Re : Capitalism can't solve the unemployment crisis

[gr...@internet.charitydays.co.uk]

>
>
>Capitalism can't solve the unemployment crisis
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Capitalism was never designed to solve an unemployment crisis.

The name of the game is profit.
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>By Milt Neidenberg
>
>Once again the grandmaster of spin, Federal Reserve Chair Alan
>Greenspan, has woven a tale of robust recovery and good times for all.
>Testifying before two Congressional committees in mid-February, he
>assured them--and the broader spectrum of financiers and corporate
>CEOs--that the Fed was bullish on the economy, but warned in economic
>double talk of growing budget deficits. It was a blissful presentation,
>a combination of strong growth, falling unemployment and low inflation.
>
>His remarks soothed the nerves of volatile stock markets. The Dow Jones
>Industrial Average jumped more than 123 points on the first day of
>Greenspan's report to Congress, to close at its highest level in more
>than two and a half years.
>
>For the Bush administration, whose ratings have sharply dropped, it was
>a joyous moment. The loss of nearly 3 million jobs on George Bush's
>watch, along with a whopping budget deficit, wars in Iraq and
>Afghanistan that are going badly, and a giveaway tax policy for the rich
>have all contributed to his shrinking support.
>
>Greenspan's comments gave the Bush administration an additional boost
>when it was reported that the Fed "would continue to fuel the economy
>with cheap money up through the elections in November." (New York Times,
>Feb. 12)
>
>It confirmed the fact that the Fed--the bankers' bank, a mouthpiece for
>the giant banks and big business--is more than a manipulator of monetary
>policies. It is political to the core and about as independent as any of
>the politicians who serve the interests of monopoly capitalism.
>
>In this case, the Fed is in lockstep with the Bush administration.
>Greenspan refused to attack the Bush plan to make permanent the tax cut
>for the rich and agreed with him that the export of jobs--service
>oriented and multi-skilled--helps the economy's overall performance.
>Most significant, the Fed chairperson went along with the outlandish
>pre-election claim by the Bush economic team that they will create aroun
>d 2.7 million jobs in the coming fiscal year.
>
>"Greenspan Predicts Job Growth Will Soon Begin to Accelerate," heralded
>the Wall Street Journal of Feb. 12. The article stated that "it is
>possible that the unemployment rate could drop close to 4 percent from
>5.7 percent."
>
>It's all smoke and mirrors
>
>However, after a report that there was a net gain of only 112,000 new
>jobs in January, after a minuscule 1,000 in December (later revised to
>16,000), Morgan Stanley market economist William Sullivan commented,
>"The level of job creation is well under expectations and certainly
>disappointing for the 26th month of an alleged economic recovery."
>
>Dominic Konstam, head of interest-rate strategy of Credit Suisse First
>Boston, which recently merged with the Bank of America, expressed a
>similar sentiment. "The number was very disappointing ... . We're not
>getting the jobs to replace the stimulus [in the economy], which will
>fade once the first quarter passes."
>
>Ken Mayland, president of Clear View Economics, pointed to "Employers
>who are working their workers longer hours instead of hiring more bodies
>... . This economy under normal circumstances should be generating
>200,000 to 300,000 a month in new jobs." (Wall Street Journal, Feb. 6)
>
>According to a column by Bob Herbert in New York Times of Feb. 16, while
>the administration predicted that 5.5 million jobs would be created in
>the 18 months from July 2003 to the end of this year, only 296,000 have
>been created in the seven months that have passed so far.
>
>So why is there no job growth of any significance? What happened to the
>idea that an expansion of the economy, a falling dollar, and other
>economic fundamentals automatically motivate employers to hire workers?
>They're making more profits, but does this translate into job creation?
>
>The manufacturing sector has cut jobs for 42 months in a row, despite
>the fact that the Fed has kept interest rates at 1 percent, the lowest
>in 45 years.
>
>The crisis lies embedded in the capitalist system. Boom cycles are
>getting shorter in duration. The one lasting from 2002 to 2004 has been
>jobless.
>
>Capitalism can't exist without an army of the unemployed. It has always
>been a powerful weapon against the working class, exerting pressure on
>the employed sectors to keep wages down in order to raise profits.
>Corporate America has reaped the spoils of a technological revolution,
>enabling it to raise the productivity level and cut labor costs without
>significant hiring.
>
>Around 25 percent of U.S. productive capacity is idle. A similar
>phenomenon has displaced millions of production workers around the
>globe. Greenspan is well aware of this but covers it up with ill-founded
>optimism on job creation, based on a recent slowdown in the rate of
>increase in productivity. He believes employers will begin to hire
>big-time based on growing demand for goods and services here and abroad,
>thanks to the falling dollar and 1 percent interest rate on borrowing.
>
>Forewarned is forearmed
>
>The U.S. trade deficit has reached nearly $500 billion, the largest in
>history. Consumer confidence plunged in early February.
>
>The prognosis of leading capitalist analysts and economists is not
>whether, but when, a crash is coming. Many are already drawing parallels
>to the stock market crashes of 1929 and 1987, which came after the stock
>markets reached record levels. Just as Greenspan is now painting his
>pastel picture of an upsurge, so optimism reigned supreme then.
>
>For example, the prevailing mood on Wall Street just one month before
>the greatest and longest crash in modern history was expressed in a Wall
>Street Journal article on Sept. 4, 1929: "Many are looking for technical
>corrective reactions from time to time, but do not expect these to
>disturb the upward trend for any prolonged period." The market was
>already starting to turn down then. The Dow Jones did not return to the
>level of Sept. 3, 1929, until November 1954.
>
>Similarly, in 1987, the stock markets had been in a bull market for
>years. New highs were taken for granted. When the stock market began to
>drop, most analysts called it a correction. It took David
>Rockefeller--Mr. Capitalist--on Oct. 29 and 30, 12 days after the crash,
>to go on CNN and call it "a stock market crash of the dimensions of
>1929."
>
>In the March 2000 stock market crash, declines of 49 percent in the
>Standard and Poor's 500 stock index, and 78 percent in the Nasdaq
>high-tech market, wiped out small investors to the tune of $8 trillion.
>Millions of jobs were lost, plants closed and household income shrank
>dramatically. Before the crash, Greenspan had identified the developing
>crisis as merely "irrational exuberance." Stock prices did not stop
>falling until October 2002.
>
>There are now striking similarities to the boom of the roaring 1920s.
>The deep decline that followed in the early 1930s was only overcome by
>massive military spending begun in preparation for World War II. Today,
>hyper-speculation, a revolution in technology, a currency crisis and a
>surge in productivity have reduced the incentive to invest and rehire
>workers from the vast army of unemployed.
>
>The 1930s led to the greatest working-class upsurge in modern times in
>the U.S. Militant sit-down strikes spread across the country. Unemployed
>councils organized mass mobilizations of the jobless throughout most
>cities. They raised the popular slogan, job is a property right." They
>won progressive legislation.
>
>It's time for the workers and the oppressed to review this page in
>history.