The American working class has been brain washed to the point that it
goes against its own best interests. Donald Trump is the most recent
example of this. Of course voting in Clinton would have done little
to help the floundering economy. Americans have been turned against
the one strength they have over the Ruling Class. Collectivism.
Solidarity. Organized labor unions run by the union members.
"Go it alone" will never help recovery. The rich never go it alone.
Carl Jarvis
On 11/17/16, Roger Loran Bailey <dmarc-noreply@xxxxxxxxxxxxx> wrote:
http://themilitant.com/2016/8044/804403.html
The Militant (logo)
Vol. 80/No. 44 November 21, 2016
(front page)
Trade falters, farmers fail as US economy ‘recovers’
BY BRIAN WILLIAMS
The U.S. capitalist economy is in the eighth year of what the government
and capitalist media describe as an economic recovery. But in cities,
smaller towns and farming areas, this recovery is marked by stagnation
and contracting industrial production, meaning slow-burning depression
conditions for tens of millions of working people. We face rising rents,
stagnant wages, inflation in food costs and other basic necessities, a
fall in median household and farm income, and historic lows in the
percentage of workers actually holding a job.
“U.S. Economy Roars Back, Grew 2.9% in Third Quarter,” headlined the
Wall Street Journal Oct. 29. But a closer look shows that over the past
decade average growth of the real gross domestic product “has plunged to
just 1.3 percent,” the lowest since the 1930s Depression, wrote
investment advisor John P. Hussman in his Sept. 26 newsletter.
The third-quarter figures are based on a rise of exports, especially
soybeans and other grains, and a buildup of the bosses’ inventories. At
the same time companies’ investment in plant and equipment continues to
decline.
Since the 1970s a downward curve of world capitalism’s accumulation and
profit rates has discouraged the bosses from investing in expanding
industrial capacity and hiring. Instead, they’ve turned to hoarding cash
or speculating on stocks, bonds, derivatives or other forms of
commercial paper.
This is what led to the massive buildup in toxic subprime housing loans,
packaged together and sold for speculative investment, that imploded in
2008.
Today there is a spiraling auto sales credit bubble with outstanding car
loans now topping $1.1 trillion. Subprime auto loans, which account for
about one-third of all new car purchases, have grown to $38 billion, up
from $2 billion eight years ago. These loans have high interest rates,
ranging from 10 percent to as much as 25 percent over six to eight years.
Increasing numbers of workers — 1.6 million in 2015 — are having their
cars seized by banks and other loan agencies. It’s glory days for the
repo man.
Grain farmers face economic ruin
The bosses’ financial press says trade is on the upswing. “Ships laden
with millions of tonnes of US-grown wheat, corn and soybeans have been
leaving ports,” reported the Financial Times Nov. 3.
But grain farmers face economic ruin. Reuters ran an Oct. 31 article
titled, “Fields of Debt: Falling Prices, Borrowing Binge Haunt Midwest
‘Go-Go Farmers.’”
For the third year in a row farm incomes are declining. With a glut of
overproduction and falling commodity prices, grain farmers in Iowa,
Indiana and Illinois face rising debts to meet costs of producing wheat,
corn and soybeans. Corn, which topped $8 a bushel in the summer of 2012,
is now at $3.50. Soybeans prices collapsed from nearly $18 to less than
$10. Soft red winter wheat dropped from $9 a bushel to $4.
Production of these crops is expected to reach record levels this fall,
as the giant food corporate monopolies — Archer Daniels Midland, Bunge,
Cargill and Dreyfus, which control more than 75 percent of global grain
trade — seek to expand exports. Feeling the worst effects are working
farmers, many of whom borrowed heavily to expand their farms in a
desperate effort to plant their way out of a commodity price crash.
“Delinquency rates on farmland and production loans are rising sharply,”
reported Reuters. Bankruptcy filings for smaller farmers were up 51
percent compared to 2013.
The fact is, world trade is slowing. The volume of global trade was flat
in the first quarter of 2016, then fell by 0.8 percent in the second
quarter. The New York Times said this is “the first time since World War
II that trade with other nations has declined during a period of
economic growth.”
Millions of workers have had to accept part-time, temporary, on-call or
contract work at lower wages and fewer or no benefits. This has
accounted for “virtually all America’s job growth since 2005,” the
Christian Science Monitor said. The paper cites a study by Harvard and
Princeton economists saying that only 6 percent of the 9.1 million net
jobs created over the past decade were regular full-time positions.
Some 94 million workers in the EU face the same situation, the McKinsey
Global Institute reports.
The official unemployment rate for October was 4.9 percent and 161,000
jobs were created, the Labor Department said. But manufacturing jobs
dropped by 9,000 while low-paying health care jobs rose by 30,500. At
the same time, 425,000 “discouraged” workers were wiped out from the
workforce.
The so-called labor force participation rate — the percentage of workers
who are working or jobless but “actively” looking for work — remains
below 63 percent, a 40-year low. More than 94 million people over the
age of 16 are not part of the workforce.
In September, 11.4 percent of men between the ages of 25 and 54 were not
part of the workforce, a percentage that has risen from less than 4
percent in the 1950s.
Behind all these numbers is the reality facing the majority of working
people — economic stagnation, paychecks that run out before you get the
next one and nothing different in sight except a new and explosive
downturn to come.
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