In the wake of a series of downbeat economic reports, many economic analysts are warning their clients that the world economy is in for a prolonged period of economic stagnation and possibly another downturn.
In a series of articles in the Financial Times of London, the leaders of several key industries have made it clear that they expect the world’s economy to go sideways or downwards over the next 18 months. Industrial demand has declined significantly due not only to the economic crisis in Europe, but also due to declining demand from “emerging economies” like China and Brazil, whose relative economic strength over the past several years has been basically the only economic force keeping the world’s economy from plunging even deeper into the current depression. Yes, that’s “depression” with a “d”. The capitalist press has long pretended that the economic malaise that has spread across the globe since 2008 is “just” a “severe recession”. But for all intents and purposes, this is a depression – not, perhaps, as bad as the Great Depression of the 1930s, but it is the worst economic crisis since that time. So let’s just stop the faking and call it a plain old depression.
The bellwether steel industry is busy preparing to reduce capacity in the face of the economic slowdown in China.
“Rod Beddows, chief executive of Hatch Corporate Finance, which specialises in metals, says there is ‘massive pessimism’ in the steel industry about current conditions and future prospects, with the worries being most intense in Europe. ‘A lot of companies are floundering and not sure about how to alleviate the problems linked to overcapacity.
New thinking is required but seems absent.’ [Source: Financial Times (London); “Bleak outlook from ‘peak steel’ “, 8 July 2012]
The article goes on to say that just two months ago a “shock announcement” was made by one of the world’s leading steelmakers, ThyssenKrupp, that it was looking to sell two huge steel plants it had been in the process of building in the US and Brazil. These plants had been intended to satisfy what was, just a few years ago, a dramatic rise in demand for steel that was predicated on the continuing building boom in China, which had outstripped the steelmaking capacity in that socialist country. However, over the past two years, the Chinese economy has begun to stagnate due to the steep decline in demand from the twin disaster zones of world capitalism: the US and Europe.
In a separate article in the same uber-bourgeois business newspaper, Boeing, Inc., the US’ biggest exporter, is reported to have made public the results of their corporate economic wizards’ most recent examination of the innards of their very expensive crystal ball and concluded thusly: ” ‘We’re looking at a world economy where … we slog through the situation here in Europe and then once you get into the 2014 timeframe and beyond, you see more normal economic growth,’ said Randy Tinseth, Boeing’s vice-president of marketing. ‘What we are experiencing now will be normal for the next one to two years.’ ” [Source: Financial Times (London): “US set for earnings roadblock as growth falters”, 8 July, 2012.
So it looks like there is no end in sight to the economic crisis being faced by the capitalist system, which is rapidly driving down wages and living standards for workers all over the world.
So long as we stick with the capitalist system, this is the kind of “future” we can expect: boom-and-bust-and-boom-and-bust again, where the rich keep getting richer and the poor get whipsawed over and over again.
Have you had enough of this crap, fellow worker? Then let’s get to work putting an end to this insane economic thrill ride once and for all by abolishing the capitalist system and replacing it with a rationally planned workers democracy!
By the way: when we say “let’s get to work” we’re not talking to the guy next to you on the bus, we’re talking to you! YOU have to get involved building the Independent Workers Party; YOU have to dedicate the best part of your life to this work or it AIN’T GONNA HAPPEN! And we can all enjoy riding the big capitalist rollercoaster until the whole disaster ends with another Big Bang: World War Three! And that won’t be any fun at all, children.