Reprint from USW@Work, published by the United Steelworkers
BLAME WALL Street and lax regulation. Blame global capital and bad trade deals. Blame banks and an overzealous mortgage industry. But don’t blame workers for the mess our economy is in.
PUBLIC EMPLOYEES didn’t deregulate the financial services industry or promote complex and risky investments like derivatives. Their pensions didn’t push Wall Street to a crisis.
“THE PEOPLE who do the work – those who take care of our kids and try to give them a good education, the firemen who run into burning buildings to save us, the policemen who patrol our streets at the risk of taking a bullet, the nurses who fight for patient care or the steelworkers who are fighting to keep their plants open – we’re not the problem,” said International Steelworkers President Leo W. Gerard.
IT WAS the September 2008 collapse and bankruptcy of the Lehman Brothers investment bank that signaled the start of what is now called the Great Recession.
LEHMAN HAD had borrowed significant amounts of money to fund its investments, much of it in housing-related assets that made it vulnerable to a downtown. When the subprime mortgage crisis hit, Lehman faced an unprecedented loss and filed for bankruptcy.
LESS THAN a week after Lehman’s filing, the Bush administration asked Congress for powers to buy bad debt and mortgages. On Sept. 29, after the House rejected a $700 billion rescue bill, the Dow fell 777 points, its largest one-day point loss in history. The Senate passed the bailout on Oct. 1. The House approved it on Oct. 3 and President George Bush signed the bill.
BY THE end of October, it was very clear the country was in recession as consumers cut back on their spending by the biggest amount in 28 years.
THE RECESSION led to unsustainably high unemployment, which still exists today, and continued bad economic consequences, including budget problems at state and local governments.
MUCH OF the problem can be traced to tax revenues that have fallen because of the recession and political decisions to give huge tax breaks to the rich.
IDLED BUSNESSES no longer pay taxes. Nor do the 27 million people who are still unemployed or underemployed.
TO JUSTIFY the assault on public employees, some falsely blame employees for the dismal conditions of public pension funds. But public sector workers did not lose trillions of dollars in risky Wall Street investments. Wall Street money managers did that, not ordinary working people
FOR MORE Information, go to http://www.usw.org/blamewallstreet.