BAD, WORSE, THE WORST!
07 02 2012
The global crisis has reached worrying dimensions, everything might be worse.
The global crisis has not remained limited to a few banks as was claimed. It was not limited to the financial sector either. In any case it was not limited to a few years. All limits have been surpassed by the crisis. Should any remain, the crisis is set to soon overcome them.
During the onset of the crisis, many became unemployed in the USA. The last three or four years were probably felt to be much longer by them. Very few could find other employment. Very few could hang on to their savings. The rate of unemployment is not falling. Given the new entrants to the labour market every year, it becomes easy to see why it is very difficult for the US economy, in crisis as it is, should find it very difficult to lower unemployment in the short term.
On the other hand, Europe is in poor condition. It will get worse. The situation in Greece is well known. Other countries aside, Spain and Italy are still at the root of greatest concerns. The greatest difficulty is that the crisis policy in Europe is not working. Harsh austerity measures, pressure for structural reform, tax hikes and pay cuts are not working. On the contrary, they seem to exacerbate the situation. What has happened to poor Greece is for everyone to see.
Both in the USA and in Europe, the year 2012 will be shadowed by and under the influence of elections. There is no reason to make elaborate predictions. However, the rise in food prices in Rome or the angry demonstrations of the unemployed youth in Madrid –just like the spreading and strengthening “occupy” movement in the USA, could lead to things getting out of control.
Anyone who has lost their job or their home and saw their income dwindle in this process have seen how destructive neo-liberal policies can be. Neo-liberal economics may have provided high income and high consumption for a while. But later, they have caused a disaster. For this reason capitalism should be tamed and not allowed to become wild.
For the global economic system to be sustainable, it should primarily be concerned with, or even provide, social rights. Developments since the beginning of the crisis have shown that anywhere that is affected by the global crisis, there were either social explosions or a significantly heightened risk.
Should urban riots begin or some goods or firms face boycotts on a global level, the uncomfortable present will look like a dream. The process may take an unexpected turn towards civil disobedience in politics and in the economic field. Should such a possibility be realised, it would be very difficult to restore things.
Therefore capitalism needs to be made producer-friendly and consumer-friendly. There is not much room for optimism over this point. This was seen to be a necessity years ago, but there were no improvements. Should the global system not undertake the rehabilitation it requires, the crisis storm of global proportions may soon begin.