While talk about signs of a possible economic recovery drove the stock market up for four weeks in a row, beginning March 10, it is clear that the recovery being talked about was a recovery of the bosses and bankers, not the workers.
Three quarters of a million workers lost their jobs during those four weeks, but the financiers and speculators were driving up the markets based upon reports of increased profitability among the banks and a rise in activity in the bond market.
On April 3, the day the Labor Department announced that 663,000 workers had lost their jobs in the month of March, the Dow Jones Industrial Average of stocks went up 49 points, capping a four-week rise. Then the market started going down again, based on reports of a decline in corporate profitability.
This clearly shows differences in what a recovery means to Wall Street and what it means to workers. Bosses want higher profits to roll in, while workers want their jobs back, their homes back and their futures back. That is why the big business media can talk about signs of recovery while unemployment is growing.
True unemployment is 19.8 percent
In fact, real unemployment is completely underplayed in the big business media in order to hide the extent of the crisis among the workers. According to the headlines, unemployment has risen to an official 8.5 percent. Much less publicity is given to the number 15.6 percent—the other official number—which includes discouraged workers and those forced to work part time although they need a full-time job.
Taking these percentages, the unemployed and underemployed amount to 24 million, not 13.2 million. But even this figure is a gross underestimation of the true unemployment crisis.
A release by Martin Weiss, a financial consultant, reveals that the figures for “discouraged workers” are a complete underestimate. (moneyandmarkets.com, April 6) Weiss quotes a finding by John Williams of ShadowStats.com: “During the Clinton administration, ‘discouraged workers’—those who had given up looking for a job because there were no jobs to be had—were redefined so as to be counted only if they had been ‘discouraged’ for less than a year. This ... defined away the bulk of the discouraged workers.”
In short, a worker who has been discouraged for more than a year disappears from the unemployment statistics altogether. Based on this fact, Williams estimates that actual unemployment is 19.8 percent, or close to 30 million.
The prospect for a capitalist recovery any time soon is highly unlikely, given that manufacturing is plunging downward, not just in the U.S. but worldwide. Even optimistic bourgeois experts expect economic decline and an increase in the number of unemployed by at least half a million a month for the foreseeable future. In fact, there is no economist who can point to a path out of the present crisis.
At best, the hope is that the massive injection of government funds into the banks, plus another stimulus package over and above the $787 billion package already enacted, will be able to slow down the crisis and stabilize the system within the next two years.
But an important point for the working class, the oppressed, and all progressive and revolutionary forces to hold on to is the fact that even a mild, artificially forced capitalist recovery based on government spending would still leave the workers in crisis.
‘Mother of all jobless recoveries’
The working class is trapped in a capitalist system that is in a permanent crisis. For example, a Wall Street Journal article on March 28 talked about tentative signs that the bottom had been reached in the recession. The article discussed various statements by bankers and indicators from government statistics that could mark a turn toward “positive growth”—meaning a capitalist business upturn with rising profits. It went on to say:
“But a turn toward positive growth is not the same as a recovery, particularly with the current 8.1 percent unemployment rate at a quarter-century high and marching higher by the month. Nariman Behravesh, chief economist at HIS Global Insight ... says unemployment could hit 10.5 percent by late next year, even if the economy is growing at a 3 percent rate by that point.
“‘What comes next, I’m afraid, will be the mother of all jobless recoveries,’ said Bernard Baumohl, chief global economist at the Economic Outlook Group in Princeton, N.J. ‘While we may emerge from recession from a statistical standpoint later this year, most Americans will be hard pressed to tell the difference between a recession and recovery the next 12 months.’”
Of course, capitalist experts cannot predict, and have never been able to predict with any degree of certainty, the way their economy will perform over the long run. Marxists, knowing the contradictions of capitalism, knowing that consumption cannot keep up with production for profit under capitalism, understand that overproduction and crisis is inevitable. This is the type of crisis that is ravaging workers all over the world on the largest scale since the Great Depression. So all talk of a recovery is highly premature.
For example, in the U.S. today the crucial automobile industry, which is central to the economy, can sell at a profit only half the number of cars it was built to produce. No sales mean no profits. No profits mean shut down production. That means layoffs, destruction of factories, more poverty, less sales and the crisis deepens.
The same is true of the housing industry. Millions of houses cannot be sold for a profit even as tent cities of the homeless are multiplying around the country. The housing industry, like the auto industry, ripples out into all areas of the economy. The foreclosure crisis, in which millions are losing their homes, means not only a rise in homelessness but a rise in unemployment among all the workers affected by the collapse in housing construction.
Because capitalism has created a widespread, interconnected process of producing everything, a truly global network of production, every layoff in a central industry brings layoffs throughout the global network that those industries depend on. Thus U.S. and world unemployment are both rising. The World Bank estimates that up to 50 million workers could lose their jobs this year.
Workers can only recover by fighting back
None of this is a recipe for capitalist recovery—quite the opposite. The working class cannot wait for the automatic processes of capitalism to revive, save the situation, and wipe out unemployment, poverty and hunger.
Right now workers in Enfield, Britain, and Belfast, Ireland, have occupied Visteon auto parts plants to demand severance pay and other rights. This follows a similar occupation by the Waterford Crystal workers in Ireland, who themselves were following the example of the Republic Windows and Doors workers who seized their plant in Chicago in December.
The self-action of the working class, organizing from below to resist this vast wave of layoffs, shift cuts, shortening of hours, as well as foreclosures and evictions, is the only way forward.
The battle cry of “A Job Is a Right” must be raised everywhere and the bosses must be stopped.
There must be mass mobilization and coordinated struggle by an alliance between the oppressed and impoverished communities and the workers to stop the bosses from shutting down, from picking up and leaving and destroying lives and communities.
Every penny of the trillions of dollars for the banks should be turned over to relieve the economic suffering of the people by creating real government jobs programs with living wages and benefits—not just crumbs handed down after the capitalists divide up the money from the stimulus package among themselves and take their profits.
This is the only way to push the crisis back where it belongs, onto the backs of the rich profiteers and off the backs of the working class and the oppressed.
They created this crisis. They must pay. Bail out the people, not the banks!
Goldstein is author of “Low-Wage Capitalism.” Information about the book can be found at the Web site www.lowwagecapitalism.com. Goldstein’s e-mail address is email@example.com.
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