Commentary

San Jose, CA – On Sept. 18 the Federal Reserve cut two key short-term interest rates for bank loans by one-half a percentage point. These interest rate cuts followed on the heels of dismal economic data on jobs and the worsening housing and mortgage bust, as well as continued instability in financial markets. While stock markets around the world celebrated the larger-than-expected interest rate cuts with large increases, the Federal Reserve action reflects weakness, not strength, in the economy.

San Jose, CA – In July the U.S. housing market hit new lows, with the lowest number of permits for new homes and the lowest number of construction starts in more than ten years. Then in August financial markets across the globe were shaken by the growing defaults on mortgages in the United States.

San Jose, CA – Between September of 2005 and December of 2006 permits to build new homes went down 28%, as home sales have dropped and prices have started to fall. In the last 50 years there have been seven other declines in building permits of 25% or more, and every single one has been followed by a recession, the most recent being the 1990 recession.

Chicago, IL – Across the country the rich are grabbing up land, pushing poor people and people of color to the suburbs and on to the streets. In Chicago this has meant the demolition of whole communities, the tearing down of public housing, violations of renters’ rights, condo conversions and working-class displacement.

San Jose, CA – According to a U.S. Census Bureau report released in October, the cost of renting rose even faster than the cost of buying a home between 2000 and 2005. Over those five years, rents rose 20.7% as compared to an 18.75% rise in homeowner costs (these are nationwide averages, the increases for both in some areas such as California have been much higher).

San Jose, CA – The official U.S. unemployment rate rose from 4.6% to 4.8% in July as the economic growth slowed over the past months, creating fewer jobs. The number of long-term (15 weeks or more) jobless people rose, as unemployed workers had a harder time finding new jobs. A better measure of unemployment, which includes workers who have to take part-time jobs because they can’t get full-time work, and those who temporarily gave up looking because they haven’t been able to find a job, also rose in July to 7.8%.

Republicans Respond with Tax Cuts for Rich

San Jose, CA – When the price of gasoline spiked above $3 per gallon, Republicans responded by proposing a $100 rebate. This was widely condemned as a public relations stunt at best and an insult at worst as working families are weighed down by high gas prices, rising interest rates and cuts in pensions and health care. But you don’t hear complaints about the Republicans coming from the rich.

San Jose, CA – Sales of existing homes slowed in January for the fifth month in a row, while inventories of unsold homes rose to levels not seen in years. The biggest drops took place in the hot markets of California, south Florida and Massachusetts, all of which saw sales of existing homes fall more than 20% from a year earlier.

Republicans plan more tax cuts for the wealthy, slashing of social programs

San Jose, CA – Just before the holiday recess, Republicans in the House of Representatives and Senate agreed to cut social programs that serve the poor and working class, such as Medicaid (health care for low-income people), student loans for college, TANF (Temporary Assistance for Needy Families), and Medicare (health care for the elderly). At the same time Republicans in the House of Representatives passed a bill backed by President Bush to extend Bush’s tax cuts for the well to do and businesses.