Economic crisis worsens

British students protest against making them pay for the capitalist crisis

After the stock market panic of Thursday, the fate of the euro and the European Union is more uncertain than ever before: here.

USA: The 0.1 percent decline in the official jobless rate in July was entirely due to the fact that 193,000 unemployed workers dropped out of the job market, not because of any increase in hiring: here.

The number of Americans using the government’s Supplemental Nutrition Assistance Program (SNAP) — more commonly referred to as food stamps — shot to an all-time high of 45.8 million in May, the USDA reported. That’s up 12% from a year ago, and 34% higher than two years ago: here.

Labor Force Participation Hits New Low: here.

US credit rating downgrade prompts warning from China: here. And here.

Michael Moore | 30 Years Ago Today: The Middle Class Died. Michael Moore, “Beginning on this date, 30 years ago, Big Business and the Right Wing decided to ‘go for it’ – to see if they could actually destroy the middle class so that they could become richer themselves. And they’ve succeeded. On August 5, 1981, President Ronald Reagan fired every member of the air traffic controllers union (PATCO) who’d defied his order to return to work and declared their union illegal. They had been on strike for just two days”: here.

Much of the commentary on the significance of the Standard and Poor’s downgrade of the US credit rating has dismissed the significance of this event on the grounds that the US would never default on its debt. But 40 years ago today the US did default when President Nixon went on Sunday night television to tell the world that America would no longer honour its commitment to redeem US dollars for gold: here.

The Struggle against Stupidity: European and U.S. Governments Continue Wrecking Their Economies: here.

Britain: Mothers have been priced out of work and forced back into the home by soaring childcare costs and government spending cuts, researchers said today: here.

Britain’s top company directors have amassed pension pots worth an average of £3.9 million as the rest of the nation sees their retirement packages savagely attacked: here.

1 thought on “Economic crisis worsens

  1. United States: Land of the 1%

    “The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent …

    “One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided.

    “While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous — 12 percent in the last quarter-century alone. All the growth in recent decades — and more — has gone to those at the top.”

    — Joseph E. Stiglitz, former World Bank chief economist, in the May Vanity Fair

    Of the 1%, by the 1% for the 1%

    “Wealth begets power, which begets more wealth. During the savings-and-loan scandal of the 1980s — a scandal whose dimensions, by today’s standards, seem almost quaint — the banker Charles Keating was asked by a congressional committee whether the $1.5 million he had spread among a few key elected officials could actually buy influence. ‘I certainly hope so,’ he replied.”

    — Stiglitz

    Profits grow at wages’ expense

    “If you’re wondering why American consumers are still flat on their backs, rendering the economy similarly supine, the answer is both fundamental and simple: It’s not just that so many of them are unemployed. The ones who are employed are also underpaid.

    “Don’t take my word for it — take that of Michael Cembalest, the chief investment officer of J.P. Morgan Chase. He asserted in the July 11 edition of ‘Eye on the Market,’ the bank’s regular report to its private banking clients, that ‘US labor compensation is now at a 50-year low relative to both company sales and US GDP.’

    “The primary subject of Cembalest’s report isn’t wages. It’s profits — specifically, the fact that profit margins (the share of a company’s revenue that goes to profits) of the Standard & Poor’s 500 companies are at their highest levels since the mid-1960s, despite the burdens of health-care costs, environmental compliance and other regulations that are presumably weighing down these large companies …

    “’There are a lot of moving parts in the margin equation,’ Cembalest writes, but ‘reductions in wages and benefits explain the majority of the net improvement in margins.’

    “This decline in wages and benefits, Cembalest calculates, is responsible for about 75 percent of the increase in our major corporations’ profit margins.

    “Or, to state this more simply, profits are up because wages are down.”

    — July 20 Washington Post


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