United States: Economy floundering, resistance begins

June 4, 2011
Video: Irish-American band Flogging Molly's new single takes on the situation facing US working people.

A subpoena from the Manhattan district attorney on June 3 has added to a growing list of official probes into investment bank and securities firm Goldman Sachs.

Reuters said on June 3: “Goldman Sachs Group Inc now faces probes by several government authorities into derivatives trades it executed in late 2006 and 2007.

“On Thursday, sources close to the matter said Goldman received a subpoena from the Manhattan district attorney, who joins the Justice Department and the Securities and Exchange Commission in examining Goldman's actions.”

A recent report by a Senate subcommittee accused Goldman Sachs of playing a major role in the financial crisis by misleading clients about mortgaged-linked securities.

Reuters said: “The report by [the] Senate subcommittee, headed by Democrat Carl Levin, said Goldman offloaded much of its subprime mortgage exposure to unsuspecting clients as the market for such securities was starting to tank.

“In some cases, the bank dragged its heels when clients wanted to get out of their losing positions.”

The ongoing investigations into Goldman Sachs will offer meagre comfort to the estimated 14 million unemployed workers struggling across the United States.

Nobel prize-winning economist Paul Krugman said in the May 29 New York Times that unemployment in the US was “a continuing tragedy”.

Krugman said: “In a rational world, bringing an end to this tragedy would be our top economic priority … But then, who is talking seriously about job creation these days?

“Not the Republican Party, unless you count its ritual calls for tax cuts and deregulation. Not the Obama administration, which more or less dropped the subject a year and a half ago.

“The fact that nobody in power is talking about jobs does not mean, however, that nothing could be done.”

Workers remain unemployed en mass. The June 5 said only 54,000 new non-farm jobs were created in May, down from 244,000 during April. Yet Democrats and Republicans seem content to employ myriad farcical antics to address the national debt ceiling.

Like hogs at an empty trough, members of congress from both major parties continue to publicly squabble over how best to refill the nation’s coffers.

In a June 1 editorial, the NYT said: “The games that now pass for governing in an increasingly embarrassing 112th Congress are menacing the nation’s future. It was bad enough when Republicans threatened to shut down the government to achieve their extreme and extremely misguided spending cuts, but that threat would have caused temporary damage. “

“The debt limit is something else altogether. If the global credit markets decide that the debt of the United States will regularly be held hostage to ideological demands, it could cause significant harm to investment in long-term bonds and other obligations.

“That, in turn, could damage domestic credit markets and easily spark another recession.”

Indicative of the chasm that exists in the US between the corporate elite and workers is the case of General Electric’s (GE) former CEO Jeffery Immelt.

Immelt was installed as President Barack Obama’s “jobs czar” in January 2011 with the goal, Obama said, to “get the American people back to work”.

Alexandra Brown said in a May 24 LaborNotes.org article: “Flush with cash and celebrated at the White House, GE said the company would still seek to double workers' costs for health insurance and eliminate new hires' pensions ...

“The four-year national contract expires June 19. Contract talks come as GE has cut its U.S. workforce by 20 percent since 2004.

“The company has shed 32,000 jobs by closing plants, such as the many incandescent bulb plants replaced by compact fluorescent bulb plants in China.

“In just 2009-2010 GE closed 27 U.S. locations. The result was that by 2010 only 15,000 workers were left in the 11 unions united in the GE Coordinated Bargaining Committee.”

Paul Krehbiel said in a May 27 LaborNotes.org article that California’s Governor Jerry Brown has “released his revised 2012 budget and announced an additional US$3 billion in new funding for California schools”.

Krehbiel said: “This victory is the result of many months of massive protests and lobbying across the state.”

Video: Irish-American band Flogging Molly's new single takes on the situation facing US working people.

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