Economy

We republish here a graph that was originally published in the New York Times, based on figures from “The State of Working America” by the Economic Policy Institute. It covers the period from 1913 to the present, with a focus on the period after 1947. This is significant because 1947 can be considered the starting point of the post-Word War II economic boom, a period during which the capitalists were extracting so much profit from the workers that they were able to throw them a few extra crumbs. The mass workers’ movements in the 1930s and the strengthening of the unions after the war had taught them a few lessons about how to try to maintain relative class peace.

As the effects of the 2007–2009 “Great Recession” continue to unfold, workers worldwide are beginning to see that capitalism fosters a reactionary psychology that puts the profits of a tiny minority of society above the interests of the overwhelming, productive majority. The Occupy movement that has unfolded is scarcely the beginning of a protracted process that will inevitably result in an upsurge in the class struggle and a renewal of interest in genuine socialism, which has nothing in common with the infamous Stalinist regimes of the twentieth century.

The effects of the Great Recession continue to unfold with a vengeance in spite of a “formal” recovery. The unemployment rate is still hovering at over nine percent. Since the beginning of 2007, the number of households relying on food stamps has nearly doubled to 21.4 million.  It therefore comes as no surprise that the number of people living in poverty in the United States has reached a rate of 15.1 percent, which is the highest level seen since 1993. Black and Latino workers have been hit the hardest, given capitalism’s long history of institutionalized racism. Blacks have a poverty rate of 27.4 percent and Latinos have a poverty rate of 26.6 percent.

In an interview which shocked the BBC News anchor, “independent trader” Alessio Rastani gave a very frank appraisal of his perspectives for the world economy. “This economic crisis is like a cancer; if you just wait and wait hoping it is going to go away, just like a cancer it is going to grow and it will be too late,” he said, adding that governments would not be able to fix the economy.

Republican presidential candidate Ron Paul, among others, has advocated a return to the gold standard for U.S. currency. He is worried about inflation and the continued devaluation of the U.S. dollar. Capitalist politicians like Paul claim if only the dollar were fixed to the price of gold, all would be well in the economy. This actually brings up several questions. Such as, what is money in the first place? Is American money, since it is “not backed by gold,” worthless?

The world crisis of capitalism has entered a new stage. Rather than recover, several countries are showing features of a depression. This is an unprecedented situation and shows the deep malaise affecting the capitalist system, still reeling from the slump of 2008-9.

A deal to raise the debt ceiling has now been reached, after weeks of incredible fear-mongering on the part of both bosses’ parties and Wall Street, and will reach the President’s desk by the deadline on August 2nd.  The contents of the final agreement remain rather vague, but the broad outline is enough to make clear what it means for workers in the U.S.  Did it have to be this way? Why didn’t the Democrats put up a fight?

The American Dream has been whittled away over the last few decades. A small health care premium increase here. A smaller wage increase there. A 401k instead of a traditional pension. Fewer days of paid sick leave.

Editorial for Socialist Appeal 61.