in the US are suffering from Long COVID.
In reality, corporate price gouging, not wage growth, has been the primary factor driving inflation, an April study by the Economic Policy Institute found. Meanwhile, corporate profits continue to set record after record.
Profit margins at non-financial corporations have hit a 72-year high, according to data released Thursday by the US Commerce Department, reaching 15.5 percent for the first time since 1950. Profits increased 8.1 percent over the past year, even after accounting for higher capital stock replacement costs from inflation.
The oil and gas giants have been in the forefront of this bonanza, with the five largest companies taking in $55 billion in profits during the second quarter of 2022 alone, as they profiteer from the US-instigated proxy war against Russia in Ukraine. The intent of US imperialism and its allies is to make the working class pay for their predatory wars abroad. In the UK, energy prices are set to rise 80 percent this fall, to £3,549 a year, roughly $4,200, and to as high as £6,600 in the spring, with catastrophic implications for working families.
The pro-corporate trade unions, for their part, have been working around the clock to impose the demands of the companies for below-inflation raises, higher health care costs and longer hours. Earlier this year, United Steelworkers President Thomas Conway boasted of a “responsible” contract the union coerced oil and gas workers into accepting, lauding it for not adding to “inflationary pressures,” parroting the lying claim that wage increases are driving higher prices.
Already, the Fed’s rate increases are beginning to have their intended effect, triggering a wave of mass layoffs, including 38,000 in the technology sector through mid-August. Job cuts are now spreading more widely throughout the economy. Hospitals and health care systems are increasingly slashing positions and reducing services, Kaiser Health News reported Friday, despite the health care chains receiving massive bailouts to the tune of billions of dollars during the pandemic.
Layoffs are beginning to accelerate even as many sections of the economy are already threatened with disaster and virtual collapse due to understaffing and brutally long hours, as in the health care industry and the railroads.
In his speech, Powell alluded repeatedly to former Fed Chair Paul Volcker, whom he has previously presented as his intellectual North Star. Appointed by Democratic President Jimmy Carter and retained by Republican President Ronald Reagan, Volcker oversaw a program of economic “shock therapy” in the late 1970s and early 1980s, raising interest rates to double-digit levels in order to induce mass unemployment and break the back of the militant workers’ struggles that had dominated the preceding decade. “The standard of living of the average American worker has to decline,” Volcker declared in 1982.
In the present, workers are being told by the Biden administration, the political establishment and the corporate and financial elite that they must sacrifice—and accept a lower standard of living—in the name of the “national interest” and the struggle against supposed “Russian aggression.”
But history shows again and again that the demand for “shared sacrifice” by the ruling class and its representatives is nothing but a swindle, aimed at enriching the financial oligarchy at the expense of the working class and increasing its exploitation.
The response to the ruling class policy of austerity and war must be a conscious political program representing the interests of the working class, unifying the struggles of workers in every section of industry and across national boundaries. This year has already seen an eruption of class struggle internationally, drawing in ever-larger layers, from manufacturing workers to dockworkers and truckers, pilots and flight attendants, nurses and educators, among others.
The broad support for the campaign of Will Lehman for international president of the United Auto Workers shows the enormous potential for this developing movement in the working class to find a progressive outlet. Lehman, a Mack Trucks worker and socialist, has explained that he is running in the UAW elections in order to organize a rank-and-file movement from below and take power back from the union bureaucracy.
The emerging struggles of workers against the soaring cost of living and the impact of the capitalist crisis must take up the socialist and internationalist perspective Lehman is advocating so that the needs and interests of workers—not the financial oligarchy—determine how society’s resources are organized.
The state of California is home to more illegal aliens than any other state in the country. Approximately one in five illegal aliens lives in California, Pew reported.
Another line they cut into: Illegals get free public housing as impoverished Americans wait
Want some perspective on why so many blue sanctuary cities have so many homeless encampments hovering around?
NYC Employs 14 Hotels to House Migrants Bussed from Texas Border
New York City officials expanded their hotel housing operation for migrants bussed from the Texas border with Mexico by Governor Greg Abbott. The city now contracts with 14 hotels and more migrants arrive daily.
New York City Immigrant Affairs Commissioner Manuel Castro revealed that the city is now contracting with 14 hotels to house migrants bused to the Big Apple from the Texas border region. Texas Governor Abbott ordered the busing of migrants to sanctuary cities like New York and Washington, D.C. after changes in Biden administration border security and immigration policies created a massive surge of migrants — approximately 67 percent of whom cross from Mexico into Texas-based Border Patrol sectors.
