The British economy grew by only 0.5% in the first quarter of 2011 and contracted by 0.5% the quarter prior, the WSWS reported today, causing many to concede that Britain is teetering on the edge of a “double dip recession.” The situation in the U.S. was not much better, with anemic first quarter growth of only 1.8%, following a decline of 3.1% the previous quarter.
If these numbers don’t sound worrisome enough, consider that the average time an American worker stays unemployed is now 39 weeks—the longest period on record. This has been especially hard on youth (ages 16-24), whose jobless rate was 18.4% last year—also a record high. Or consider this: Real earnings in the UK have contracted in each of the past four years, something the British haven’t seen since the 1870s, with household incomes predicted to decline another 2% this year.
Despite record corporate profits, U.S. business has refused to increase hiring. Business investment last year was 15% lower than before the financial crisis began, according to the WSWS. The profits have come from downsizing, speed-ups and wage cuts, not from expanding markets. The Fed’s solution has been to keep interests rates close to zero and loan billions of dollars to U.S. businesses, creating turmoil in international financial markets. The WSWS says that this turmoil has led to warnings by international finance capitalists that there is no prospect of pre-crisis conditions returning, and has increased their demands for further austerity for the working class. In other words, the current financial “crisis” is not just a cyclical downturn, but the beginning of a deliberate large-scale restructuring of socioeconomic relations set at returning working and middle class living standards to pre-Great Depression levels.
Meanwhile, the U.S. and its allies are engaged in numerous wars that may truly be endless. While these wars are costing the U.S. trillions of dollars (Joseph Stiglitz believes the Iraq war, alone, will cost the U.S. over $3 trillion by 2017) at a time when the government is crying poverty and threatening to slash social spending, the true costs of these wars in terms of civilian injuries and deaths, environmental contamination, loss of income, stress, PTSD and overall human suffering are immeasurable (and seemingly unimportant to most Americans). Immediately ending the wars in Iraq and Afghanistan (not to mention those in Pakistan, Libya and elsewhere) is the necessary first step toward alleviating all of this misery (and the U.S. federal deficit). However, this is unlikely to ever occur, as there is no President who wants to be known as the quitter who “lost” Suchandsuchastan. News footage of angry mobs torching the U.S. embassy, as U.S. troops flee into waiting helicopters to be airlifted to safety, is sure to turn voters against the president who gives those orders, as well as his entire party.
This is good news for business as it means continued taxpayer subsidies for private military contractors and arms dealers and protection for petroleum producers. It also means the government can continue crying poverty, making it much easier to justify austerity for working people and to transfer wealth to the rich.