No light at end of economic tunnel
Numerous politicians and economists, from all across the political spectrum, have decried the “slow rate of recovery” of the U.S. economy since the financial meltdown and great recession of 2007-08. The usual story, most often coming from the Democratic Party, is that while the “recovery” is too slow, there, nevertheless, is “light at the end of the tunnel.”
The Republican position is about the same, except that they assert that there can be no “light at the end of the tunnel” unless President Barack Obama is defeated.
None of the mainstream candidates question whether the capitalist economy is, in fact, undergoing a recovery at all. And none dare even whisper that government policies, as proposed by either the liberals or conservatives, have no chance of changing the direction that the economy will take.
One of the most recent commentators to join the fray is Catherine Rampell, an economics reporter for the New York Times, who writes that the current recovery, while very slow, is not the worst. Looking back at past periods of expansion following several post World War II recessions, she claims that “on almost every measure I looked at, there was at least one (completed) recovery that performed worse.” (New York Times, Aug. 10)
Rampell’s analysis is accompanied by a colorful chart that compares the present with past post-recession periods on the basis of a number of economic indicators.
Although her evidence actually undermines her thesis, Rampell assumes that there is some kind of recovery going on presently.
She states, for example: “Usually, payrolls grow 15 percent from trough to peak over the course of a business cycle. So far in this recovery, they have grown only 2 percent.” Or, “The only major metric I looked at wherein today’s recovery outperformed the average expansion of the previous 60 years was corporate profits.”
Given that corporate profits rose by 45 percent compared to a 2 percent rise in payrolls (Rampell’s figures), it is difficult to see how there is any sort of “light at the end of the tunnel” unless it be the light of an approaching train!
Like most mainstream pundits, reporter Rampell, while mentioning the Great Depression, does not include it in her analysis. But she should! The fact is that conditions today are different than those in the recent past.
Marxist economics writer, Fred Goldstein, has written that far from being in a recovery, we actually “are at the early stages in the development of the present crisis.” (Introduction to “Capitalism at a Dead End,” 2012, which can be read at workers.org)
Comparing the current crisis, not to the post WWII recessions, but to the deeper and more significant Long Depression of 1873, and the Great Depression of the 1930’s, he concludes that “the capitalist system, as in those two previous great crises, cannot restart itself despite all the efforts of central banks and capitalist governments.”