Best of the Week
Most Popular
1.War on Cash, Bank of England Planning Hyper QE, Scrapping Cash for Digital Currency - Nadeem_Walayat
2.Stock Market End Run Smash Crash Looks Imminent... - Clive_Maund
3.Europe Refugee Crisis, UK to Repatriate 120,000 Hungarian Economic Migrants Back to Hungary - Nadeem_Walayat
4.The Great Deflation Will Destroy All Bubbles – These Too - Harry_Dent
5.Deflation Signals Abound for U.S. Dollar, Forex Markets and Commodities - Rambus_Chartology
6.U.S. Housing Market Two Outs in The Bottom of The Ninth - James_Quinn
7.Poland, Czech, Slovakia and Hungary Refugee Hypocrisy After Flooding UK with 4 Million Economic Migrants - Nadeem_Walayat
8.The Two Real Reasons Crude Oil Prices Are Currently Slipping - Dr. Kent Moors
9.R.I.P. Interest Rates - Andrew Snyder
10.Steps from a Deep October Stock Market Selloff - Bob_Loukas
Last 5 days
A Key Oil Price Trend That Everyone Is Missing - 6th Oct 15
Stock Market Turn Appears to Have Been Made - 6th Oct 15
Designing a Dividend Growth Portfolio for a Specific Retirement Yield Objective - 6th Oct 15
Peter Schiff Predicts Gold Price Breakout - Video - 6th Oct 15
Theresa May Declares War on Immigration - Conference Speech Full Transcript - 6th Oct 15
Is Russia Plotting To Bring Down OPEC? - 6th Oct 15
Target Date Funds As Aid In Retirement Investment Portfolio Design - 6th Oct 15
Stocks Bear Market Apocalypse Imminent Crash Gets Nuked Again - 6th Oct 15
Redesigning Internet and Facebook to Explore Their Full Potentialities... - 5th Oct 15
Nightshades Curb Your Enthusiasm - 5th Oct 15
U.S. Recession Watch, High-Yield – Rising Defaults - 5th Oct 15
The Social Challenge to Find Humanity in Capitalism - 5th Oct 15
Fed Interest Rate Hike: "I don't care. It doesn't really make much of a difference" - 5th Oct 15
Gold Rose 2.2%, Silver Surged 5.4% After Poor Jobs Number On Friday - 5th Oct 15
Gold, Silver Precious Metals: a Critical Week Ahead - 5th Oct 15
Stock Market Correction Still in Force - 5th Oct 15
Gold Price Change in Character - 5th Oct 15
Putin’s Blitz Leaves Washington Rankled and Confused - 4th Oct 15
More Selling for Stock Market, Gold? - 4th Oct 15
Gold And Silver – A Reality Check - 3rd Oct 15
Stock Market Primary IV Still, or Primary V Underway? - 3rd Oct 15
The Oil Industry’s Day of Reckoning - 3rd Oct 15
U.S. Interest Rate Hikes Keep On Slippin' Into the Future; Treasury Yields Sink Again - 3rd Oct 15
China's Stock Market Crashing; Time for Panic or Restraint - 3rd Oct 15
SPX Stocks Bulls Struggle to Regain the Upper hand... - 2nd Oct 15
The Two Faces of Stock Market Volatility - 2nd Oct 15
Money Supply and the Fed’s Serious Inflation Risks - 2nd Oct 15
Stock Market How Bad Can This Get, And How Fast? - 2nd Oct 15
A Worrying Set Of Recession Signals - 2nd Oct 15
Negative Jobs Report Sents SPX, TNX Lower - 2nd Oct 15
Don't be Fooled by the Recent Equity market Rallies. Its a Bear Market, Stupid! - 2nd Oct 15
US Bond Market - How to Fix This - 2nd Oct 15
Survival Secrets from Colorado Resource Investing Front Lines - 2nd Oct 15
What Two Risks From Rising Interest-Rates Could Each Trigger A New Global Crisis? - 1st Oct 15
Stock Market S&P 500 Volatility-Based Price Probability Range - 1st Oct 15
Dow Stock Market About To Crash Like October 1929? Get Your Physical Silver - 1st Oct 15
Stock Market Negative Expectations Once Again - Will It Break Down? - 1st Oct 15
Advice for Biotech Investors: 'Hold Your Powder' 'til Winter - 1st Oct 15
Best Short-Term Commodity Market Opportunities - Video - 1st Oct 15

Free Instant Analysis

Free Instant Technical Analysis

Market Oracle FREE Newsletter

No Economic Recovery in Sight, Reasons Why Global Capitalism Can't Recover Anytime Soon

Economics / Great Depression II Dec 06, 2010 - 08:17 AM GMT

By: Shamus_Cooke


Best Financial Markets Analysis ArticleAs the recession grinds on, politicians in most industrial countries have an incentive to make exaggerated claims about the supposed coming economic recovery. Some say the recession is over. Obama is in the group that claims we're on "the road to recovery,” while other nations can only spot recovery "on the horizon.” Below are seven important social phenomena that point to a more realistic economic and political outlook.

