Why the economic crisis won't go away

Scan page 5

Even President Bush and the head of the Federal Reserve Bank, Alan Greenspan, now admit what working people have known for some time-the economy is in bad shape, and no one can predict when the turnaround will begin. And when it does, it's not clear if relatively hard times will not be with us for a long while.

The current recession is dragging on longer than other recessions of the past 20 years, even if it hasn't yet plunged as deep. Are we in for another dip, maybe even something that would classify as a depression?

Current economic news is not good for workers: Layoffs are again on the rise, and the announcement by General Motors that it will close many plants and lay off 75,000 workers in the next four years points to longer-range problems.

A key thing to watch is whether the U.S. recession will dovetail with recessions in Germany and Japan, and thus become truly internationalized.

The pundits the capitalists hire to ponder these things show some signs of worry. The New York Times reports that the Japanese stock market has been slidingand more important, that it is not raising capital at the previous high rate. It seems that the capitalists have begun to scale back on the high levels of investment in new plants and productive equipment that have driven the Japanese economy.

The German press is expressing fears of a recession. If the downtum becomes generalized throughout the capitalist world, it will become deeper here, too. But that is still a big "if" at present, and no one has a crystal ball that works.

Long-range economic trends Nevertheless, longer-range trends are evident. Following the Second World War and the failure of the workers of Europe to take power—as a result of Stalinist betrayal— capitalism was restabilized on the basis of the massive destruction it had wrought in the great bloodletting.

The rebuilding meant that the world market expanded fast enough to absorb investment by the rich on a scale in which there was opportunity for most of them.

But by the 1970s, it became clear that situation had come to an end. While the world market continued an overall expansion, within the ups and downs of the business cycle, it was no longer at the rate required to absorb all the capital the rich had piled up in profitable (for them) investment.

One result has been the growth of "too much" productive capacity. The GM announcement was one indication. There are too many car-producing facilities in the world in relation to the demand for cars in the world market, and plants have to be shut down.

In the 1980s, "too much" capacity for steel-making in the world resulted in massive shutdowns of steel plants.

Increasing international capitalist competition has become more and more the order of the day. Under the lash of this competition, the natural tendency of the rate of profit to fall has again reasserted itself. This in turn intensifies competition and drives the big capitalists to try to squeeze more from the workers and from the "underdeveloped" capitalist countries.

While the billionaire families have investments all over the world, they use control over "their" goverments to further their own interests as against their competitors. This includes their competition over who gets to exploit the "Third World" countries.

Twice this century, such competition has grown so intense that the capitalists plunged us into world wars.

We should recall that the United States, Germany, and Japan emerged as the big contestants in the Second World War. The other advanced capitalist countries had to align with one camp or the other. While the United States came out of the war as the dominant capitalist power, that position has been eroded with the rebuilding of Germany and Japan. Now once again, the Wart, dear. That's noT a homeless is well founded.

What does this mean for the countries of Eastern Europe and the former USSR?

The bureaucrats in those countries have charted a course towards the restoration of