Workers face inflation & debt
By Milt Neidenberg
Now you see it, now you don't. The value of the dollar is
vanishing before the eyes of the world.
It has lost over 30 percent of its value against the euro,
the currency of the 25-member European Union. Speculators have
become magicians manipulating the currency markets.
On Nov. 19, Alan Greenspan, master of mumbo jumbo, told his
counterparts at a Bankers Congress in Frankfurt, Germany, that
the U.S. Federal Reserve Board, which he chairs, will not
intervene to prevent the dollar from sliding further against
all other currencies, including the Japanese yen.
Greenspan was backed up by U.S. Treasury Secretary John
Snow. Speaking in London Nov. 21, Snow lectured European and
Japanese leaders about getting their economies in better shape
if they want to compete with the United States in world
markets.
The imperialist governments are heavily dependent on exports
to sustain economic growth. The cheaper dollar makes U.S.
exports of goods and services more competitive.
The ultimatums from Greenspan and Snow are signals that the
Bush administration has declared economic warfare against its
imperialist allies. The president of the European Central Bank,
Greenspan's counterpart, has called the shifts in currency
exchange rates "brutal."
If the imperialist allies and China decide to cash in the
trillions of dollars of U.S. debt that they hold, it would lead
to a run on the dollar. The consequences would be earth-shaking
for U.S. capitalism.
Forcing a devalued dollar, the world's reserve currency, on
U.S. global competitors will cut short their modest economic
growth. It will incite the transnational bankers and corporate
bosses to intensify their attack on their working classes.
Unemployment and cuts in wages and benefits will intensify for
European, Asian and Latino workers.
Profits before people
Lecturing the world to put its economies in order is the
height of arrogance and hypocrisy. The U.S. economy is out of
control.
The annual U.S. government deficit has gone from zero in
1990 to nearly $600 billion this year. Congress has just
increased the debt ceiling by over $800 billion, to an
unprecedented $8.1 trillion.
The specter of inflation has returned. Too many cheaper
dollars are flooding the marketplace. The corporate bosses and
bankers will be making less profit, following a bountiful four
years. To maintain profit margins, prices on food, energy,
transportation and other essential services have rocketed
upward, exceeding the income of workers and the oppressed.
Inflation has lowered living standards. It takes more
dollars to buy the necessities of life and working and
oppressed people can't afford the goods and services they
produce. So they borrow. Household debt is at an all-time high
and interest rates are on the rise.
It won't be long before the worker/consumer will face more
bankruptcies and defaults. Wall Street's money-lenders have
sucked in over 85 million credit card borrowers, who
accumulated a $2-trillion debt during the last downturn.
The urban work force has been hit hard. New York is a
microcosm of what's going on around the country. According to
GothamGazette.com, November 2004: "Last year about one in three
low-wage full-time workers in this city experienced one or more
of these hardships: their gas, phone or electricity was turned
off because they couldn't pay the bills; they used a food bank
or pantry to avoid going hungry; they couldn't pay the rent; or
a prescription cost too much for them to fill it. ... Almost
half had no health coverage, with the majority lacking
prescription coverage for themselves and ... for family
members."
Bush plans to worsen these intolerable conditions to pay for
his permanent tax relief for the wealthiest 1 percent. The
increase in military spending for the Iraq War to $5.8 billion
a month from $4 billion has diverted $200 billion overall that
could be used to restore social services so desperately
needed.
In Chile, at the annual Asia-Pacific Economic Cooperation
forum, thousands of protesters braved tear gas and water
cannons to confront Bush and U.S. neoliberal policies. They
denounced Bush's genocidal war on Iraq and his designs on Latin
America. Opposed to U.S. globalization policies that export
cheap dollars (capital) to privatize their land, they carried
banners and pro-Cuba flags. This show of international
solidarity and resistance to U.S. imperialism is a splendid
example for advancing the class struggle at home.
Reprinted from the Dec. 2, 2004, issue of
Workers World newspaper
This article is copyright under a Creative
Commons License.
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Email: ww@workers.org
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