More than 118,000 migrants crossed into Texas in July alone, Breitbart Texas reported. Only 1,500 or so have been bused to New York City, Governor Abbott tweeted.
Following Abbott’s order to bus migrants to New York City, city officials complained about more than 6,000 migrants seeking shelter in the Big Apple, according to the New York Post.
New York city and state officials admitted to asking for help from officials in other states to help house the migrants who were mostly sent to the city through federal government transportation.
“Unlike Gov. Abbott, our mayor and our governor are showing true leadership by actively coordinating with the White House and federal government and governors across the country and mayors across the country to see how we can work together to address the need to resettle asylum-seekers,” Castro stated.
The city complains their homeless shelters are over capacity prompting the action of spending upward of $300 million to house migrants, the Post revealed.
The city backed away from its plans to house 600 migrant families in the Row NYC luxury hotel near Times Square. Instead, it is locking up approximately 5,000 hotel rooms.
“He’s (Gov. Abbott) weaponizing asylum seekers,” Castro said in the Fox News report. “It is shameful, and it is our moral obligation to condemn the use of human beings for political purposes.”
Texas Attorney General Ken Paxton told Breitbart News the plan to bus the migrants to Washington, D.C. and New York City was “genius” during an interview with Alex Marlow on Breitbart News Daily.
“It was a pretty, I think, genius idea by Governor Abbott,” Paxton told Marlow. “I wasn’t sure how well it would work, because we were taking volunteers, and I didn’t know how many people we would get to volunteer to go to D.C. and places like New York, but it turns out there’s enough of them to at least make the point, and clearly to have an impact on Washington, D.C., and New York, even though it is a small number of people, particularly relative to what we’re dealing with every day.”
“We get more people every day than they’ve had to deal with in total. It points out how difficult this situation is, because obviously, you’ve heard complaints from both mayors about how much it’s costing them, and how they’re being overrun with issues like crime,” Paxton explained. “It just highlights how bad this situation is when you have a couple of Democratic mayors complaining about really a drop in the bucket compared to what we’re dealing with.”
Trump Campaign: Democrats Give Housing to Illegal Migrants, Penalizing Black Americans
President Donald Trump’s campaign used the issue of illegal immigration on Thursday to seek votes from working-class blacks.
A short video released by the Trump campaign Twitter account highlighted the president’s record on improving public housing in New York and other cities.
“My name is Judy Smith,” said one black woman, who continued:
I live in New York City public housing. I’m grateful for the spotlight that President Trump is putting on New York City public housing. I think it’s wrong that the Democrats put illegal immigrants before black Americans. How is it that we have people waiting on the waiting lists for New York City public housing for 10 years or more, but yet we have illegal immigrants living here? Something is wrong with that picture.
President Trump is bringing real solutions to real problems.#RNC2020 pic.twitter.com/3Q7s2ZEchE
— Team Trump (Text VOTE to 88022) (@TeamTrump) August 28, 2020
The comments were likely aimed at working-class blacks in many swing states, including several Midwest states.
“Working-class African Americans are significantly more supportive of policies that seek to: decrease the number of immigrants coming to the United States, increase the federal role in verifying the employment status of immigrants, and attempts to amend the Constitution’s citizenship provisions,” said a 2013 peer-reviewed study by Tatishe Nteta, a professor at the University of Massachusetts at Amherst. The study continued:
For African Americans who lost a job to an immigrant, working-class membership resulted in a 13 percentage point increase in the probability of support for an increased federal role in workplace oversight [against employment of illegal immigrants] when compared to middle-class African Americans who experienced a similar loss.
Numerous polls show that blacks — like all other groups — say they wish to welcome migrants, but strongly prefer that Americans get jobs before companies import more migrants.
Nationwide, the expanded supply of new migrants also cuts Americans’ disposable wages by inflating their housing costs. That reality is recognized by investor groups who are urging more immigration. For example, the Economic Innovation Group says, “The relationship between population growth and housing demand is clear. More people means more demand for housing, and fewer people means less demand.”
