Class Warfare - Some basics on the economy (Ian Welsh)
Written by: Ian Welsh
Source: Some basics on the economy
(it may be easier to access the article on Naked Capitalism
Ian Welsh has written 21 blunt and dire "basics" about the U.S. economy, and to a degree the world economy, and it's lack of a meaningful
1) the majority of new jobs are bad.
2) the economy has still not recovered all lost jobs, either in absolute #s or as a percentage of the population
3) so there are fewer jobs, and what new jobs have been created are worse. They pay worse.
4) The upper middle class job market has recovered, which is why those folks are no longer panicking and are telling you that the economy isn’t so
bad as all that.
With the 2008 collapse, the US lost high-tech and skilled jobs. We lost manufacturing jobs. We lost skilled-trade jobs. When we "recovered", we only
gained in low-paying service-industry jobs. Our trade and tax policies reward outsourcing, and make it financially punitive to 'insource'. Even the
"Bring Jobs Home Act" was defeated by greedy, self-serving politicians financially obligated to industry-tycoons who rely on foreign wage-slave
labor for their profits.
5) the failure to force the rich to take their losses and to break up the banks means that the same people who caused the 2007/8 financial crisis
still control the economy and the government.
The attempt at banking reform (Dodd-Frank Act) was too late and weakened by the House. Any
attempt at banking reform is met with fierce
resistance by Congress. The failure to break up the big banks
is why we are still over a barrel.
6) failure to restructure the economy to get off oil and over to an electrical economy means that the US (and the world) are caught in the oil
price dilemma: any real recovery increases oil price and will be derailed by those high oil prices.
Not just oil - coal, too. We are doomed to remain in a cycle of expensive, limited energy so long as those who control it can use it retain power and
wealth over the country (and world). When the Pentagon launched a $1 billion-dollar initiative to find alternative energy for it's military, it was
oil and Congress. Oil continues to receive massive federal subsidies (while incredibly profitable), yet alternative energy receives little. The fact
that as we (or should I say, IF we) recover as an economy, it will cause a corresponding demand for oil, pushing prices higher, which will continually
negate any meager recovery. It's a catch-22.
7) Europe, ex. Germany, is in recession.
8) the developed world is in depression, it never left depression. During depressions there are recoveries (such as they are) and recessions, but the
overall economy is in depression.
9) China’s economy is slowing down. Since China is the main engine of the world economy, followed by the US, this is really bad. If it goes into
an actual recession, bend over and kiss your butt goodbye.
Reasons? In the past, if one nation's economy slowed, another nation's would pick up (the US and Japan have been in that sort of relationship). Now,
all nation's have slowed, at least developed
nations. Is this the effect of previously undeveloped nations (India, Mexico, etc.) now competing
with us? Or is it the outward-expansion
, a cornerstone of the US economy (like most) has finally reached it's end? For the first 150 years of
America's existence, it didn't matter how poorly it's economy was managed, we were an outward-expanding, manifest destiny, ever-growing nation. We
could absorb the poor fiscal policies of the corrupt governments of the past and still have an economy chugging along. Now? We've expanded as far as
we can, we've become a "mature" nation like those in Europe, who now have to become a much better managed and much more socially conscious
government to still have a viable economy in the face of foreign competition and trade.
10) Austerity is a means by which the rich can buy up assets which are not normally on the market for cheap.
11) the wealth of the rich and major corporations has recovered and in many countries exceeded its prior highs. They are doing
fine. Austerity is not hurting them. They control your politicians. The depression will not end until it is in their interest for it to do so, or
their wealth and power is broken.
Corporations in the US have been achieving record-setting profitable quarters - even the banks who created the financial downfall are have profited
handsomely from/in spite of the recession. How is it they've recovered, but left the working classes in the dirt?
17) Wages are being systematically broken in the developed world. The rich do not believe they need you, except as wage-slave labor. You will
all be company store slaves, paying rental streams to everyone to be allowed to continued to eke out a miserable existence.
Like #10, "Austerity is a means by which the rich can buy up assets which are not normally on the market for cheap," the billionaire business owners
will use the recession to break the back of Labor and wage-earners, to force them to take less, as they have become too weak to fight back.
Read the source article for all 21 of Welsh's "Basics"
(or if you
don't want to see my annoying commentary), right or left he summarizes many of the reason I think most here would agree with as to how and why we got
here, as an economy.