It's still the economy!

by Gus Hall

This article was reprinted from the March 16, 1996 issue of the People's Weekly World. For subscription information see below. All rights reserved - may be used with PWW credits.

The following is an excerpt of Communist Party National Chair Gus Hall's report to the CPUSA's 26th National Convention March 1-3 in Cleveland, Ohio.

Economists, statisticians, political pundits and Wall Street are all trying to put a cheerful face on a pretty gloomy looking U.S. economy.

Recently the lead story on page one of the New York Times admitted, "The meager nine-tenths of 1 percent economic growth for 1995, together with layoffs and insecurity, is the reason consumers are keeping a tight grip on their wallets.

Not to worry. Alan Greenspan to the rescue, with another interest rate cut injection.

Using the shutdown of the government as a partial explanation, Greenspan optimistically predicts "a rebound is more likely than a slide into recession." And, he gets away with this. And to top off the latest upbeat economic prediction, White House officials announced that, "springtime should bring a reawakening of growth."

Incredibly, millions of people out of jobs, laid off and millions living in fear of layoff, are now asked to believe that we are headed for a "rebound," that with the coming of spring the economy will blossom and grow.

There is no comfort, or facts, in such economic gibberish. It is no wonder that so many have so little confidence in the government.

In the long term, they have to deal with the continuing overall decline in their living standards and quality of life. And the fact that their children will probably not have an easier life - an education, a job, a career, a home and an income to raise a family.

In fact, today both generations, parents and their children are the long-term victims of a dying system that is creating havoc in its death throes trying to forestall the inevitable.

The U.S. economy is suffering a terminal structural crisis. It is a long-term systemic crisis that cannot be cured.

It is typified by the closing down and moving out of not only huge plants, but whole industries. And the crumbling infrastructure of our cities - roads, bridges, railways, public transportation, public schools and hospitals. And the corporate contamination, pollution and poisoning of our environment and precious natural resources.

Thus, there are two kinds of crises, different but related. The Republican-made crisis. And the overall strategic, long- term crisis of a decaying capitalist system.

The U.S. economy also suffers intermittent cyclical crises of overproduction and underconsumption. These crises are overcome only with massive doses of patchwork measures, that usually shift further the burden from the rich to the poor.

These are the short-term problems. For example, the Contract is already making cuts in safety net programs that are already stripped to the bone. This is going to create mass hunger and homelessness.

Corporate downsizing, called restructuring by the companies, has spawned one of the most explosive economic, social and political disasters in years.

A 1994 Labor Department survey of almost six million who lost their jobs in 92 and 93, reports that only 30 percent found full-time jobs with equal pay. Another 25 percent were still jobless, while 28 percent found full-time jobs with lower pay. The rest were mostly part-time workers. One worker in 10 is part-time. Counting the unemployed, the underemployed and part-time workers, over 20 million workers are jobless.

Most seriously hurt are African American, Chicano, Mexican American, Puerto Rican, other Latino, Asian, American Indian workers and women. Last hired, first fired, is still very much in practice.

Between 1975 and 1995 the buying power of workers has fallen by 25 percent. In the same period productivity has risen over 30 percent. Meanwhile there are more multi-billionaires than ever - as poverty and declining wages on one side of the tracks begets ever greater concentrations of wealth on the other side. Corporate profits took a whopping 41 percent jump last year and corporate salaries have gone through the roof. These figures give the lie to the corporate claim that profits and jobs go hand in hand.

For example, a recent Newsweek article on "The Hit Men" of corporate downsizing said, "It used to be a mark of shame to fire workers en masse. Today Wall Street loves it. But the layoffs are frightening people and causing a political backlash. It is called "in-your-face capitalism."

For example, Robert Allen, AT&T, salary-$3,362,000; laid off 40,000 in January.

Walter Shipley, Chemical-Chase Manhattan, salary-$2,496,154; laid off 12,000 in August 95;

Robert Stempel, GM, Salary-$1,000,000; laid off 74,000 in December 91.

Edward Brennan, Sears Roebuck, salary-$3,075,000; laid off 50,000 in 94.

Louis Gerstner, IBM, salary-$2,625,000; laid off 60,000 in 1995.

Keep in mind, those seven-figure salaries are per year, and don't include stock options, perks and bonuses for doing the dirty work.

For every 1,000 workers a corporation lays off, the value of their stock goes up 10 points on the stock exchange. And their profits soar. That's why these fat cats with the pink slips enjoy their dirty work so much.

In the same article, Newsweek says:

"Today, you lose your job, your ex-employer's stock price rises, the chief executive gets a fat bonus and raise.

"Is something wrong when stocks keep rising on Wall Street while Main Street is littered with the bodies of workers discarded by huge companies like AT&T, Chase Manhattan and Scott Paper?

"Firing people has gotten to be trendy in corporate America. Millions of Americans believe they are being screwed by a corporate America and Wall Street playing nasty hard-ball with the American workforce."

The millions of layoffs are from every level in a corporation. They include skilled and unskilled, white collar and blue collar, professionals, and managers.

Working people live in daily fear of being the next victim. Economic insecurity effects the whole class. And just around the corner is the very real possibility that the economy is headed into another economic crisis.

The government keeps announcing that they have created millions of new jobs. But what they don't announce is that most of the new jobs pay half the wages the workers got before being laid off. And millions of those jobs are temporary, part-time, minimum wage and non-union.

Pat Buchanan plays games with the very real fears people are feeling. Buchanan is a total fraud and his recent conversion to a pro-labor stance is a complete deception. Buchanan and his fascist fringe forces have no solutions. And they could care less about the working class and the poor.

For all his rantings against the Fortune 500, the truth is that Buchanan would sooner get rid of immigrants, all the racially and nationally oppressed, the Jewish people, the poor and homeless than ask one corporation to give up any of its profits.

The fascist-fringe have only demagogic slogans and no solutions because real solutions would have to come from corporate profits and the military budget. And the truth is that there isn't much more sacred and untouchable to the Buchanans than corporate profits and a huge military.

Real solutions have to go in the direction of cutting corporate profits.

Real solutions have to include a massive, federally-funded , public works programs creating millions of new jobs, at union wages, that could put people back to work rebuilding our cities.

The Martinez Jobs Bill has all the necessary ingredients. But getting it passed means getting masses of people, labor unions and leaders, behind it. The work in Southern California and some other districts is groundbreaking both in getting support for this $250 billion jobs bill, but also in developing working relationships with labor and trade union leaders.

If organized broadly, the fight for union jobs in the Martinez Bill can be a mobilizer for the millions of unemployed, welfare recipients, African Americans, Puerto Ricans, Mexican Americans, and American Indian peoples, youth, seniors and all those who have a stake in the outcome of the elections.

We also have to call for solutions like a six-hour day with no cut in pay and for the cancellation of the national debt (which is owed mainly to banks and other huge financial institutions).

Our new Labor Program, "Labor at the Turning Point," is finding friends and supporters among many sections of labor and people's movements. It contains the kind of advanced, militant solutions that are needed and winnable.

However, to change the balance of forces in U.S. politics we must - and we can - block the Contract on America and its backers. Defeating the Contract Republicans and pushing the extremists back to the fringe has to be our number one priority until November. We have to build mass anti-contract coalitions with the strength and power to get out the vote and to vote against the Contract.