Economic crisis never ends for the majority of the population.
A popular topic of economics is the well-known recession. A concept with a “formal” definition of “two consecutive quarters of negative Gross Domestic Product growth.” The most recent recession occurred in 2008-09, and experts say we have recovered, but if we look back to the past decade, are things better?
According to politicians, we’ve never had so much wealth in the world. Since the “end” of the recession, total wages are going up, unemployment is going down and we’re producing more goods and services than ever.
What politicians don’t like to discuss are the material conditions people feel outside of the economist’s bubble. Wages have not risen to match inflation, the cost of living keeps increasing beyond our income, all forms of private debt keep increasing, the amount we save keeps declining and productivity and corporate profits continue to rise.
On a larger scale, public investments and “austerity”—neoliberal economic policies intended to reduce public investments—have proceeded aggressively, forcing steep cuts to local, state and federal government budgets in response to the recession. Public spending for state governments, which are required to pass “balanced budgets,” was severely affected, leading to massive cuts in healthcare, social services and education from which we have never recovered.
The end of the recession was really only an end of the struggles for “too-big-to-fail” banks and the wealthy people who stood perched, ready to buy debt-laden assets for less than anyone owed on them. Bankers who gambled and lost with other people’s assets got paid, scam-artists—AKA investors—further solidified their stranglehold on wealth, while the working class saw its buying power deteriorate.
The crisis never went away.
If there was never an end to the 2008 recession, there can’t really be “another” recession. A recession implies that our economy is at times “good” and at times “bad.” All people are not better off during eras of economic growth, and everyone is not worse off when the economy is bad. The working class is constantly getting screwed, while the ruling class of capitalist vultures happens to make it out just fine in good times and bad.
The situation faced today is that during eras of “economic crisis” governments and media corporations have all the necessary political cover to economically attack the working class and increase profits.
Jobs are outsourced or cut in the private and public sectors, workers are replaced with technological advancements and public service expenditures decline. The ruling class makes out like bandits and at times are even successful in ensuring they aren’t taxed by stressing their role as “job creators.”
The Federal Reserve, the U.S. central bank, has continually injected tens of billions of dollars in bank’s coffers overnight since September 2019, because large banks don’t have enough cash in their reserves to service corporate loans, and more cash-flush banks are refusing to lend to them. The last time this occurred was during the last 2009 “recession.”
The reason this is happening is partially explained in the International Monetary Fund’s 2018 Global Financial Stability Report, which wrote that the debt owed by firms that cannot be serviced with earnings—known as debt-at-risk—could rise to $19 trillion, almost 40% of total corporate debt in major economies, “above crisis levels.”
At a recent IMF meeting, Mervyn King, the former governor of England’s central bank, said: “By sticking to the new orthodoxy of monetary policy and pretending that we have made the banking system safe, we are sleepwalking toward that crisis.”
The above statement recognizes what common knowledge and Occupy Wall Street already knew. Mild financial regulations and massive government bailouts didn’t resolve the underlying issues that led to the 2008 crisis. If we never addressed the causes of the previous crisis, why wouldn’t history repeat itself?
The only way to properly explain the recurring and never-ending series of crises is to understand the principle that governs a capitalist society: the profit motive, which drives every aspect of economic decision-making and squeezes most of the world’s population to worse material conditions.
As our technological achievements continue to increase, we’re working more, for less, and exploiting the Global South at ever harsher and faster speeds. Every smartphone that reaches our hands is built with African minerals, southeast Asian labor and meanwhile, hasn’t reduced any of our workloads or consciences.
Current economics is a complete and utter lie. It remains unscientific, obfuscating its purely ideological nature with mathematics and pseudoscience. Consider it astrology for capitalists: Economics has an aesthetic relation to reality, and unlike astrology, is solely peddled by those who are interested in maintaining an oppressive and exploitative world.