Showing posts with label cedit crunch. Show all posts
Showing posts with label cedit crunch. Show all posts

Tuesday, February 17, 2009

It's poor sick old people paying for the bankers

New York City's Department for the Ageing, which runs more than 300 community centres for ageing residents and provides services such as food delivery to the homebound, affordable housing and heating subsidies, has cut its 2009 budget by $4 million and faces another proposed cut, of $9.5 million, in 2010. New York state also is proposing cuts in health care and services for the elderly as part of a drive to close a $13 billion 2009 budget gap. Among the proposals is a cut in the state contribution to the Federal Supplemental Security Income, or SSI, for elderly, blind or disabled people with little or no other income.

"We are outraged that the government, which has spent hundreds of billions of dollars to bail out financial institutions -- and they in turn have given $18 billion as bonuses to their top executives -- has no funds to support vital services for their senior citizens," said New York City head of the State Wide Senior Action Council. " We are of a generation that fought in the sixties," she said. "We're out there doing it again."

City figures show that in 2006, one-fifth of New Yorkers age 65 and older lived in poverty, twice the national average. Advocacy groups say by now it is closer to one-third, and New York is second only to Detroit among major U.S. cities in its rate of poverty among the elderly. Minorities tend to fare worst, with 30 percent of Hispanic, 29 percent of Asian and 20 percent of elderly blacks in poverty compared with 13 percent of elderly whites in New York City.

Friday, October 10, 2008

Who cares about the poor ?

Our hearts bleed for them ...i think not . More than £100 billion will be wiped off the personal fortunes of Britain's wealthiest industrialists and entrepreneurs in the coming months as tumbling stock markets and sliding property prices take their toll according to The Times . What will the effect be on those super-rich , i wonder . One less house in their tropical paradises , one less luxury limosine ...

Certainly it will not the same as the consequences the Credit Crunch will have on the working class .

The number of people seeking advice from the Citizens Advice Bureau about how to manage their debts has surged by a third in the past year according to this BBC report. 77,000 new callers in England and Wales with mortgage and loan arrears.

"These figures show how the current economic situation is hitting vulnerable and low-income households the hardest."

Mortgage lenders, on average, started repossession action when people were four months into their arrears. No government bail-out or rescue for the poor .

House repossession was rated as the event most likely to cause mental health problems according to a survey.

"Even for people lucky enough to hang on to their home, the stress and worry of arrears building up can be enough to harm your mental health - this survey shows it worries millions of us."

Wednesday, October 08, 2008

The Crunch of the Matter

From one of our comrade fellow bloggers

Quoth Alistair Darling:
"The Financial Services Authority has announced a further increase from tomorrow to the compensation limit for retail bank deposits to £50,000 per depositor, which means £100,000 for joint accounts. That measure will ensure that 98 per cent. of accounts are fully covered."

Now, quoth Iain Duncan Smith:
"At the Dispatch Box, the Chancellor mentioned, quite rightly, that our protection covers about 98 per cent. of all depositors, but he will also recognise that we have significantly more money on deposit than Germany does. The reality is that that 2 per cent. represents a very significant amount of money. What concerns me right now is that, given the febrile nature of the markets—watching little things and then panicking—if they see any flight of capital, even that 2 per cent., towards Germany, it could cause another stampede and another crisis. I recognise the Chancellor's problem about indicating what he may or may not do, but does he not recognise that that 2 per cent. alone is perhaps enough to tip over the markets if they saw a flight of that money to, say, Germany or even Ireland?"

So, what they are saying is that the vast majority of accounts in the UK hold less than £50,000 (£100,000 for joint accounts) in retail banks.What they are saying is that there is an incredible disparity of wealth - but that the very wealthy have the capacity to cause crises by the overwelming might of their money.

Let's be clear, what this means. Economic crises are not natural phenomena, they are the results of the owners of society exerting their influence. They are profoundly political - the wealthy making us dance to their tune. The wealthy on strike.
Capitalism causes a crisis by its very existence, starvation, starvation related diseases, gross poverty, curtailled life-spans, wars - they are all ignored as background noise.
When the capitalists feel the pain, then we are all made to jump.
This isn't a case of being for or against bail-outs - after all, who can blame the man with a gun to his head - but a matter of being for or against capitalism.

Our only demand must be: "End class society!" else this will all happen again. It is not a glitch, it is politics, the political decision of the real voters to vote with their feet.

