09) A DECADE OF RECESSION?

(The following article is from the May 16-30, 2009, issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $25/year, or $12 low income rate; for U.S. readers - $25 US per year; other overseas readers - $25 US or $35 CDN per year. Send to: People's Voice, c/o PV Business Manager, 133 Herkimer St., Unit 502, Hamilton, ON, L8P 2H3.)

People's Voice Editorial

The recent uptick on global stock markets has right-wing pundits and politicians buzzing; apparently the economic spiral has made a U-turn, and happy days are here again for capitalism!

     Not so fast. As CAW economist Jim Stanford told a recent meeting of Toronto-area shop stewards, this rally is a "paper-based rebound" resulting from public bailouts to corporations. After all, Canadian taxpayers, thanks to the Harper Tories, just gave the big banks $200 billion, enough to goose share prices temporarily. But while the TSE is up since early April, unemployment has jumped 30% over the past six months. And a close look at the "rise" in job creation shows that most new jobs are various forms of self-employment, a precarious foundation on which to build a recovery.

     Meanwhile, Nobel laureate in Economy Paul Krugman says the U.S. could face a decade of zero growth if more aggressive incentives are not rolled out. Another Nobel winner, Joseph Stiglitz, also predicts a lengthy economic crisis. Krugman says the United States is following Japanese methods from the 1990s, helping banks survive without reversing the long-term decline trend. He warns that this approach is inadequate to stimulate economic revival, particularly since the main 19 U.S. banks still lack sufficient capital to confront a possible worsening of the recession.

     As the Wall Street Journal pointed out last fall, eight of the ten best single days in history for the Dow Jones took place during the first four years of the Great Depression. A bigger economic stimulus could produce similar results, but in the long run, the global imperialist system faces far more serious structural difficulties. Simply put, in a world where billions of people lack the incomes to purchase goods and services, and where the big imperialist powers waste trillions on militarism rather than clean water, housing, medical care and other necessities, capitalism is in deep trouble. That won't change anytime soon, unless working people succeed in winning fundamental change. As we have said before, the present weakness of capitalism is also an opportunity to win big victories for workers.