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Economy
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The bankers are celebrating their orgies. Wall Street banks are set to
shell out $65bn in bonuses to the speculators who fouled up so
spectacularly and brought the credit crunch down on our heads. Some of
this largesse will drop into the laps of dealers in the City of London
and Canary Wharf. Goldman Sachs alone will lash out $20bn and JP
Morgan, Morgan Stanley, Citigroup and Bank of America will stump up
another $65bn
The deepest and longest economic recession in the advanced capitalist economies since the 1930s is more or less over. But it won’t be long before capitalism plunges into another. That won’t happen in 2010, but there will be another economic slump before the new decade is out.
The world of international finance has been shaken by the
default in Dubai.
Shares have taken a tumble all over the world. Commentators have suggested that
this could be the cause of the recession moving into a double dip, of a further
downturn in the world economy. Mick Brooks looks at the unfolding crisis in the, until last week, 'money no object' world of Dubai.
There has
been no levelling off of the global economy, as economists predicted. Although
industrialisation has expanded to lesser-developed countries, it has generally
been along lines determined by global corporations based in advanced capitalist
countries. From colonialism, we have moved into the age of multinational
corporate domination. Will Roche looks at the rise of monopoly capitalism.
Stock
exchanges and commodity prices are on their way up. The world economy is
showing faltering signs of recovery. There’s no doubt that it’ll be a long
haul. Millions of people all over the world have had their lives devastated by
the economic tsunami. It will take years to clean up all the mess. But one
major national economy after another has announced that the recession is
officially over – France, Germany, Japan
and even the USA.
All except Britain.
Why is British capitalism still stubbornly stuck in the mire?
Why is New Labour hurling yet more of our
money at the banks? The London ‘Metro’
screams that the latest deal is the “World’s biggest bank bailout.” It’s
costing every household in Britain £2,000, on top of all the money wasted last
time round
On
Thursday October 24th 1929 the great New
York stock exchange panic began. 12,894,650 shares
changed hands, many at fire sale prices. The following Black Tuesday October 29th
Wall Street began its long meltdown. The Wall Street crash divides two eras:
the jaunty ‘jazz age’ of the 1920s and the 1930s – the decade of depression
Lord Adair Turner is head of the UK’s Financial
Services Authority, the body in charge of regulating the banks and other
financial institutions. Some weeks ago, he was interviewed
by Prospect magazine, a small mouthpiece of the Blairite wing of New Labour. In that interview, Lord Turner blurted out a
telling truth about finance capital that its proponents did not want to
hear. The reaction from
financiers has been apoplectic.
Over the last few decades - first under the Tories then under New
Labour - we have seen the official unemployment figures massaged and
fiddled time and time again in order to make them seem more
'acceptable' in the official reports and, of course, the newspapers. Is
this unique to the UK? Well no, let's have a look at the
real rate of unemployment in the US.
Some economic commentators and financial journalists have divined the ‘green shoots’ of economic recovery’ growing out of the present crisis. Perhaps the wish is father to the thought. Are they right? Most obviously stock exchanges in Britain and all over the world have been booming since the beginning of March. We have to be careful here. Remember there were four 20% or more rallies on the NYSE between 1929-32, when the overall trend for share prices was definitely down. These are often described as suckers’ rallies that take place in a ‘bear market’.
General Motors, the largest car manufacturer in the United States of America, which employs nearly a quarter of a million people world wide, has filed for bankruptcy. This has initiated the largest industrial insolvency the world has ever seen with debts of £105 billion! The firm, which owns Vauxhall and its European sister Opel, employs 5,500 workers here in the UK. The future of the British employees have entered into uncertainty with sale of the European arm of General Motors to a consortium led by Canadian car parts manufacturer Magna, backed by Russian investment bank Sberbank.
Nearly fifty years ago, Ted Grant wrote a major article called 'Will there be a slump?' in which he outlined the nature and underlying reasons for capitalist crisis and why it would keep happening - a controversial statement given that it was made during the period of the post-war boom. This article from 1960 remains as relevant today as ever - if not more so given the world recession which has thrown the global economies into chaos. Here we see a real explanation for the failures of capitalism and why they want the working class to pay for their mess.
Alongside
the waste of resources from capitalist slumps comes inequality and
injustice. Michael Roberts goes beyond the facts and figures to see how capitalism in the 21st Century has ensured that the rich have got richer and the poor... well you can quess Our economics correspondent takes a closer look at some of the facts
Milions of workers came out on strike in defence of their pensions. This was the biggest such action for decades. The fight goes on!
