Friday, April 26, 2013

Political-Economy

Fordist mass-production required armies of unskilled workers and provided more work for skilled workers. It also destroyed some sectors of craft production. Imperialism helped provide emigration and free land as an outlet for Europe's surplus populations. Farming was mechanized, increasing yields and freeing up labour. More people entered cities and utilized shops and services. The economy expanded. It was often a brutal process. Imperialism has already been mentioned. The cotton textile trade was one of the first mechanized industries. It relied on brutal working conditions in the mills and slavery from Africa to the United States.

Much of Britain's imperial adventures and no doubt a vast portion of the jobs for the rising middle classes was funded by the crushing taxes on the peasants of India. European imperialism brutalized Asia, Africa and the Americas and Australia.

Much of capitalism's benefits were inadvertent. This is as it should be, according to the proponents of Adam Smith's "Invisible Hand."

Post-1945 automation began to slowly, inexorably reduce the absolute proportion of unskilled manufacturing labour required for production. That was okay. White collar corporate jobs were booming, as was government employment. Since the 1970s though, employment in the "developed" countries has been under pressure of automation (at an accelerating pace), "globalization" of unskilled work to "less-developed" countries, and an increasing trend of "flexible" labour laws, allowing employers to provide ever more tenuous employment. White collar employment has been subjected to the same pressures, especially since the 1990s, through the ICT revolution. Finally, government employment has stagnated and, in many important areas, been reduced.

There's no question but that economic growth during this period of assaults on labour has been funded by increased household debt. "Credit" (the other word for this debt) is what financed the industrialization of China and (to a lesser extent) India. But (as plodding dullards like the late Margaret Thatcher liked to say) debt cannot be extended and enlarged indefinitely. A financial bubble, based upon a real-estate bubble, based upon deregulated credit and financial markets, burst, creating a multi-trillion dollar debacle.

And we're going back into it:
The media is calling it a “Spring swoon”,  but it’s really just the next phase of the long slump.
After a strong showing in the first quarter (Q1), the economy is starting to lose steam for the forth year in a row. The main cause for the slowdown is –what Bloomberg calls–”the biggest federal-budget tightening in more than 60 years”.  The impact of the budget cuts can already be seen in  retail sales, personal consumption and consumer confidence.  Eventually, they’ll be felt throughout the entire economy pushing unemployment higher and shrinking GDP by 1.6 percent or more.
After a strong showing in the first quarter (Q1), the economy is starting to lose steam for the forth year in a row. The main cause for the slowdown is –what Bloomberg calls–”the biggest federal-budget tightening in more than 60 years”.  The impact of the budget cuts can already be seen in  retail sales, personal consumption and consumer confidence.  Eventually, they’ll be felt throughout the entire economy pushing unemployment higher and shrinking GDP by 1.6 percent or more.
So, don’t expect any help from overseas–like an uptick in exports–because it ain’t gonna happen. China’s investment-heavy economic model is beginning to crack beneath its prodigious debt-load and the slump in Europe will persist until EU elites achieve their goal, which is to decimate the social model that provides health care, pensions and labor protections for the people in the 17-member Eurozone. That’s what this is all about. Once the EU’s working population has been reduced to third world poverty, then policymakers will return to a pro-growth strategy, but not before. But that’s going to take a while, so don’t hold your breath.

But it doesn’t matter how discredited the policy is, the politicians are going to keep ratcheting up the pressure until they get what they want, which is, more privatization of public assets, more busting up federal unions and more dismantling critical safetynet programs. (particularly, SS, Medicare, Medicaid) Present policy has nothing to do with growing the economy or putting people back to work. It’s just plain old class warfare. 



The answer is increased government spending, higher taxes on the wealthy, a green energy revolution and a turn towards zero-growth and reduced consumption. We can still do this. IF we restore the democracy we had and improve upon it.

I don't feel like dealing with these fucking formatting glitches.

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