EDITORIAL
Can’t Afford the Basics?
Blame Wall Street and the Fed

Mar 3, 2008

The Federal Reserve has let out all the stops. It is pumping so much money into the U.S. financial system, its interest rate for loans to the banks is much lower than the rate of inflation. Of course, government officials and so-called economic experts swear that the Fed is doing it all for us, to help save our homes from foreclosure, stimulate the sinking economy and prevent a recession.

What complete rubbish!

The reality is that the Fed is pumping really cheap money... right into the hot little hands of the very same gigantic financial institutions and the super-rich who were behind the subprime mortgage rip-off and the housing bubble. The collapse of the housing bubble caught all these speculators with their pants down. The Fed stepped right in, handing them lots of cheap money.

Any guesses about what all those super-wealthy companies are doing with it? They’re speculating all over again. This time, they have turned to speculating on basic commodities, like oil, gas, gold, platinum, wheat, corn–basically anything they can get their hands on. They are pouring money into all that stuff driving prices to record levels.

Over the past year, they have shoveled so much money into oil speculation, they drove up the price of a barrel of oil from $60 to over $102 in just one year. They have pushed up the price of wheat so fast, it has actually quadrupled in a year.

And things are getting worse. Over the month of February, this speculation got even wilder and crazier. The price of natural gas skyrocketed by 26%. Cocoa for chocolate, of all things, shot up by 38%. What’s next, record prices for bull crap and bird dung?

The entire capitalist financial system is in the hands of madmen whose only thought is how to make another million dollars in the next five minutes.

Of course, all of this impacts us. Their bets on commodities have quickly worked their way through the supply chain and pushed up prices paid by consumers. Gas prices are a dollar per gallon higher than they were a year ago. Prices for basic foods, including bread, meat, vegetables, fruit, are increasing at their fastest rate in decades.

Families, already reeling from the housing crisis, are getting hit again. Those on fixed incomes are finding that they can’t stretch their checks past the first couple weeks in the month. And experts are warning that these price increases are just the beginning. They are saying, for example, that there could be $4 per gallon gasoline this summer.

Just like their speculation on housing made the family home or apartment completely unaffordable for most working families, now they are doing the same with our food and gas.

When the Fed feeds the speculators with all that cash, it is like putting a gun in the hand of a mass murderer, along with a couple of grenades and a bazooka. This is not an innocent mistake. It’s what the government has always done–bail out the rich at the expense of everyone else.

In their drive to make profits, big companies and banks jump from one mania to another, causing one crisis after another. In so doing, they plunge millions and hundreds of millions of working people into crisis and ruin, while the big money interests are bailed out of their problems by the Fed and various government agencies.

That is the insanity of modern capitalism–a system so old and worn out it needs to be tossed on the trash heap.