Mutating crisis of capitalism, pt 2: the human recession

[Hannah Bell]

Pt 1 is here:

http://socialistworker.org/2010/07/12/mutating-crisis-of-capitalism

Pt 2:

THE OTHER thing we need to ask is: If the world economy is in even the early stages of a sustained recovery, where is the engine? Where is the economy being driven forward? You can look historically...certain geographic areas drove the world economy during certain phases... China, of course, has been the chief scenario for economists, because its growth rates are very, very high...But there are huge structural problems. About 30 percent of China's industrial capacity is unused right now. That's another way of saying that capitalism confronts an overaccumulation crisis. China has built so much productive capacity it can't profitably use that the incentive to keep investing...drops dramatically.

Now it is true that China had a huge stimulus program... It was used to build a huge amount of new capacity. Let me give you some examples. Fixed investment in factories and railways accounted for 95 percent of China's growth last year. This is unprecedented--nothing like this ever happened in the history of capitalism, where everything is being driven by the building of new factories and railway lines. And by the way, these are classic signs of an overaccumulation mania. You build housing developments that sit empty, you build rail lines where one train runs every day.

But if you want a really good picture of it... Last year, China built capacity to produce 58 million tons of steel more each year. That means it now has an excess capacity of around 200 million tons...greater than all the steel-producing capacity of all the countries of Europe combined. That can't continue. You can't keep doing that. And the Chinese ruling class knows it...They're trying to reign in credit markets right now, but they're trying to do it without producing a crash...So structurally, China's growth is based on overaccumulation that's not sustainable, and the export-driven pattern means it can't bring the world economy forward...

Finally, the United States... "What the United States is experiencing is a statistical recovery and a human recession." That's precisely what's happened. A few statistical indicators have moved up, but for the vast majority of working class people, the recession continues...one out of every six U.S. workers has taken a wage cut in this recession, and amazingly, four out of every 10 African Americans has experienced unemployment during this crisis... As for the next statistic I'm going to give you, this one was so overwhelming that I did check it to be sure. Half of all U.S. children will now depend on food stamps and some point during their childhood, and the figure runs at 90 percent for African American kids. Imagine that--in the heartland of global capitalism. THIS HUMAN recession shows no signs of abating, and it can't possibly be the basis for any expansion. What we're dealing with, in other words, is, as I said, a protracted global slump that is changing forms--the front of the crisis shifts--but in which all of the classic neoliberal tactics of attacking the working class are being intensified...We've got a kind of hybrid neoliberalism, with elements of Keynesian stimulus when they think things are really falling apart, and with massive attacks on the working class and all of the class and racial dynamics of neoliberalism coming to the fore once again at other times...


http://socialistworker.org/2010/07/13/the-human-recession

[Hannah Bell]

1. k

[ThomThom]

2. kick

[Pooka Fey]

3. K&R

Half of all U.S. children will now depend on food stamps and some point during their childhood, and the figure runs at 90 percent for African American kids.

:scared:

[mdmc]

4. r

[Donnachaidh]

5. k&r n/t

[blindpig]

6. Wall St is the measure of all things......

If they say it is a recovery then it must be. If the masses aren't participating then it must be their fault and they should be punished accordingly. And so they are....

[Hydra]

7. This is my constant question

"Where is the engine?"

I suspected the next bubble was going to be health care, but I bet the way it plays out, everyone will have to buy insurance, but won't be able to pay the deductibles and co-pays.

Every time the talking heads see "green shoots" or good indicators, I swear it almost looks like magical thinking. Where is the engine? How are you planning on starting the car, let alone what are you going to use as gas?

[Hannah Bell]

8. the federal reserve agrees with you. they just put out a report predicting 6 years to return

to pre-crisis baseline.

that's nearly a decade of "recession".

sounds like a depression to me.

[Hydra]

9. Good quote on that

"A recession is when someone else loses their job. A depression is when you lose yours."

Thanks for the info- the 6 year timeline is disturbing, but with their talking about "a jobless recovery," it's hardly surprising.

[Hannah Bell]

10. 6 years from now. i think we're around two years+ since the bubble popped?

so that would be 8 years.

[Hydra]

11. You're right, I think I just worded it badly

6 years from now timeline for recovery.

...A lot of people are going to die from this, IMO.

[Hannah Bell]

12. i think so too. here and elsewhere.