Demand is down. Prices are down. Wages are down. The markets are down. And money, that half-fictitious substance, is largely to be found in the parasitical financial markets in the form of debt. These are ominous signs.
In a fact-filled article published on the World Socialist Website (WSWS), journalist Barry Grey lays out in plain terms the indicators that the global economy is fast approaching a cliff as precipitous as the one that led to the crash of 2007-2008. A crash that, despite the optimistic rhetoric of U.S. President Barack Obama’s State of the Union Address, we have never recovered from. Consider the following:
China is expected to announce next week that 2015 saw the country’s weakest economic growth in 25 years. Fear of this news led to a selloff on Chinese markets and a drop of the Shanghai Composite Index of 3.55 percent. “Investors are scared to death,” said the chief strategist at Federated Investors.
Walmart announced Friday that it will close 269 stores, including 154 in the U.S., eliminating 16,000 jobs. So far in 2016 the Dow Jones Industrial Average has fallen 8.24 percent, the Standard and Poor’s Index is also down more than 8 percent, and the Nasdaq has lost more than 10 percent.
A number of major economic indicators are registering worse numbers than at any time since the crash. “The price of oil,” says Grey, “a barometer of global economic activity, is down 20 percent so far this year.” This marks “the steepest two-week decline for oil since the 2008 financial crisis.”
Further, the New York Fed announced, “Business activity declined for New York manufacturing firms more sharply than at any time since the 2007-2009 recession.” And the U.S. Commerce Department reported Friday that retail sales in the country rose just 2.1 percent in 2015, the worst showing since 2009.
As Grey points out, this global economic contraction will undoubtedly intensify international tensions. With the U.S. economy foundering, Russia in deep recession and China’s economy skidding to a halt, the tinder of American recklessness in Eastern European affairs and in the South China Sea threatens all the more to spark into a global conflagration. We citizens must recall the cold fact that war is an economic tool to those with the power to wage war. It is a banker’s and corporatist’s game, and to such elites the lives of ordinary working people mean nothing.
We must recall also the tragic farce that unfolded the last time the economy crashed, how we sat and watched as former Goldman Sachs CEO and Secretary of the Treasury Henry Paulson backed his truck up to the Treasury and made off with all our money. The bailout of “too-big-to-fail” banks at the expense of the American people, the millions of home foreclosures, the downward spiral of an economy that now sees a real unemployment rate around 20 percent, not including the millions of Americans who are underemployed and living in poverty—all this has been the price we have paid for the last economic crisis.
And in this weakened condition we are about to undergo another crisis. Nothing has been done to prevent it. No important banking laws were made, no safety nets put in place to protect Americans from the folly of the financial sector. We are again being driven toward a cliff. It is time we took over this car.
Photo credit: oregonlive.com