Peaceful Warrior Blog
# 25 Talker on Obama-Chase Bank-Foreclosures- Others
So Wall street got bailed. Banks got bailed. Money flowed to salvage the financial world, while the people got a royal screwing.
What really pisses me off, is the reading about some high and mighty government
officials ‘knowing’ what was happening and still ‘doing nothing’ about it.
Who got rich with the doing, got bailed out, and now refuse to assist those the bailout was intended to help!
Politicians that refuse to serve their country, by sucking up to lobbyists, and any donating to the politicians campaign or reelection chest.
I don’t pretend to know high money dealing, but do recognize when someone is getting shafted.
Banks repossessed a record 918,000 homes last year, a 6.5 percent increase over 2008. This number could increase rapidly, with 1 million more homes in the process of foreclosure and by 5.5 million currently-delinquent mortgages. The consequences for home values—the major source of wealth for most US families—when these properties enter the housing market will be severe. Home prices have already fallen by 30 percent since October 2006, according to the Case-Schiller Index.
The latest foreclosure statistics are indisputable proof that President Obama’s “Making Home Affordable Act,” launched in March, has done nothing to lessen the housing crisis. The $75 billion program offered banks rich incentives to renegotiate payment plans, but ruled out reductions in mortgage principal, or outstanding loan balances. The banks refuse to take any loss on these vastly overvalued loans.
“Until the lenders start to get into principal balance reduction you’re going to continue to see high redefault rates,” Rick Sharga, senior vice president at RealtyTrac, said. “We haven’t seen any appetite for that on the part of the lenders
Driving the foreclosure crisis is the impoverishment of broad sections of the US population through unemployment and pay cuts.
Workers who still have jobs are facing declining wages. The Labor Department reported this week that inflation-adjusted weekly earnings fell by 1.6 percent in 2009, while a broad measure of inflation, the consumer price index (CPI), rose by 2.7 percent. Inflation was paced by energy prices, which jumped by 18.2 percent in 2009, the steepest increase since 1979. Gasoline prices recorded a record increase of 53.5 percent.
Amidst layoffs, wage cuts, rising prices, and rapidly deteriorating home values, consumers continue to cut back on spending. The US Commerce Department reported on Thursday that retail sales fell by 0.3 percent in December, startling economists who had widely expected an increase. For the year as whole, retail sales were down 6.2 percent over 2008, the worst decline on record.
4. In the United States, hundreds of thousands of jobs are eliminated every month. The number of workers who are unemployed or underemployed has grown by 10 million in one year alone, to 24 million. Official unemployment is at 8.9 percent and in many states exceeds 10 percent. Actual unemployment is much higher. Millions of workers are in the same situation: without a steady job and a decent wage, they are unable to afford housing payments, credit card bills, health care for their families, education for their children, or other basic necessities of life. As the crisis deepens, corporations are forcing workers to accept further cuts in wages and benefits
The Obama administration
7. The reaction of the governments of the world, led by the United States, has been to defend the interests of the very people responsible for the crisis. Behind the increasingly reckless multitrillion-dollar bailout programs is one overriding concern: to protect the interests of the large banks and rich investors.
8. When the financial crisis exploded in September 2008, the Bush administration, with the support of the Democratic Party, organized a massive bailout of the banks—the $700 billion Troubled Asset Relief Program (TARP). However, this sum was insufficient to make the banks “whole”—that is, to fill the gap created by the collapse of their speculative investments. The Obama administration initiated a series of further measures, including a trillion-dollar subsidy to private hedge funds to buy up the “toxic assets” on bank balance sheets.
9. Obama claims that bailed-out banks will resume lending and help American consumers and small businesses. This has not happened. The banks are using taxpayer money to pad their balance sheets, finance corporate acquisitions and, of course, pay for huge executive salaries and bonuses. The bailouts will eventually be paid for through attacks on the working class and cuts in key social programs, including Social Security, Medicare and Medicaid.
10. Defending the bonuses of finance industry executives, the Obama administration invoked the “sanctity” of contracts. This principle, however, does not apply to workers. Obama has demanded that auto workers accept new cuts in wages, jobs and benefits to make the US auto companies “viable”—that is, to ensure that they provide an adequate and continuous rate of return to investors. Behind this blatant double standard lies the political fact that the government serves the interests of the ruling class. The implications for workers are devastating. General Motors has announced plans to eliminate 23,000 jobs. Chrysler has declared bankruptcy and will close at least eight plants, coming on top of major cuts in wages and benefits.
11. Obama is defending the interests of the ruling class in foreign and military policy as well. The occupation of Iraq continues. The new president has sent tens of thousands more US troops to Afghanistan to carry out bloody attacks on the population, and he is escalating attacks on Pakistan, which threatens to destabilize that country and provoke a broader war. While insisting that social programs be cut across the board, Obama has increased military spending to $640 billion this year. At the same time, the administration is keeping in place the Bush administration’s attack on democratic rights, while opposing the prosecution of government officials guilty of violations of international and domestic law and attempting to block the release of photographs documenting war crimes.
12. Obama won the 2008 election by appealing to popular opposition to the Bush administration and the desire for “change.” However, the class character of the new administration is emerging ever more openly. The actions of the new administration demonstrate that nothing can be changed so long as the working class remains tied to the Democratic Party and the two-party system.