[Peace-discuss] Recovery or change?
C. G. Estabrook
galliher at illinois.edu
Sat Jan 1 19:51:54 CST 2011
From <http://www.commondreams.org/view/2011/01/01-2>, with links & chart:
...the nearly 20% of the US labor force that became unemployed or underemployed
in 2009 remains so as we enter 2011. No recovery there. Worse still, a quarter
of those who found work since the crisis began only got temp jobs without benefits.
Second, foreclosure actions by banks – including those who got most of the
government's bailouts – continue to eject millions from their homes. No recovery
there, either (except for the bigger banks).
Third, consider why the Federal Reserve decided last month to create another
$600bn of new money, and why Congress and the president agreed in December on an
additional fiscal stimulus (extending Bush's tax cuts, reducing social security
withholding for 2011, etc). They took those steps because all the previous
bailouts, monetary easing, tax cuts and government fiscal stimulus expenditures
had failed to end this crisis. Those immune to hype recognize that more of the
same policies that failed before might do so again.
More importantly, the recovery noise distracts from a more basic failure of our
economic system: its fundamental instability. Recurring "downturns" – which
neither private nor government actions have ever managed to prevent – impose
massive costs on society. They plunge millions of effective, productive workers
into unemployment and resulting personal, family and community disasters.
Governments tap the collective purses of their nations chiefly to rescue just
those private capitalists who were major contributors to the crisis and whose
wealth insulates them from the crisis' worst effects.
Then, governments turn on their people to impose austerities (cutbacks in social
programs, social security, etc) needed to restore government budgets busted by
that rescue's huge costs. Like someone convicted of murdering his parents who
demands leniency as an orphan, corporate America demands conservative government
and austerity on the grounds of excessive budget deficits. Mainstream media and
politicians take those corporate demands seriously, reminding us who controls whom.
The last half-century suggests a very different analysis of the crisis and a
correspondingly different response for 2011. Since the early 1970s, workers'
wage increases came to an end, their benefits and job security shrank and
government supports for average people came under conservative attack.
These increasing burdens were justified as absolutely necessary to enable more
investment and, therefore, greater economic growth. A bigger economic pie would
then provide more for everyone including workers.
In fact, growth in the US and Europe steadily slowed over those years (see graph
... by University of Rome Professor Pasquale Tridico):
While workers' conditions deteriorated, capitalist surpluses and profits soared
and stock markets boomed. Income and wealth were redistributed from poor and
middle to the rich. But the promised results never materialized: neither more
investment, nor greater economic growth. As the graph shows, growth actually
slowed and then the whole system imploded into a catastrophic crisis.
Today's recovery noises accompany government actions that will repeat in 2011
more of the bailouts, monetary easing and fiscal stimuli that have proved
insufficient since 2007. None of those actions dare to question, let alone
address, how capitalism redistributed income and wealth in the decades leading
to the crisis or how that redistribution contributed to the crisis.
The recovery being planned and hyped aims at a return to the US economy before
it crashed. However, that capitalism was like a train hurtling toward the stone
wall of crisis. To return to a pre-crisis capitalism risks resuming our places
on a similar train heading for a similar crash.
Republican and Democratic politicians alike dare not link this crisis to an
economic system that has never stopped producing those "downturns" that
regularly cost so many millions of jobs, wasted resources, lost outputs and
injured lives. For them, the economic system is beyond questioning. They bow
before the unspoken taboo: never criticize the system upon which your careers
depend.
Thus, this crisis and its burdens will continue until capitalists see
sufficiently attractive opportunities for profit to resume investing and hiring
people in the US as well as elsewhere. The freedoms of US capitalists to gain
immense government supports as needed, and yet to invest only when, where and
how they can maximize their private profits are paramount: the first obligations
of government. The freedoms from want and insecurity for the US people remain a
distant second priority – until mass political action changes that.
In good times, as in bad, capitalism is a system that places a small minority of
people with one set of goals (profits, disproportionally high incomes, dominant
political power, etc) in the positions to receive and distribute enormous
wealth. Those people include the boards of directors that gather the net
revenues of business into their hands and decide, together with the major
shareholders in those businesses, how to distribute that wealth. Not
surprisingly, they use it to achieve their goals and to make sure government
secures their positions.
No Keynesian monetary or fiscal policies address, let alone change, how that
system works and who uses its wealth to what ends. No reforms or regulations
passed or even proposed under Obama would do that either. To avoid the
instability of capitalism and its huge social costs requires changing the
system. That remains the basic issue for a new year and a new generation. Will
they break today's version of a dangerous old taboo: never question the existing
system?
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