-- 27 June 2007 --

IMF Warns about US Economy Recession

Washington, Jun 23 (Prensa Latina) The International Monetary Fund has predicted a possible recession of the US economy in 2007, due to a crisis in the real estate market since the beginning of the present year.

The IMF said in its annual report on the state of the US economy that the authorities share the same point of view as the international credit institution's experts.

"We share the criterion of the US authorities, which stated that the economic scene has been pushed to an economic and inflationary fall," the IMF said.

"There are many risks in this scene," warned the IMF, which announced the possible fall, correcting the prediction of growth for the current year to only two percent, instead of the previous 2.2 percent.

The institution highlighted that the growth should be speeded up to reach an average 2.75 percent by 2008.

"Growth is dangerously on the edge of the 2-percent stagnation, associated to recessions seen in the past," the IMF said.

The IMF leaders explained that when the economic growth falls to two percent, there is a recession trend.

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In Debt We Trust director Danny Schechter reports on the film and campaign.

The buses were arriving as I was leaving the Take Back America conference Tuesday afternoon in Washington to bring delegates and activists to Capitol Hill to join union members rallying for passage of the Employee Free Choice Act, which was being debated in the Senate.

According to one report: “Defying 97-degree heat, heavy humidity and a planned Republican filibuster, several thousand workers and their allies rallied in Washington Tuesday to demand the Senate pass the Employee Free Choice Act.”

The bill’s passage was far from certain as labor fights an uphill battle for its survival and the right of workers to join unions. This issue is one of many that is critical to Democrats who want to take the government back because unions have long been main funders and grass roots energizer of the party.

Writing on TomPaine.com, Dmitri Iglitzin reprised labor’s challenge and eroding position.

“In many ways, the lack of overwhelming support for EFCA is surprising. Under current law, workers who want to form a union must currently undergo a risky, grueling and time-consuming “pre-election” period that culminates, if they’re lucky, in an election held under the auspices of the National Labor Relations Board (NLRB). If they’re not lucky, the workers are instead fired or otherwise discriminated against. One recent study, conducted by the Center for Economic and Policy Research, found that about one in five union organizers or activists can expect to be fired during the pre-election period.

Should the workers succeed in unionizing, moreover, their chances of ever obtaining a collective bargaining agreement with their employer are grim. According to the Federal Mediation and Conciliation Service, a federal agency, nearly half of newly organized bargaining units fail to negotiate a first contract within two years of a successful organizing drive. The result of these barriers to successful unionizing is manifest in the steady decline of union membership, now 12 percent of the workforce (7.4 percent in the private sector), down from 20 percent in 1983 and 35 percent in the 1950s.”

It's not surprising that in a corporate dominated country, labor has to struggle endlessly for its rights. Leading the fight against the bill are big lobbyists fueled by big money. According to the AFL-CIO, these groups hide their special interests by claiming to be champions of democracy in the work place, and never revealing their economic interests in the issue. Here’s what the battle turns on, according to the Center for American Progress:

"Under current law, an employer can insist on a secret-ballot election, even after a majority of employees express their desire to organize. The proposed law "would give employees at a workplace the right to unionize as soon as a majority signed cards saying they wanted to do so."

Suddenly, business interests which usually line up against extending more democratic rights in the society insist on it for employees knowing they can intimidate them to vote against unions. Those well-known guardians of democracy, the Chamber of Commerce, spent a record $72 million on lobbying. VP for labor policy Randel Johnson told The New York Times, “We’ve targeted [The Employee Free Choice Act] as our No. 1 or No. 2 priority to defeat.”

But there is something more profound underway here that neither the unions nor the activists that rallied to support them seem to connect with: the fact that our economy has changed fundamentally from one built around production in factories to one spurred by consumption at malls. It is easy to see workers getting targeted as a group but harder to understand how we as consumers are under a more profound economic attack. As privatization sweeps through the society, there has been a privatization of economic pain.

As jobs are outsourced and unions shrink, there are new and often silent battles being fought in our post-industrial society that most politicos and unions don’t seem to understand or relate to. Economist Michael Hudson explains it this way in my film IN DEBT WE TRUST:

“People have difficulty realizing that the new economic conflict in our society is between creditors and debtors. There’s still a tendency of many left-wingers to think in terms of the class war and the wars between employers and employees. But the real economic war, where all the money is being made is between creditors and debtors because that’s the free lunch.”

