The American Recession

The US economy is caught in serious stagnation, a situation flowing partly from the economic crisis that began in 2007 and partly from the way in which most governments responded to that crisis. US businesses and investors increasingly look elsewhere to make money. Growth-oriented activity is leaving the US economy, where it used to be so concentrated. The US was already becoming less important as a production centre as profit-driven major US corporations shifted manufacturing jobs to cheaper workers overseas, especially in China. In recent decades, those corporations' export of jobs expanded to include more and more white-collar and skilled work outsourced to India and elsewhere. Now, US corporations are also spending their money on office, advertising, legal, lobbying and other budgets increasingly where the expanding markets are – and not inside the US.

The most widely cited Americn unemployment rate remains at 9% for workers without jobs but looking. If instead, we use the more indicative U-6 unemployment statistic of the US labour department's bureau of labour statistics, then the rate is 15.9%. The latter rate counts also those who want full-time but can only find part-time work and those who want work but have given up looking. One in six members of the US labour force brings home little or no money, burdening family and friends, using up savings, cutting back on spending, etc.

1.5-2m home foreclosures are scheduled for 2011, separating more millions from their homes. After a short upturn, housing prices nationally have resumed their fall.

The mass of US citizens cannot work more hours – the US already is No 1 in the world in the average number of hours of paid labour done per year per worker. The mass of US citizens cannot borrow much more because of debt levels already teetering on the edge of unsustainability for most consumers. Real wages are going nowhere because of high unemployment enabling employers everywhere to refuse significant wage increases. Job-related benefits (pensions, medical insurance, holidays, etc) are being pared back. According the bureau of labour statistics, during 2010, the pay for average workers rose 2% while the pay for CEOs rose 23%.

The US "middle class" – so celebrated after the second world war even as it slowly shrank – is now fast evaporating, as the economic crisis and the government's "austerity" response both favour the top 10% of the population at the expense of everyone else.

The largest corporations and richest citizens long ago learned that if you want to sustain an extremely unequal distribution of wealth and income, you need an equally unequal distribution of political power. Those corporations use their profits to pay huge salaries and bonuses to their executives, to pay big dividends to their major shareholders, and to "contribute" to politics. The corporations, their top executives and the major shareholders whom they enrich all regularly finance the political campaigns and politicians that perform that sustaining function. An unequal capitalist economy pays for the undemocratic politics it needs.

From here