Stuck with the bill again

By Mike Tudoreanu

Two weeks ago I wrote about the way the deficit is being used as an excuse to make American workers pay for the economic disaster caused by wealthy capitalists. But the game they are playing doesn’t really start with the deficit, and its effects are not limited to national-level decisions made in Washington. It starts with gambling, and ends with all of us paying for it, even right here at the University of Massachusetts. Here is how it works.

First, banks and other financial institutions behave like gambling addicts in the world’s largest casino. They bet that stock prices will keep going up, that large companies will not fail, that all mortgages will be paid on time, and in general, that good things will just keep happening forever without exception. Because all these bets are interconnected, all it takes is a few of them going bad to bring the whole financial system crashing down like a house of cards. One bank can’t pay its debt to a second bank, which makes the second bank unable to pay its debt to a third, and soon enough they’re all out of money. Now, if all the banks are out of money, they can’t provide loans to companies which want to expand, so businesses can’t grow, and the economy comes to a screeching halt.

You might think the solution to this problem would be for the government to come in and punish the capitalists who caused the mess in the first place – for example, by taking control of the failing banks and squeezing enough money out of them to get the economy started again. But this would mean that the owners of those banks would be the ones paying for the recession. And that doesn’t make any sense now does it?

So, instead, the government did the exact opposite. Rather than taking money from the people who caused the recession, it gives them money in the form of bailouts. The idea is that if only we give them enough money, they will eventually start using some of it to start loaning again. And where does the government get the money for these bailouts? Well, it could raise taxes on the wealthy, but that would mean making the rich pay for their own mess, something the U.S. government seems absolutely determined to avoid. Besides, taking money from the rich so you can give bailouts to the rich is rather pointless. The other option, of course, is to get the money from working people somehow. And that is exactly what the U.S. government – under a Democratic administration no less –  chose to do.

Asking workers to pay money directly into the accounts of bankers and CEOs would have been the most simple and straightforward way to go about it, but presumably someone thought that might cause a bit of popular anger here and there. So it had to be done in a less visible way. To begin with, the money for the bailouts was borrowed. This increased the deficit to unprecedented levels. Then, after a brief pause of a little over a year, politicians began calling for an immediate reduction of this great deficit. These calls were spearheaded by the Republicans, but the Democrats soon fell in line – showing true bipartisanship in making the American people pay for the financial meltdown. You see, the way to reduce the deficit is apparently to cut public services like education or health care, which is the same as forcing ordinary Americans to suffer a pay cut. This is the last piece of the puzzle. If they pull it off, Republicans and Democrats will have succeeded in transferring a huge chunk of wealth from workers to capitalists, from the poor to the rich.

This plan to cut the public services, benefits, and/or wages of workers is being applied everywhere, including right here at UMass. I wrote a couple of months ago about the way public education is being slowly privatized. UMass, along with many other public universities, is receiving less and less funding from the state as part of the general drive to cut back government spending. As a result, the University is behaving more and more like a profit-driven business, which involves driving down workers’ wages in order to increase profits.

Graduate student workers – TAs, RAs and so on –  are already paid low wages here, but the University would like to pay them even less. Their wages cannot be lowered directly, because that would be a breach of the contract between the University and the graduate workers’ union. So, the University is currently in the process of looking for loopholes and excuses to achieve a pay cut by other means. This summer, they have unilaterally raised co-pays and deductibles for their graduate employees’ health plan, which has resulted in graduate workers paying over twice as much as they used to for prescription medication. The cost of birth control in particular has been greatly increased in direct violation of the contract. When they were confronted with this fact by union representatives at the beginning of the semester, UMass administrators immediately apologized and promised to fix their “mistake” – but even today, months later, nothing has changed. They have also used loopholes to force graduate workers to accept lower dental and vision benefits. And they have delayed a small promised wage rise for months, arguing they’re having problems with the paperwork.

What is happening at UMass is only a tiny part of a much larger whole. Workers all across the United States are under attack. We are being squeezed to pay for Wall Street’s gambling debt, and it is time to start fighting back.

Mike Tudoreanu is a Collegian contributor. He can be reached at [email protected].