No wonder that financial institutions and real estate companies are now the leading source of political money. Their influence steers politicians away from protecting consumers as we saw when, and as my film reveals, $151 MILLION was spent on lobbying on the bankruptcy bill which was passed with bi-partisan support. So when it comes to money issues that matter, the Democrats are as much a part of the problem as the Republicans.

You just can’t see the world or real power through a narrow partisan lens as much as you may want to. I was unsuccessful in getting my movie and the issues it raises about the financialization of our economy on the agenda at the Take Back America conference, although Co-Director Bob Borasage has now promised to sponsor a screening in DC. (And you can too!).

I have also been unsuccessful so far in getting unions to show the film, even though I spoke with some prominent leaders who agreed that the issue is important and that their members are hurting. Perhaps their reticence has something to do with revenues they depend on from union credit cards. Jonathan Tasini explained in his blog that there is a lot of credit card money fueling the labor bureaucracy, “the AFL-CIO pockets $25 million a year from the deal with Households Bank.”

How do we get the presidential candidates to start talking about the nearly $3 TRILLION dollars in consumer debt, and the mounting trap that this leads to for so many families? Common Dreams just ran a report explaining that thousands of liberal young people can’t take time off to get involved in politics because they are working overtime at lousy jobs to pay off their student loans and debts.

And what about the millions of Americans who have turned their homes into ATM machines through equity loans in order to pay bills? When those loans run out after the equity is gone, what do they do? Two million families face the foreclosure of their homes this year from practices like this and predatory sub-prime lending abuses. And what about those Americans relying on pricey payday lenders and check cashing joints?

In the name of economic justice, we must add the demand for debt relief to all of our other concerns. We need a moratorium on foreclosures. We need to start to talking about this problem as an issue. If Bono can win debt relief for many African countries, we can do the same in America. We can’t just take America back from the Republicans without also taking it back from the banks, hedge funds and predatory lenders.

Throughout American history, debt has been a key issue. It was one of the problems that led the colonists to revolt against the British. Main Street has been struggling for liberation from Wall Street for decades with waves of populist movements that won many reforms and a better life for millions. Just as there are business cycles, there are cycles of protest. Why are our political parties submerging this issue?

Conferences in hotels may help promote political focus, but it is in the streets outside the beltway, not in the suites within it, where change has to happen first. Political races matter but they are not the only road to transforming a society in which economic inequality is deepening.

* * *

That’s our report for this week. Share your credit and stories and news items and/or comments with us by writing to  dissector@mediachannel.org or Give us some feedback, and send in news items you think others should know about.

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If you have comments or suggestions, share them with me at dissector@mediachannel.org.

Danny Schechter
Editor Mediachannel.org
Director IN DEBT WE TRUST
InDebtWeTrust.com
212 246-0202x3006

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Reader's Response

Bonnie writes:

I think that credit card companies should be banned from sending the newly bankrupt any credit card offers. Since they cannot file again for 8 years then make it 8 years that they cannot bombard the newly bankrupt with offers of credit.

These offers are dreadful and predatory. Unfortunately, there will always be people who are desperate, mentally impaired, and just plain ignorant enough not to read the fine print.

Tribute and First Premier are two of the worst. Orchard Bank says you must make at least 12 thousand dollars a year to qualify for a credit card from them. Who in the USA can even live on 12 grand a year, let alone have a credit card. 12 grand is way below the poverty level and yet they are offering credit cards to people who only make that amount! Shameful!

Oh, but the message is loud and clear that:
We need a credit card.
We deserve a credit card
We need to establish credit.
We need to re establish credit.
And on and on!

Just as some people should never touch alcohol, some should never touch credit cards!

I believe the message that needs to be heard loud and clear is don't even think of applying for a credit card unless you have a steady income and an emergency fund so you can pay the balance off every month.

Yet, I listen and read "financial experts" and they may make a few comments about the dangers of credit cards, but then they go on to say "how to play the credit card game." I have to wonder sometimes who is paying them? The credit card companies?

Except for Dave Ramsey and a group called Debtors Anonymous I have yet to hear anyone else say to live without credit cards.

Except... A couple years ago there was a man interviewed on TV who was celebrating his 100th Birthday. He was asked to give a piece of advice. He said he never had a credit card and warned against them.

Maybe living a life without them contributed to his long life. Less stress perhaps?

Thanks for reading...

Bonnie