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NEWS & LETTERS, April - May 2008EditorialCrisis is in productionThe Labor Department's April 4 report announced that the U.S. economy lost 80,000 jobs in March, confirming what working people and most economists already knew: the U.S. is in a full blown recession. Furthermore, the January and February figures had to be revised to indicate that for the first quarter the U.S. economy declined by 232,000 jobs. Unemployment climbed from 4.8 to 5.1%. The number of U.S. citizens applying for food stamps rose to a record 28 million. Today's gloomy economic statistics are only the latest omens in a protracted crisis triggered by the burst real estate bubble that left millions of workers losing their homes to foreclosure. The mid-March collapse of the giant investment bank Bear Stearns triggered a panic assessment that the global economy is now on the verge of a 1930s total collapse, which, according to Wall Street economist Ed Yardeni, calls for all-out measures to avoid a "Great Depression II." Federal Reserve Bank chairman Ben Bernanke, with the blessing of the administration's Treasury Secretary Paulson, took unprecedented and, some say, extra-legal measures as he engineered a deal to save Bear Stearns using $30 billion of public money. Then the Fed, which is chartered to lend to regulated banks, lent directly to securities firms whose books are loaded with unwanted mortgage-backed securities. Capitalist free market ideologues almost universally turned on a dime and lined up behind massive government intervention. For them the heavy hand of the state is always there to serve their interests when and where they need it. SPECTERS OF CRISIS, REVOLUTIONA former chief economist of the U.S. Trade Commission, Peter Morici, had an apt reaction: "this is the kind of stuff that caused the French Revolution." He contrasted how expeditiously the Fed moved to rescue the firms of super wealthy bankers, who, even as they fail, earn golden parachutes, with real suffering experienced by millions losing their homes, their healthcare and their jobs. The Fed may rescue the U.S. system of finance capital from collapse but the real crisis, whether one speaks of the 1930s or today, is in production. Finance capitalism, "uncoupled" from production, feeds the illusion that profit can come from speculative bubbles. At the moment of reckoning, the truth asserts itself: that profit only comes from extracting ever more surplus value or unpaid hours of labor from workers. The real vital function of the system of finance is divvying up the loot from all the sweated, alienated labor extracted in labor-intensive manufacturing locales like India, China and Vietnam, as well as what remains in the U.S. One of the most unconscionable developments has been capital's raid on the world's food supply for energy, turning food into bio-fuel, and pushing untold numbers of the world's poor, who rely on cheap vegetable oils, to near starvation. Since world food prices rose over 40% in the last year, food riots have erupted throughout the world among the nearly three billion people who live on less than two dollars a day. Even in the U.S., where a third of the corn crop now goes for ethanol, hunger stalks the poor as food pantries report a huge rise in requests just when supplies are drying up. GROWING LABOR REVOLTLabor in the U.S. is not quiescent. On April 1 independent truckers organized a "Fuel Price Protest" of slow-moving convoys and shutdowns on highways in various parts of the country. Their sentiment was to make this action not just about their own plight but all workers struggling under the impact of high energy costs. Truckers plan to renew their protests on May 1, International Workers' Day, including plans to shut down the Los Angeles-Long Beach Harbor. Longshoremen, a sector of workers with an even more strategic role in the global economy, also voted to stop work on the west coast docks for eight hours on May 1 to call for an end to the war. Immigrant workers plan to hold their own May Day marches and rallies. Second-tier workers in the service sector are showing a new willingness to strike for their rights and organize. Nurses are among the most militant strikers over workplace issues and are in the forefront of the struggle for single payer universal healthcare. This crisis, that has economists scurrying back to the 1930s for a precedent, comes after three decades of restructuring to reverse a falling rate of profit. Capital has been gutting the social safety net and gains that workers won after WWII and instituting new ways to extract value through labor-intensive manufacturing under barbaric conditions worldwide. In many countries peasants have become destitute migratory workers after being "set free" from their livelihood through competition from U.S.-subsidized agribusiness. Political remedies fashioned to ameliorate the plight of workers try to save the capital relations that brought humanity to this precipice in the first place. If history is any guide, capitalists will turn to more militarism and total war. Needed more than ever is a philosophically grounded alternative to capitalism that includes the reach for a new reality through new human relations in contrast to the reality of what Marx called social relations between things and material relations between persons. |
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