The Financial Crash Pt 2 is on its way. This time it'll be worse
I don't wish to crash the Rugby World Cup 'Bread and Circuses' Party (actually I do), but has anyone given any thought to the coming economic apocalypse? Or has it been put on the backburner until the rugby circus is over?
This is what that august journal of the British establishment, the Financial Times , said recently:
“This recession is not normal. When economies suffer such steep collapses, as they did during the worst of the crisis (the peak to trough fall on gross domestic product having varied between 3.9% in France and 9.9% in Japan), an expansion that fails to return output to the starting point will not feel like a recovery. This is especially true if unemployment remains high, employment low and spare capacity elevated. In the US, unemployment is still double its pre-crisis rates. Another downturn now would surely be a disaster.”
Echoing the Financial Times, the Governor of the Bank of England, Mervyn King, warned last week that the world was showing growing signs of a global economic disaster. He said:
“This is the most serious financial crisis we’ve seen, at least since the 1930s, if not ever. We’re having to deal with very unusual circumstances..'
Recently, Joseph Stiglitz, the Nobel Prize winner for economics, stated that “A long malaise now seems like the optimistic scenario.”
The alarm bells are well and truly ringing among the capitalist elite but the corporate media seem incapable of seeing this crisis as anything other than 'a rough patch' which 'we' will, somehow muddle through. So they cling to any piece of economic good news, however small, as a sign that things aren't so bad and that we can all pack up our troubles in our old kit bag.
I was dumbfounded to hear someone on either TVNZ or TV3 speculating recently whether we were going into a double dip recession.
The fact is that the world has never come out of the 2008 Great Recession. We've basically had four years of economic stagnation. This is looking like a Depression folks but you will not hear the 'D' word mentioned in the corporate media.
Instead over the last four years we've had nonsense about an 'economic recovery being just around the corner' and 'economic green shoots'.
But while these clowns have babbled nonsense, the crisis has deepened. This crisis is not cyclical but structural. In other words we have reached a point where capitalism itself is the problem and no amount of tinkering will fix it.
Not that Governments haven't tried. The banks, the corporations and the finance houses have all been bailed out with taxpayer money in a desperate attempt to revive the dying patient.
The scale of the bailout has been so vast as to be barely comprehensible. The total bailout (so far) has been anywhere between 20- 25 trillion dollars. That's 25,000,000,000,000 or a million million or a thousand billion. If you want to look at an instructive visual demonstration of what a trillion dollars looks like, go here.
This astounding bailout of global capitalism has driven a massive build-up of government debt. Countries like Greece , Portugal , Spain and Italy are all teetering on the edge of the abyss. Greece is broke and its only a matter of time before it defaults.
But as the debts continue to mount the austerity cuts demanded by the IMF become more savage . All around the world ordinary people are being forced into joblessness, poverty and homelessness in order that the finance centres of global capitalism can survive.
And the resistance to the rule of the financial terrorists (because that is what they are) continues to grow and Occupy Wall Street is just the latest manifestation of that resistance.
It should be made clear that capitalism can no longer afford the kind of reforms that characterised the post war period. This era has long gone and will never return. The machinery of gradual reform has been smashed into a million pieces.
This is the era of the capitalist offensive and vicious austerity measures.
The only solution is the radical transformation of the capitalist political economy. It really is either socialism or barbarism.