>What They Don’t Tell You About the Economic Crisis.

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Banksy

We are in the greatest economic crisis since the Great Depression. What has become known as “The Great Recession” is affecting millions of working people, not just in the United States, but all over the world. In a dramatic twist of irony it seems that those responsible for the economic crisis received the most assistance from the federal government, were the least affected by the negative ramifications of the crisis, and recovered the quickest from their losses. Many of the major banks that were on the brink of collapse such as Goldman Sachs, Citigroup, and J.P. Morgan Chase, are once again bringing in enormous profits. Where the free market failed for the capitalist class, the welfare state of, for, and by the rich stepped in.

Due to the fact that political system in the United States is made up of two parties -the Democrats and the Republicans- that are in many ways “two wings from the same bird of prey,” that bird of prey being the capitalist system, there are many issues that are not discussed in the discourse between Democrats and Republicans.  One would not expect cheerleaders of the system to continually critique or advocate for radical change to a system that they not only control, but profit from immensely, at least in the short run.

Some issues that are not explicitly acknowledged but are extremely important to keep in mind when thinking about the crisis of the American and global economy include the observations that:

The Great Recession is not over! Just because many of the companies and industries that the government bailed out have returned to profitability does not mean that the average college graduate (yay, that’s me!) is going to find the job search any easier. In fact, over eight million jobs were lost during the deepest trough of the recession and only one and a half million have been added. This is enough to keep pace with the rising amounts of available workers but not enough to make as much of a dent in the unemployment rate.

The real unemployment rate is actually much higher than official reports. For May 2011 the unemployment rate was listed at around 9.1%. This is an extremely high number, but to be officially unemployed one has to have looked for work within the last four weeks. Those that have searched for work but have not searched for over four weeks, also known as “discouraged workers,” are not included. Other “marginally attached workers,” workers that may not be discouraged but have not searched for work because of certain constraints, such as not being able to pay for daycare, are also not included. And neither are workers that are working part-time but want full-time work. If these people are included the actual unemployment rate is much higher. Some estimate the real rate at closer to double the government numbers.

 The Internationalization of American capital. Many staunch advocates of the status quo placate the frustrations of workers by assuring them that the economy is on the road to recovery and that growth will soon return, thus employing the millions or unemployed people again. This is lofty reassurance and pure naivety in today’s global capitalist economy. U.S. businesses have relocated labor abroad where the cost of production for goods and services is cheaper, labor standards are not enforced, and wages are a fraction of what they are in the U.S. This has made the plight of workers all over the world that much more difficult because multinational corporations relocate their operations in a race to the bottom, and since capital is mobile and labor is not, it ends up creating competition between different elements of the working class that should otherwise be more unified in their struggles.

The massive offshoring of U.S. manufacturing jobs over the last several decades is compounded by the technological innovations that render certain human labor unnecessary and less costly, which adds even more workers to the massive pool of unemployed. The manufacturing problem can be somewhat countered by weaker dollar because that would make goods cheaper to produce in the U.S., which would entice global businesses to invest and make goods in America, but it is too little too late and labor is still cheaper in other places abroad. All of this makes the recovery for the American economy that much more difficult, especially when the populace does not have the income to purchase their way out of the recession. This leads us to the next point, albeit in a roundabout way.

-Capitalism’s rapacious assault on the natural world is becoming undeniable and actually threatening the vital ecosystems that make life possible on Earth, which makes the idea of growing the economy out of recession an even more life threatening issue for countless people, animals, plants, that are already threatened by capitalism’s insatiable consumption. Capitalism is not synonymous with sustainability and the Earth can not support a vision of a global economy whereby the entire developing world aspires to become the massive consumer pigs of the United States. The neoclassical party program of unabated, vicious growth is finally reaching a point where capitalism’s natural lust for accumulation is building to such a crescendo that not even the precious finite resources of planet Earth can sustain it anymore. The idea of economies have sustainable, zero growth is a heterodox idea in today’s world but it is becoming increasingly more vital that we search for ways to create harmony with the natural world, rather than waxing poetic about green reform of environmental sustainability while embracing capitalism.

-The rising standard of living via the largest credit card bonanza in U.S. history came crashing down. Many economists and activists on the left have pointed out that since the 1970s the rising standard of living in America was fueled by the largest influx of consumer credit in history. the 1970s was a time when the American worker became more productive by using cost effective technology like computers. Worker productivity increased but the increased productivity did not translate to increased worker benefits or increased wages. Workers were actually making more in the 1970s per hour, adjusted for inflation, than they are today. The increased profits were extracted by business and bankers and injected in the the stock market or other highly capital intensive endeavors. The profits accumulated by businesses were also loaned back to the workers, with interest of course, so they could continue to fund their standard of living.  It was an extremely profitable time for American business and a time when American’s not only had more debt than what they actually made, but were also living outside their means in every way, shape, and form. This problem has not come to a disastrous climax and no one in the government or political apparatus has any real solutions on the table. The American Dream is even more of a myth than it previously was.

The solutions offered by the ruling class are to continue protecting their vested interests in the status quo and to claim that the only way out of the crisis and to balance the budgets that they so irresponsibly managed through war, tax loopholes for the hyper-wealthy, etc., is to cut funding for our schools, libraries, medicaid, pensions, etc. In other words, their aim is to continue to place the burden on the people that had little, if anything, to do with creating the crisis in the first place.


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