Mike Bloomberg’s pro-migration advocacy group, New American Economy, pushed the same argument:
The research shows that an increase in the absolute number of immigrants in a particular county from 2000–2010 results in corresponding economic gains—increased demand for locally produced goods and services, a corresponding inflow of U.S.-born individuals—that are reflected in the housing market.
The video also included comments from other blacks in New York:
My name is Manuel Martinez … Under the Trump administration, New York City Housing Authority has received an influx of cash that it has not seen since 1997.
My name is Claudia Perez I’m the resident council president of Washington Houses, which is in Spanish Harlem. [New York Mayor] Bill de Blasio and the way he has dealt with public housing residents is disgraceful. President Trump administration has opened their ears and has listened … [and] is bringing real solutions to real problems.
The video ends with the claim, “More Funding: Better Housing: Promise Made: Promise Kept.”
Donald Trump's labor & immigration promises for a 2nd term are vague but useful.
They are also better for ordinary Americans than Joe Biden's business-backed, open-ended inflow of wage-cutting & rent-raising blue-collar workers & college-graduates. https://t.co/OmE4tRPf4T
— Neil Munro (@NeilMunroDC) August 26, 2020
Another line they cut into: Illegals get free public housing as impoverished Americans wait
Want some perspective on why so many blue sanctuary cities have so many homeless encampments hovering around?
Try the reality that illegal immigrants are routinely given free public housing by the U.S., based on the fact that they are uneducated, unskilled, and largely unemployable. Those are the criteria, and now importing poverty has never been easier. Shockingly, this comes as millions of poor Americans are out in the cold awaiting that housing that the original law was intended to help.
Thus, the tent cities, and by coincidence, the worst of these emerging shantytowns are in blue sanctuary cities loaded with illegal immigrants - Orange County, San Francisco, San Diego, Seattle, New York...Is there a connection? At a minimum, it's worth looking at.
The Trump administration's Department of Housing and Urban Development is finally trying to put a stop to it as 1.5 million illegals prepare to enter the U.S. this year, and one can only wonder why they didn't do it yesterday.
According to a report in the Washington Times:
The plan would scrap Clinton-era regulations that allowed illegal immigrants to sign up for assistance without having to disclose their status.
Under the new Trump rules, not only would the leaseholder using public housing have to be an eligible U.S. person, but the government would verify all applicants through the Systematic Alien Verification for Entitlements (SAVE) database, a federal system that’s used to weed illegal immigrants out of other welfare programs.
Those already getting HUD assistance would have to go through a new verification, though it would be over a period of time and wouldn’t all come at once.
“We’ve got our own people to house and need to take care of our citizens,” an administration official told The Washington Times. “Because of past loopholes in HUD guidance, illegal aliens were able to live in free public housing desperately needed by so many of our own citizens. As illegal aliens attempt to swarm our borders, we’re sending the message that you can’t live off of American welfare on the taxpayers’ dime.”
The Times notes that the rules are confusingly contradictary, and some illegal immigrant families are getting full rides based on just one member being born in the U.S. The pregnant caravaner who calculatingly slipped across the U.S. in San Diego late last year, only to have her baby the next day, now, along with her entire family, gets that free ride on government housing. Plus lots of cheesy news coverage about how heartwarming it all is. That's a lot cheaper than any housing she's going to find back in Tegucigalpa.
Migrants would be almost fools not to take the offering.
The problem of course is that Americans who paid into these programs, and the subset who find themselves in dire circumstances, are in fact being shut out.
The fill-the-pews Catholic archbishops may love to tout the virtues of illegal immigrants and wave signs about getting 'justice" for them, but the hard fact here is that these foreign nationals are stealing from others as they take this housing benefit under legal technicalities. That's not a good thing under anyone's theological law. But hypocrisy is comfortable ground for the entire open borders lobby as they shamelessly celebrate lawbreaking at the border, leaving the impoverished of the U.S. out cold.
The Trump administration is trying to have this outrage fixed by summer. But don't imagine it won't be without the open-borders lawsuits, the media sob stories, the leftist judges, and the scolding clerics.
Los Angeles County Pays Over a Billion in Welfare to Illegal Aliens Over Two Years
BY MASOOMA HAQ
In 2015 and 2016, Los Angeles County paid nearly $1.3 billion in welfare funds to illegal aliens and their families. That figure amounts to 25 percent of the total spent on the county’s entire needy population, according to Fox News.
The state of California is home to more illegal aliens than any other state in the country. Approximately one in five illegal aliens lives in California, Pew reported.
