Tuesday, 20 January 2009

Those who work for wages are not to blame

The newest issue of the SFL Labour Reporter will be mailed out in the next few days. The cover article is reproduced below. You can download a complete PDF copy of the Labour Reporter here....

Those who work for wages are not to blame

It's probably natural to want to point the finger at someone about this world recession. How did we get into this mess?

The root cause of the problem is the lack of regulations, in other words deregulation, in the financial industry. Insurance giants, investment firms and the big banks can invest where they want, and how they want, with very few rules in place to keep the system stable, let alone fair.

The roots of this recession began when thousands of American folks were lured into loans for mortgages at really low interest rates. The lenders then bundled up those mortgage loans and ‘sold’ them to investors, who speculated on future payments. What the lenders didn’t tell the borrowers was that within a couple of years, they would jack the interest rates way up. Many homeowners couldn’t make the payments and had to default. All that speculated profit blew up.

You may have seen some of the reports in the popular press who blame ‘na├»ve’ people who should not have borrowed beyond their means. But do we really begrudge people trying to acquire their first home? These are often families paying off student loans, some with children to support.

The blame should rest squarely on the shoulders of the lending institutions who lied to their customers. They created billions of dollars of toxic debt, and now taxpayers are footing the bill.

These same corrupt banks then stopped lending to their CEO buddies at the Big Three, putting the auto industry in peril. Yet we’re being told by the mainstream media that it’s because unionized autoworkers make $70 an hour in wages, which is a lie.

Do we as a society support the CEOs of the auto industry who flew their private jets into Washington asking for billions of dollars in bailout money? One of the key problems with our system is that the owners are taking escalating amounts of profits and filling their own pockets.

In the American bailout bill, was a cap put on CEO salaries? It sure wasn’t.

Don’t let anyone tell you that the working class is to blame for a system that feeds the greed of the rich.


Partisan Hobo said...

Back In December, I wrote about the lobbyists on Flaherty's economic advisory council. Today's budget seems to suggest that their "advice" results in millions of dollars for their pet projects ... would love to know if you see any other connections or have any other insight. Post is up at www.partisanhobo.com.

leftdog said...

And here we have a Conservative Cabinet Minister attacking working people who have lost their jobs in this economic downturn!!