From our discussion forum
Robert Reich, former Labor Secretary under Bill Clinton has an interesting article in the current New Statesman:
"The problem lies deeper. Most Americans can no longer maintain their standard of living. Remember, Wall Street's near-meltdown originated with the bursting of the great housing bubble. That bubble had allowed millions of Americans to take money out of their homes byusing their rising home values as collateral for loans. But now the bubble has burst, those homes can no longer be used as piggy banks.…The bubble masked this basic reality: for most Americans, earnings have not kept up with the cost of living. The earnings of non-government workers who are paid by the hour - and who comprise 80 percent of the American workforce - are lower today than they were in 2000, adjusted for inflation. They are barely higher than they were in the mid-1970s"

This fact is so undeniable, that even the `CIA world fact book' (a US foreign policy reference guide - describes the situation in the US as:
"The onrush of technology largely explains the gradual development ofa "two-tier labor market" in which those at the bottom lack theeducation and the professional/technical skills of those at the topand, more and more, fail to getcomparable pay raises, health insurance coverage, and other benefits.Since 1975, practically all the gains in household income have goneto the top 20% of households."

Now, for Reich this becomes a basic under consumptionist theory –that Labour was unable to buy back its produce. In simpler terms, it shows the basic failure of the sub-prime lending model. Lending to labour when wages aren't rising meant the whole of that lending relied on continually rising house prices, as soon as the rise stopped, the pyramid scheme failed.I think the most significant part of this crisis is that it shows how capitalism cannot meet workers' needs. All the talk of irresponsible lending masks the fact that in order to get and keep a roof over their heads, workers resorted to massive quantities of debt... this is where our focus should lie.
Obviously, upping wages would not simply end the problem, because cash strapped firms would be unable to pay them. But I think thisdoes confirm a class centric view that a weak working class is actually bad for capitalism – certainly, for advanced markets. I once read that the US industrialised so rapidly due to the small sizeof its skilled working class – this compelled industrialists toinnovate and improve the intensive exploitation of capital. The converse is true if skilled Labour is plentiful.More pertinently, if productivity has been rising without wage rises to compensate, this too could affect the quantity of money capital kicking around, hence feeding the stock market/banking bubbles...As I say on my blog today, the crisis is nakedly political - what weare calling a crisis is tantamount to strike action by the owners of the world, as they try to protect their investments and their income.I think we need to avoid giving the impression that it is a mechanistic problem, rather than the result of conscious human action in an unequal society...[An] interesting factoid from Alistair Darling's statement yesterday, by guaranteeing accounts up to £50K (£100K in joint accounts) they are guaranteeing 98% of deposits. That's a gross amount of inequality,because the remaining 2% contain collosal amounts of cash, sufficient to cause bank runs by their chasing security and returns.

That 98 per cent of deposits contain less than £50,000 but of the 2 per cent that were above this, they accounted for about half of the total amount desposited. In other words, the top two per cent have as much on deposit as the other 98 per cent put together, yet another confirmation of the Party's case over the years.

Monday, March 31, 2008


Fewer pupils from deprived backgrounds are going to university in Scotland despite a raft of initiatives to widen participation, according to a new report.

In 2006-07, just 14% of school-leavers from secondaries in the lowest participation areas for higher education went to university compared to 19% in 2002-03. Over the same period, the proportion of pupils from the schools which enjoy the highest rates of progression to higher education has fallen only slightly, from 31% to 29%.

One of the aspirations of the government expansion of higher education in the mid-1980s, and then again in 1992, was to allow wider participation, but the main beneficiaries have been the "middle" classes.

John McClelland, chairman of the Scottish Funding Council said more should be done to address inequalities of opportunity.

A Scottish Government spokesman said: "It is unacceptable that an educational gap between advantaged and disadvantaged people opens up early in a child's life and continues throughout."

Yet another failure of well-meaning palliatives .

Socialist Courier also wonders if the UK will follow the growing trend in the American student loan market where banks including HSBC, have pulled out . In the US, many undergraduates take out a federal guaranteed loan and top up their financial needs with a private loan from lenders such as Bank of America, JPMorgan Chase and Citi-group. In the academic year 2005-06, $17 billion in private student loans was used to finance higher education. Banks have become reluctant to offer private student loans because worsening credit conditions have meant that they cannot package up the loans and sell them on. The brightest students who win places at America’s rich Ivy League universities will be affected less because of generous bursaries - which do not have to be repaid – less able students applying to other institutions are expected to face difficulty in securing private loans to fund their study. At one end of the field is Harvard University, with $34 billion of endowments, and at the other are many community colleges and low-tier universities with limited resources.
"...those students with poor credit scores or without the rich uncle co-signers [loan guarantor] may have real problems funding themselves.” The Consumer Bankers’ Association, said