Approximately a quarter of California’s 4 million illegal immigrants reside in Los Angeles County. The county allows illegal immigrant parents with children born in the United States to seek welfare and food stamp benefits.
The welfare benefits data acquired by Fox News comes from the Los Angeles County Department of Public Social Services and shows welfare and food stamp costs for the county’s entire population were $3.1 billion in 2015, $2.9 billion in 2016.
The data also shows that during the first five months of 2017, more than 60,000 families received a total of $181 million.
Over 58,000 families received a total of $602 million in benefits in 2015 and more than 64,000 families received a total of $675 million in 2016.
Robert Rector, a Heritage Foundation senior fellow who studies poverty and illegal immigration, told Fox the costs represent “the tip of the iceberg.”
“They get $3 in benefits for every $1 they spend,” Rector said. It can cost the government a total of $24,000 per year per family to pay for things like education, police, fire, medical, and subsidized housing.
In February of 2019, the Los Angeles city council signed a resolution making it a sanctuary city. The resolution did not provide any new legal protections to their immigrants, but instead solidified existing policies.
In October 2017, former California governor Jerry Brown signed SB 54 into law. This bill made California, in Brown’s own words, a “sanctuary state.” The Justice Department filed a lawsuit against the State of California over the law. A federal judge dismissed that suit in July. SB 54 took effect on Jan. 1, 2018.
According to Center for Immigration Studies, “The new law does many things: It forbids all localities from cooperating with ICE detainer notices, it bars any law enforcement officer from participating in the popular 287(g) program, and it prevents state and local police from inquiring about individuals’ immigration status.”
Some counties in California have protested its implementation and joined the Trump administration’s lawsuit against the state.
California’s campaign to provide public services to illegal immigrants did not end with the exit of Jerry Brown. His successor, Gavin Newsom, is just as focused as Brown in funding programs for illegal residents at the expense of California taxpayers.
California’s budget earmarks millions of dollars annually to the One California program, which provides free legal assistance to all aliens, including those facing deportation, and makes California’s public universities easier for illegal-alien students to attend.
According to the Fiscal Burden of Illegal Immigration on United States Taxpayers 2017 report, for the estimated 12.5 million illegal immigrants living in the country, the resulting cost is a $116 billion burden on the national economy and taxpayers each year, after deducting the $19 billion in taxes paid by some of those illegal immigrants.
BLOG: MOST FIGURES PUT THE NUMBER OF ILLEGALS IN THE U.S. AT ABOUT 40 MILLION. WHEN THESE PEOPLE ARE HANDED AMNESTY, THEY ARE LEGALLY ENTITLED TO BRING UP THE REST OF THEIR FAMILY EFFECTIVELY LEAVING MEXICO DESERTED.
New data from the U.S. Census Bureau shows that more than 22 million non-citizens now live in the United States.
Columbus Kroger workers: Vote NO on the UFCW’s “new” contract! Build support in the working class for a counter-offensive for better wages and working conditions!
Join the fight against Kroger management and the corrupt UFCW bureaucracy! Join the Kroger Workers Rank-and-File Committee by filling out the form at the bottom of this statement.
Fraternal greetings to our fellow Kroger workers, sisters and brothers of United Food and Commercial Workers Local 1059 in Columbus, Ohio. The Kroger Workers’ Rank-and-File Committee urges you to vote down the “new” tentative agreement which you are voting on this week.
We’ve read the comments on social media and heard what you’ve said about the contract and the way the UFCW is keeping you in the dark. Like the workers of UFCW Local 700 in Indianapolis and Ft. Wayne, Indiana, you are outraged at the pro-company proposals of this tentative agreement and most of you want it voted down again. And as in those previous contract votes, the UFCW has tried to make sure you would not have enough time to read and understand the changes in the second proposal. Your reps have made themselves scarce or beat around the bush when you asked questions.
You may not think that the proposal is any different than the first one that you voted down. You would be correct. Indeed, the wage increases under the “new” contract, which tops out at a measly 65 cents an hour, are basically the same as the first which you rejected in July. Little wonder it took them only a day to “negotiate” the second deal!
If this proposal does not have everything that you are demanding—wage increases, health care coverage, working hours that will support your health and family life, and time off to take care of yourself and spend time with friends and family—then we encourage you and all your coworkers to vote “No” on this company-friendly sellout deal!
