So why did Carter replace Burns? And will it make any difference in the economy?

The twelve regional banks making up the Federal Reserve System take deposits from private banks, hold money for the federal government, and issue currency. The Federal Reserve acts as the pivot of the monetary and credit system, able to manipulate the amount of money and credit available to the rest of the economy.

The regional reserve banks are not owned by the government but by affiliated commercial banks. The Federal Reserve thus combines features of a government agency and private corporation. A key feature of the board is its "independence." That is, there is no pretense that it is controlled by the electoral process or accountable to the public.

With inflation, unemployment, and cyclical crises growing worse, Democratic and Republican politicians divert attention from the real cause of these ills--the outmoded and decaying capitalist system--by blaming it all on the "Fed."

In fact, the policies of the Federal Reserve are largely dictated by the policies of the rest of the capitalist government. For example, when the government is running a deficit, the "Fed" has little choice but to issue enough money to cover whatever portion of the deficit cannot be financed through sales of bonds to banks and other financial institutions, even though releasing this additional money is highly inflationary.  
 
January 12, 1953
NEW YORK--At a huge mass demonstration in front of City Hall this afternoon, striking members of the Transport Workers Union-CIO roared their approval of President Michael Quill’s declaration, "We will strike, strike, strike, until hell freezes over!" They are fighting for the 40-hour week with no reduction in pay.

They are demanding 48 hours pay for 40 hours of work, plus five hours of guaranteed overtime.

Their demand for guaranteed overtime sharply demonstrates the pressure of high living costs. Any one who has ever been packed into a New York bus during the rush hours knows that the only thing worse than paying for the privilege of "riding" in one of these gas-fuming sardine cans is the job of jockeying it through jammed-up traffic on the company-demanded split-minute schedules. Nothing but galloping prices could make any one look for overtime on the nerve-shattering job these men have.

The companies are trying to utilize the strike as an excuse in putting over one of the most brazen swindles yet perpetrated on the long-suffering strap-hangers of this city. Conceding the 40-hour week in "principle," the operators nevertheless insist that they cannot and will not grant it unless City Hall lets them jack up fares another nickel to 15 cents.

What are the facts? A 15 cent fare...means a minimum increased take of $45 million a year. The N.Y. Times, on the basis of company figures, estimates that to meet the men’s demands would cost $8 million a year. Thus they come out of the deal with an additional yearly profit of $37 million!  
 
 
Front page (for this issue) | Home | Text-version home