LENIN'S TOMB: Capitalism, recession and resistance

Capitalism was bailed out at a global cost of some $20tn. But this didn't resolve the crisis - it shifted it from the private sector to the public sector, saving the investment banks from outright collapse at the expense of the public treasury, leading the sovereign debt crises we've seen. Now, having rallied behind bail-outs, global ruling classes are increasingly shifting behind austerity and structural adjustment after the fashion of that imposed on the 'global south' in recent decades. But that in turn will merely shift the crisis on to a new plane, because the private sector is not well-placed to make up for the sudden contraction in demand that is being imposed. There's nowhere to pick up the slack.

Look at the US. Money supply is plummeting, which means the rate of investments and transactions is collapsing. Companies aren't borrowing, consumers aren't borrowing, which means they aren't spending. Structural unemployment remains extremely high. Emergency legislation is being introduced to prevent nearly two million Americans from suddenly losing their unemployment insurance in the next week - though the extension is only until 30th November. If unemployment figures continue to be poor, some investors now say they are worried that the US will face a second recession. The fantasy of renewed growth led by auto sales, always groundless, has just been dealt another blow as sales fall. Now consider China. Having invested in a proportionally much larger stimulus than the US, its sluggish performance is sending Asian stock markets reeling. The strike wave that I described continues to roll on, which means that capital may find its ability to transfer the costs of the crisis to the Chinese working class limited.

via leninology.blogspot.com