The UFCW negotiated with Kroger behind closed doors to work out a deal that would benefit the profit interests of the company while they kept us on the job working through holidays and back-to-school rushes at Indianapolis and Ft. Wayne. They came back to us with highlights, but not a full contract, and even those were nearly exactly the same as the wage and health care concessions that we voted down the first time.
Indianapolis and Fort Wayne workers have recent experience with the underhanded tactics the union bureaucracy uses to ram through such sellouts. UFCW Local 700 gave workers as little opportunity as possible to vote, limiting voting at both cities to a couple of one and a half hour time slots at each store, and not providing remote voting options for workers who were taking time off or not scheduled to work that day. At Ft. Wayne, workers were given “highlights” which contained only vague assertions, not even one-sided or self-serving details.
In the initial vote, union functionaries tried to intimidate some workers by saying that a “no” vote would mean a strike that the union would isolate and provide next to nothing in strike benefits. But this did not intimidate us, because many of us were willing to go on strike in spite of the great sacrifice it would take. We voted down the first contract. We feel that nothing less than our collective power is what it will take to fight the unbearable working conditions and sub-living wages that the company has imposed on us for years and that the union enforced.
During the second vote on virtually the same contract, the UFCW announced that the Local 700 contracts had passed with less than half of the membership turning out to vote. When Indianapolis workers took to the Local 700 Facebook page to question these dubious results, the union shut down the page entirely. It remains defunct to this day because it is completely unable to answer to the working class’ demands in the face of its conscious betrayal.
This experience contains lessons for Kroger workers in Columbus. To counter the anti-democratic playbook of the UCFW, we offer the rank-and-file workers of Local 1059 some advice:
- First, mobilize as much as possible to defeat this contract and the union’s attempt to suppress voter turnout. Organize carpools to the vote locations and attend and observe the count at your union hall on Friday. Note that there are some vote locations that have changed from last time! The union is trying to catch workers off guard, and we must be vigilant.
- Make sure your coworkers understand the proposal and exactly who is receiving the “ratification bonuses” (bribes), as workers recently in Indiana were misinformed and some who had voted for the deal in the expectation that they would get them ended up not being eligible. Some employees are being offered an additional raise in February, so make sure that your coworkers are clear on who is eligible and who is not. The retiree insurance is likely being delayed for this contract as well.
- Organize discussion among rank-and-file workers at your stores. Come up with your own demands to counter the pro-corporate proposals, what your “red lines” are, short of which you will not accept any deal. What do you need to live and take care of yourselves and your families? Don’t accept what the company and union says is affordable. We know this is bogus, and there is more than enough money to meet our demands.
The company is recording high profits and the shareholders and CEO are being rewarded handsomely off the work of our “essential” work! We are working as hard and as diligently as we did at the start of the pandemic, at low staffing levels, and should be paid accordingly. We should NOT have to be carrying unreasonable workloads or be expected to work overtime due to the company’s inability to staff and train workers adequately, decisions based solely on the profit interests of a few that our “union” has demonstrated are worth more than our safety.
We also want to encourage workers in Toledo and South Bend, Indiana to watch and learn from these powerful experiences, and prepare themselves to organize opposition to any pro-company proposals for their upcoming negotiations.
Columbus workers should not feel intimidated by the union, but the opposite. The union, which is in bed with Kroger, will not back down even if you vote down this contract. But you can mobilize the widest support in the working class to defeat this. This includes Columbus area teachers, whose strike against terrible learning conditions was suddenly shut down in the middle of the night this week by the Columbus Education Association.
You can also build support from workers, including grocery workers, across the country and around the world. Workers everywhere are being thrown into a fight against the corrupt corporate-union labor-management framework which is responsible for decades of stagnant and declining conditions.
Kroger is a nationwide grocery giant and is backed by international financial interests. To fight this powerful enemy, we can’t win with local and isolated contract struggles alone. In contrast to the nationalist and pro-corporate program of the UFCW, what we need is a program and organizational framework to unite these struggles into one, on the statewide, national, and international arena.
The well-paid local and international UFCW officials, some of whom make as much in salary as Kroger managers, showed on whose behalf they were negotiating. To have an organization that truly fights for the workers’ interests, we saw that the only way forward was for us workers on the shop floor to build our own, the way that autoworkers, teachers and transportation workers around the world are organizing their own independent committees.
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