Jerry Falwell dead?
Gosh, there's so much of his vile venom still splashing about that I
had to stop and ponder as to whether old preacher Jerry had really
gone to his ill gotten rewards. As a youngster, I thought to myself,
"It's a good thing people grow old and die. That way, those old
stuffed shirts will be gone. It took me a long time to figure out
that the old stuffed shirts might die, but their old stuffed policies
never went away.
Carl Jarvis
On 8/29/15, Roger Loran Bailey <dmarc-noreply@xxxxxxxxxxxxx> wrote:
http://themilitant.com/2015/7931/793102.html
The Militant (logo)
Vol. 79/No. 31 September 7, 2015
(lead article)
Stock plunge rooted in world crisis of capitalism
BY BRIAN WILLIAMS
Amid a paroxysm of fear and panic, fueling dumping of stocks across
financial markets worldwide, some $5 trillion was lost, including $2
trillion since Aug. 17 in the U.S. From Shanghai to New York, London to
Sydney, losses, then “stabilizations,” then continuing volatility have
agitated bourgeois government policy makers and apologists for the
capitalist system.
The mid-August plunge in stock markets is the result of the decades-long
and growing crisis of capitalist accumulation, production and trade.
Accelerated by the housing and credit collapse in 2007-2008, this crisis
is producing depression conditions for working people, with no end in
sight. As industrial profit margins have shrunk, beginning in the 1970s,
the propertied rulers have increasingly turned from investing in plants
and production, moving instead to speculation in stocks, bonds,
derivatives and all kinds of financial paper.
World trade in the first half of 2015 has tumbled to the lowest level
since 2009. Steel, oil, iron ore, copper, aluminum and nickel are
contracting. The Bloomberg Commodity Index, which follows a basket of 22
raw materials, is at its lowest point in 16 years.
Some bourgeois commentators say this is all about China. “What we’re
seeing is not a U.S. problem,” William Dudley, head of the Federal
Reserve’s New York branch, said Aug. 26, while admitting that the market
turmoil means the Fed will now likely drop plans to raise interest rates
at its September meeting. “This is very different to the financial
crisis. The financial crisis was very much about us. This isn’t about us.”
But others admit it is about U.S. capitalism. “The trigger was most
likely the sudden deterioration of leading economic measures, energy
prices, and industrial commodities, both in the U.S. and globally,”
investment analyst John Hussman wrote in his weekly column Aug. 24.
When overvalued stocks hit “internal deterioration,” with industries and
other sectors breaking down, he said, they “become vulnerable to
air-pockets, free-falls, and crashes.”
On Aug. 23, former Treasury Secretary Lawrence Summers urged the Fed not
to “make a dangerous mistake” and instead keep interest rates at zero.
He said the current production crisis and its effect on jobs will last
at least another decade.
Working people feel the brunt of the capitalist crisis, as bosses push
to lower wages, cut the workforce to the bone and speed up production.
The government released figures at the end of July showing that wages
are stagnant, posting the lowest quarterly growth in more than three
decades.
Capitalist bosses in the U.S., Europe, Japan and Australia had looked to
China as a possible way out of the crisis of their system. But Chinese
capital is integrally part of the world capitalist system and subject to
the same pressures and vulnerabilities. The “Chinese miracle” of
expanding production and trade is imploding, with no buyers, leading to
extensive overproduction of basic commodities both there and around the
world.
China’s Shanghai Composite dropped 8.5 percent Aug. 24, its biggest
daily decline in eight and a half years. This happened despite efforts
by China’s capitalist rulers to boost market prices — cutting interest
rates, betting greater amount of bank funds on stocks and devaluating
the country’s currency, the renminbi. None of them had much impact.
In China, where production is mostly geared for export, exports dropped
8 percent in July from a year earlier, and auto sales dropped 7 percent.
Manufacturing in August shrank at the fastest pace since 2009.
The Chinese government announced Aug. 23 that workers’ pension funds for
the first time will now be invested in stocks.
‘Stimulus’ to boost stock prices
The propertied rulers have no answers to the worldwide economic crisis.
They target workers wages, benefits and safety on the job, hoping to
raise profit margins.
Coming out of the 2007-2008 steep economic downturn, “stimulus” measures
were implemented in hopes of getting production going again. In December
2008 the Fed slashed interest rates to nearly zero and began a
“quantitative easing” money-printing scheme in which the government
bought $3 trillion in government bonds and largely worthless
mortgage-backed securities to pump money into the financial system over
the next six years. But these measures had little effect, except
providing easy money that helped fuel the giant rise in stock market
prices to record overvalued levels.
But the continued rise in the stock market prices was simply based on
investors’ belief that their market value would keep going up and up.
“This is a confidence game, Chris Weston, chief markets strategist at IG
in Melbourne, Australia, told the Washington Post, “and when you don’t
have confidence, you press the sell button.”
Whether the stock market will continue to tumble this week, or take a
breather, the capitalists have no answer to the crisis of their system.
The crisis will deepen.
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