1) Central Banks are Dumbfounded. The usual tricks that U.S. and European central banks use to avoid recessions are long-exhausted. Interest rates cannot get any lower. And because cheap money wasn't working, the printing press was turned up a notch, into what the U.S. federal reserve calls quantitative easing -- injecting hundreds of billions of dollars into the world economy, escalating an emerging trade war.

2) Trade War. For a global economy to grow, global cooperation is needed. But in a major recession all countries engage in a bitter struggle to dominate foreign markets so that their own corporations can export. These markets are won by devaluing currencies (accomplished in the U.S. by quantitative easing), installing protectionist measures (so that a nation's corporations have monopoly dominance over the nation’s consumers), or by war (a risky but highly effective form of market domination).

3) Military War. Foreign war is a good symptom of economic decay. The domination of markets -- every inch of them -- become an issue of life and death importance. Wars have been unleashed in Afghanistan, Iraq, and now Pakistan. "Containing" economies like China and "opening" economies like Iran and North Korea become more urgent during a major recession, requiring brute force and creating further global instability in all realms of social life.

4) U.S. Economy at a Standstill. The most important consumer market in the world, the U.S. is a nation of nearly bankrupt consumers. Nearly thirty million Americans are unemployed or underemployed, while further job losses are certain, due to nearly every state's budget deficit. The New York Times explains:

"Now states are bracing for more painful cuts, more layoffs, more tax increases, more battles with public employee unions, more requests to bail out cities. And in the long term, as cities and states try to keep up on their debts, the very nature of government could change as they have less money left over to pay for the services they have long provided." (12-05-10)

5) Bailout Capitalism. First it was the banks and other corporations that needed bailing out, and now whole nations. Western nations bailed out their banks by falling into the massive debt that they are now drowning in. Greece and Ireland have been bailed out, with eyes shifting to Portugal, Spain, and Italy. The entire European Union is being called into question as the Euro takes a beating in the bailout spree. If the EU is dismantled, the shock waves will quickly reach other economies.

6) Bailout Repercussions. All western nations -- including the U.S. and England -- are grappling with their national debts. Rich bond investors are demanding that these countries drastically reduce their deficits, while also demanding that the deficits be reduced on the backs of working families, instead of rich investors. This is tearing the social fabric apart, as working and poor people see their social programs under attack. In Europe mass movements are erupting in France, Spain, Portugal, England, Greece, Ireland, Italy, etc. Social stability is a prerequisite for a recovered economy, but corporate politicians everywhere are asking much more than working people are willing to give.

7) The Far Right Emerges. To deal with working people more ruthlessly, the radical right is being unleashed. In normal times these bigots yell furiously but no one listens. But in times of economic crisis they're given endless airtime on all major media outlets. The message of the far right promotes all the rottenness not yet eradicated by education: racism, xenophobia, religious intolerance, violence, and a backward nationalism that fears all things "foreign.” These core beliefs effectively divide working people so that a concerted campaign against the corporate elite is harder to wage. Meanwhile, labor unions, progressives, and other working class organizations are instead targeted.

The above phenomena do not happen in a normal economic cycle of boom and bust. These symptoms point to a larger disease in the international economic system, a disease that cannot be cured by politicians who swear allegiance to this deteriorating system and to the wealthy elite who benefit from it. To ensure that the economic system is changed so that working people benefit, large-scale collective action is necessary, based on demands that unite the majority of working people: a massive job-creation program at the expense of Wall Street, no cuts to Social Security and Medicare, a moratorium on home foreclosures, passage of the Employee Free Choice Act, and so on. With the unions in the lead promoting these demands, working people could put up a real fight.

Shamus Cooke is a social service worker, trade unionist, and writer for Workers Action (  He can be reached at Shamus Cooke is a frequent contributor to Global Research.  Global Research Articles by Shamus Cooke

© Copyright Shamus Cooke , Global Research, 2010

Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.

© 2005-2015 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Biggest Debt Bomb in History