Despite the lyrics in the old song, "Ain't We Got Fun", which tells us
that, "The Rich Get Rich and the Poor get Poorer...", the day may be
at hand when even the rich get poorer. But waiting for that to happen
will bring plenty of misery and suffering to the Working Class. So we
had better begin figuring out how to replace this failing corporate
capitalist system with a more universal government. One that places
People over Profit.
Carl Jarvis
On 9/21/16, Roger Loran Bailey <dmarc-noreply@xxxxxxxxxxxxx> wrote:
http://themilitant.com/2016/8036/803604.html
The Militant (logo)
Vol. 80/No. 36 September 26, 2016
(front page)
As capitalist trade slows, bosses step up attacks on working class
Graph shows falling dollar value of world exports under impact of
stagnation in trade volume over last few years, combined with plummeting
prices of many commodities.
BY BRIAN WILLIAMS
World trade is slowing, reflected in the recent bankruptcy of the South
Korean Hanjin Shipping Co. Workers on dozens of ships loaded with $14
billion in goods have been stranded on the high seas.
The slow-burning depression conditions and growing boss attacks facing
workers today — with no end in sight — are rooted in a historic
worldwide economic crisis of falling capitalist production and trade.
The capitalist rulers have sought to revive profitable production by
turning to their central banks and implementing a combination of
“quantitative easing” money-printing binges along with slashing interest
rates. Interest rates in the U.S. have been kept at nearly zero percent
since 2008. Tokyo and the rulers of a number of countries in Europe have
imposed negative rates on more than $13 trillion of government and
corporate bonds. These schemes have utterly failed to increase
investment or production.
“The sense that central banks have control over the economy leads to a
feeling of comfort in that at least ‘somebody’ is in control,” wrote
Matthew Kerkhoff in an Aug. 29 Dow Theory Letters column titled “The
Illusion of Power.” He added, “It can be difficult to swallow the idea
that gyrations in our economy are uncontrollable, even though that’s
really how it is.”
Because their profit rates have tended to fall for decades, the
capitalists have held back on investing in capacity-expanding plants and
production. Instead they’ve turned to speculation on stocks, bonds,
derivatives and other forms of commercial paper, or hoarding their cash.
And they’ve attacked the working class, cutting jobs, safety conditions
and rights of working people in an effort to boost profitability at our
expense.
“Net investment has been running at the lowest rates since the Great
Depression,” notes MarketWatch, “suggesting that U.S. investment itself
is in a depression.” Since the steep economic downturn of 2008-2009,
employment in U.S. manufacturing is down nearly 1.5 million workers and
the median family annual income has dropped more than $3,000.
Inventories have swelled. “It isn’t because companies ramped up
production,” economist Leslie Norton told Barron’s in an Aug. 22
interview. “They bought the lie that consumer spending would turn up any
moment, and produced at the same pace. Now they find themselves with a
monster inventory overhang.”
Slumping trade worldwide
Combined with declining production, trade has tumbled. One of the best
indications of this is the Baltic Dry Index, which measures how much it
costs to ship raw materials, from grains to coal to metals. The index
has plummeted from 11,000 points in May 2008 to below 300 earlier this
year, the worst it’s ever been. It’s just below 800 today, still
historically low.
One important factor is that shipping bosses in China and elsewhere had
ordered a slew of new vessels, betting on an upturn in trade, but the
opposite has been the case. “Shipyards have been shrinking” and
“shipowners have gone from ordering ships in droves to scrapping them,”
reported the Journal.
The recent bankruptcy of Hanjin Shipping, the seventh largest container
carrier worldwide, has stranded dozens of ships carrying more than half
a million cargo containers valued at $14 billion at sea. They were
denied access to ports over disputes with terminal bosses over who would
pay docking fees, container storage and unloading bills.
Workers stuck on these vessels face dire conditions with diminishing
supplies of food, water and fuel. Because of cuts in air-conditioning,
“the heat is driving the crew crazy,” the captain of a Hanjin-operated
ship in the South China Sea told the Wall Street Journal.
At major U.S. ports, from New York to Georgia to California, trucking
companies recently purchased tens of thousands of big rigs, but many sit
idle today.
As commodity prices have fallen, U.S. farm incomes this year will hit
their lowest level since 2009. Farmers are expected to harvest the
largest U.S. corn and soybean crops in history, but increased production
worldwide means heightened competition and U.S. farmers’ income will
decline for the third straight year.
Facing prices below their costs of production, many farmers are cutting
expenditures on basic equipment. Deere & Co., which produces tractors
and combines, has announced a series of layoffs this year, cutting over
2,000 jobs.
World trade gloom
The worldwide character of the crisis was highlighted at the recent
meeting of the G-20 capitalist regimes held in China Sept. 4-5. The
gathering was marked by the growing economic place of Beijing in world
production and trade, as well as the growing trade rivalries propelled
by the worldwide capitalist crisis.
The meeting also reflected Moscow’s heightened role in world politics,
from Eastern Europe to the Middle East. It was a sharp contrast to the
2014 G-20 meeting, where Russian President Vladimir Putin was treated as
a pariah by U.S. and European capitalist rulers, leaving the meeting
before it ended saying he needed to get some sleep.
The G-20 is composed of the imperialist governments of Australia,
Canada, France, Germany, Italy, Japan, the U.K. and the U.S. Others
include Argentina, Brazil, China, India, Indonesia, Mexico, Russia,
Saudi Arabia, South Korea, South Africa and Turkey. The European Union
is also a member.
“The global outlook for growth remains subdued,” said a report issued by
the International Monetary Fund following the meeting. “Despite
record-low interest rates, investment continues to disappoint,
reflecting demand conditions as well as high corporate sector debt and
weak financial sector balance sheets in many countries. Weak investment
further dampens underlying potential growth.”
Related articles:
Capitalism, not Saudi conspiracy, behind oil price drop
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