Green shoots of economic recovery? Some economic commentators and financial journalists have divined the ‘green shoots’ of economic recovery’ growing out of the present crisis. Perhaps the wish is father to the thought. Are they right?
The economic crisis and the poor countries The knock-on effects of the crisis have already hit Hungary, Lithuania and Latvia. Other countries in the region are also in the firing line. Governments are going down like ninepins. There is no end in sight to the economic and political turmoil. The so called "emerging" economies have been brought to their knees.
The Great Depression It is the working class of the world who will really suffer from the present crisis. Globally, the UN estimates that unemployment will reach 220m this year. Out of a global workforce of about 3 billion, that’s "only" 7%. But this figure leaves out millions of hidden unemployed who just cannot even begin to look for work. And as a percentage of those working in sweat shop and factories around the globe, it is more like 20%.
The Financial Crisis and the Auto Sector The crisis in the auto industry has reached huge proportions and is now affecting nearly every country. Demand for vehicles has fallen sharply all over the globe, with sales reaching lows not seen for three decades. If the main auto manufacturing companies go under, there will be millions of jobs lost and a massive blow to the rest of the economy, which would have a disastrous effect on the living conditions of millions of workers around the globe. So what is the answer?
The crisis of world capitalism is gathering speed The crisis of world capitalism is unfolding relentlessly and with gathering speed. First came the financial crisis (the so-called credit crunch), but now the second phase has begun - the crisis of the real economy - and it is accelerating as each day goes by. This is leading to sharp changes in consciousness, rising working class militancy and the beginnings of polarisation within the labour movement itself.
Top Economic Strategist warns of ‘Catastrophe and Revolution’ Martin Wolf in the Financial Times today: “…this would be a recipe… for xenophobia, nationalism and revolution… Everything must be done to prevent the inescapable recession from turning into something worse… Deflation is a real danger… At stake could be the legitimacy of the open market economy itself… the danger remains huge and time is short.”
Capitalism has failed utterly Over the past weeks, Britain, many other European countries and the US have announced plans to nationalise large chunks of the financial sector, thereby taking a good proportion of the commanding heights of the economy into public ownership. A step towards socialism one might wonder. Quite the opposite reassures us the Financial Times.
Panic in world markets Panic has gripped the stock markets of the world. Things are completely out of control, and there is nothing that governments can say or do that can stop it. As in 1929, every time people thought that the worst had come, further falls were just round the corner. Nobody knows how far share prices have still to go. The world economy now finds itself in unsheltered waters.
Markets routed in global sell-off – “It’s every man for himself!” In the words of Alan Greenspan, “The crisis will mean a return to the ideological struggle between socialism and capitalism. Many of us thought that struggle was over with the collapse of the command economies, but this is not the case.” Reality is indeed coming home with a bang!
The working class must not be left to pay for Wall Street mess What caused this financial crisis? Whilst the collapse of house prices was the straw that broke the camel’s back, this requires that it was already heavily laden with straw. Marxists understand that historical events don’t occur in a vacuum; rather, they are a result of the build up of contradictions within the system.
1929 again? – Socialist Appeal Editorial Statement The Banks are going down like ninepins. The whole financial system has been based on an unstable house of cards of credit. The pyramid had been built up over years of mad speculation. Now it is all unravelling.
Paulson plan - a kick in the face for capital Such was the indignation of ordinary Americans that yesterday the much trumpeted $700billion bailout was voted down in Congress, sending shockwaves around the world's financial institutions. Whatever they do now, a new package or no package will mean serious economic downturn and reveal the real nature of capitalism to all.
Britain: Bradford & Bingley nationalised – let's take the rest Bradford & Bingley has finally been put out of its misery. After months of cliff-hanging the government has been forced to nationalise the bank. In many respects the ‘rescue’ plan is a clone of the $700bn Paulson plan being pushed through in the USA. The basic idea is that the good stuff is sold off to the private sector while the taxpayer is lumbered with the bad debts, the toxins. Socialism for the rich and the rigours of free enterprise for the rest of us!
World capitalism in crisis – Part Two Let us compare the perspectives of the Marxists with those of the bourgeois. In contrast to the bourgeois economists who committed the grave error of believing their own propaganda, the Marxist tendency explained the reality of the situation long ago. The Marxists were laughed at then... not anymore. What we have been saying for years is now becoming reality for all to see.
World capitalism in crisis – Part One We live in exceptional times. The financial panic in the USA is creating waves that are threatening to engulf the whole world. This is rapidly transforming the consciousness of millions. Alan Woods, in a two-part article looks at how the world economy reached the stage it has, where it is on the brink of a serious downward, so serious that it could be as worse if not worse than 1929.
