http://www.workers.org/ww/2004/economy0122.php
What good is a 'recovery' without jobs?
By Milt Neidenberg
Cheerful thoughts about a boom economy in the foreseeable future have been seriously dampened by the December job-growth figures reported by the Bureau of Labor Statistics. Far from the 150,000 new jobs predicted by just about every high-priced Wall Street analyst and bourgeois economist, they turned out to be a miniscule 1,000. When the figures were released, the Dow Jones industrial average dropped 133.55 points and the NASDAQ 13.33.
How could they have gone so far off target? Do they lack the data to predict so significant an economic statistic as job growth?
They went astray because the economy is unpredictable and expanding out of control, even while there are signs of stagnation and crisis.
The Wall Street Journal on Jan. 9 rounded up a group of Wall Street economists for a consensus. There was none. "The payroll gain of only 1,000 is ... quite shocking. ... I would certainly not have expected anything resembling that," said Bill Cheney, chief economist at John Han cock Financial Services. And there was James Glassman, a J.P. Morgan economist: "We're at least three to four million jobs below what we should be."
Then there were the optimists. "Over the next few months, all the signs are that payroll employment will rise dramatically," stated Ian Richardson, chief economist at High Frequency Economics. But the chief economic officer at Wells Fargo, Sung Won Sohn, thought otherwise: "Neither business nor potential employees have confidence in the economy."
The current fear is that the economic expansion, which began around Novem ber 2001, is running out of steam. It has been a jobless recovery. Overall the economy dropped by 74,000 jobs in 2003. Since President Bush took office in January 2001, over 2.3 million jobs have disappeared. More than 300,000 workers were permanently dropped from the job market, and the index of hours worked fell below the 1998 level.
The traditional unemployment rate does not count various segments of the working- age population--people not looking or working part-time. More "discouraged workers" explains why the unemployment rate dropped from 5.9 to 5.7 in December, but the Bush administration put a positive spin on it.
Consumer confidence is on the decline. Consumer spending represents two-thirds of the Gross Domestic Product. People can't continue to spend when there is no income. Consequently, under the most relentless, unprecedented rise in productivity, the markets have become glutted with goods and services.
Intense exploitation of the workers and the oppressed sections of the population also has drawbacks for the capitalists. As Karl Marx explained, if the capitalists are exploiting fewer workers, there's less unpaid labor, less extraction of surplus value, and consequently less profit for the boss class.
Echoes of 1930s
This is no normal recovery. A Jan. 10 New York Times article, headlined "As Far as Jobs Go, Bush Can Only Wait," said: "Both the White House and the Fed [Federal Reserve Board] are confronted by a recovery unlike any other in history. Economic growth has been soaring for months, corporate profits have shot up, and the stock market has regained much of its ebullience. Yet job creation has been slower than in almost any previous recovery and wage growth has slowed to a crawl."
Today more than one out of every 10 workers is unemployed. This rises to three out of 10 among Black and Latino teen agers and over two out of 10 in the Black adult population. The unofficial rate is even higher. These brutal facts expose the so-called trickle-down theory: that good times bring good jobs.
Is this a recovery unlike any other in history? No. It is like the 1930s. Edmund S. Phelps, professor of political economy and director of the Center on Capitalism and Society at Columbia University, commented in the Jan. 5 Wall Street Journal that "The technological developments and overseas tensions that slowed and limited the 1930s recovery have clear parallels in the economy's present situation." The unemployment rate then was one out of every four.
Prices briefly dropped during the most acute stage of the economic crisis of the 1930s, but the upward spiral of prices soon resumed. Today, prices of commodities are on the rise due to runaway deficits and rising interest rates, but even more because of the monumental war expenditures that are causing the devaluation of the dollar.
According to Robert Pollack, professor of economics at the University of Mas sachusetts at Amherst, "Five percent more money is being pumped into the economy than taken out in tax revenues ... and 60 percent of the 3.3 percent growth in the GDP is attributed to the military."
Military spending a depressant
Military spending of the astronomical dimensions required to pay for the Iraq and Afghanistan wars has diverted hundreds of billions of dollars from much-needed social programs. Sam Marcy, chairperson of Workers World Party, said in a 1975 discussion bulletin, "Instead of acting as a stimulant to capitalist expansion and accumulation [military spending] turns into its dialectical opposite and becomes a depressant. Like any drug, it may operate to accelerate recovery from illness, but if administered on an ever-continuing and ever-increasing basis with out letup, it becomes toxic and poisons the organism." This is even more true today.
Dark clouds loom for the capitalist system. If there is no job growth in the coming months, the Bush reelection will be in trouble. A number of Democratic presi den tial candidates, as the 2004 election grows nearer, will present proposals that they promise will bring back jobs, peace and prosperity. Promising won't make it so. These candidates support the system of monopoly capitalism and the exploitation of labor for profit.
The occupations of Iraq and Afghan istan have not brought Wall Street and Washington spoils from their wars of aggres sion. At home, the capitalists believe the cure lies in layoffs, cutbacks in social programs, and intolerable productivity and poverty.
To the multinational workers and oppressed nationalities, recovery means jobs for all and insuring work opportunities for the oncoming generation. It means a rise in the standard of living for them and their loved ones. There is a conjuncture of class-wide interests with other movements--the anti-war activists, the civil rights/civil liberties and anti-globalization resisters. And most important, the struggle must be elevated within the labor movement, especially building solidarity with immigrant workers. The crisis requires joining forces and taking the independent road to fight back.
Reprinted from the Jan. 22, 2004, issue of Workers World newspaper
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