[Peace-discuss] Recovery or change?

[David Green]

Wolff's points are of course well-taken, but his emphasis on what he sees as a 
long-term decline in productivity growth is perplexing. The point is that 
productivity continues to increase, albeit at slightly diminished rates; 
however, the worker does not see the fruits of his or her labor. In the U.S., 
productivity has apparently been relatively enhanced as the workforce has been 
squeezed; people work harder becasue they're afraid to lose their jobs. Owners 
get higher productivity and more profits from a subservient surplus labor force. 
Unemployment is good for them, up to a point, probably the point we're at now, 
as we can see from the "healthy" stock market. What we need is full employment 
and both the downward redistribution of wealth and lowered productivity that 
that would bring.

DG




________________________________
From: C. G. Estabrook <galliher at illinois.edu>
To: Peace-discuss <peace-discuss at anti-war.net>
Sent: Sat, January 1, 2011 5:51:54 PM
Subject: [Peace-discuss] Recovery or change?

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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