By Jon Kofas
Introduction
In so far as capital markets predict economic trends, the downturn in global markets during December 2015-January 2016 indicate the kind of contraction that IMF economists are also predicting after revising earlier estimate downward for GDP of major economies. “World stock market losses are approaching $8 trillion so far this year and investors last week poured the most money into government bond funds in a year, suggesting they fear the global economy could tip into recession, Bank of America Merrill Lynch said on Friday (22 January 2016.” http://finance.yahoo.com/news/nearly-8-trillion-wiped-off-140643148.html
What does this say about the nature of the economic recovery after the 2008 Great Recession, about the soundness of the economies not just of developing nations suffering the most but of the core countries? Was it a hollow recovery and an uneven recovery mostly limited to the core countries and within those to the top 1% of income earners? Does this mean that the fault rests with governments that are not providing even greater incentives, even greater tax breaks, even greater corporate welfare measures for capital? Is this just another “market correction” or is capitalism manifesting structural problems pointing to chronic decay?
If one takes seriously the mainstream media coverage, listens to market analysts, politicians, journalists and pundits, the inevitable conclusion is that fault for the economic problems rests in anything but gross socioeconomic inequality, and the income and wealth inequality on a world scale. It is simply astounding to read and hear that the fault of the global markets tumbling rests with everything except the structural flaws within the system that includes the following:
1. Wealth concentration: Although there are literally thousands of books, articles, and other empirical studies showing the incontrovertible evidence of wealth concentration and its detrimental effects on society, nothing has changed even when the capitalist economy is threatened with imbalances both at the microeconomic and macroeconomic levels. Sixty-two people own more wealth than 3.6 billion of the world’s bottom-tiered income population; Four Americans own as much wealth as 40% of the US bottom-tiered population. “A global network of tax havens further enables the richest individuals to hide $7.6 trillion. The fight against poverty will not be won until the inequality crisis is tackled.” https://www.oxfam.org/en/research/economy-1?utm_source=oxf.am&utm_medium=Znhx&utm_content=redirect
2. Artificial dollar value as a hard currency losing its preeminent global status, a reality that has been brewing since the IMF secretly warned President Eisenhower in the late 1950s that the chronic US balance of payments deficits accounted for an artificially high dollar value. US currency manipulation through the Federal Reserve and imposing monetary austerity on most of the underdeveloped countries through the IMF, thus keeping capital concentrated in the core nations, has kept the dollar artificially high to the detriment of other economies using the dollar as a hard currency to trade. Because of China’s rise to a preeminent global economic status and the increasing skepticism on the part of many countries about the value of the dollar as a hard currency that only helps the US, we have more diversification in the basket of hard currencies under the IMF Special Drawing Rights than ever before (euro, yen, British pound and Chinese yuan).
This could (and very likely will) lead to the fact all foreign central banks will dump part of their dollars to buy the Chinese currency in the future, thus flooding the currency market with dollars and reducing the purchasing power in the US. This would also mean that the era of cheap borrowing costs would eventually come to an end and lower living standards for Americans saddled with massive public and private sector debt, thus precipitating more and deeper cyclical economic crises. https://reason.com/archives/2012/09/13/occupy-the-fed; http://www.zerohedge.com/news/2015-05-06/usa-manipulating-its-own-currency-important-imf-meeting
3. High structural unemployment in the US and EU is twice the official rate and when combined with underemployment the fulltime working population drops between two-thirds and three fourths. Meanwhile, there has been an assault on labor unions and organized labor in general as much in the US as in Europe. Ever since the Reagan-Thatcher decade of the 1980s, neoliberal policies became prevalent and governments determined that labor rights, especially collective bargaining, impede capital concentration. The so-called US “right-to-work” laws and their versions in other countries that the IMF has been pushing are nothing but another way of driving wages down as low as possible; all of it made possible because government yields to corporate demands. http://useconomy.about.com/od/suppl1/f/real_unemployment_rate.htm; http://www.salon.com/2015/03/25/noam_chomsky_blasts_the_assault_
on_labor_right_to_work_means_right_to_scrounge/
4. Geographic wealth concentration. When the G20 own more than 80% of the world’s wealth and rich countries account for 90% of overall global financial assets – stocks, bank assets and insurance – the rest of the world suffers and helps to contribute to low consumption that accounts for the crisis of overproduction. (Michael Hudson, Super Imperialism: The Origin and Fundamentals of U.S. World Dominance; https://www.gfmag.com/global-data/economic-data/wealth-distribution-income-inequality.
After WWII, the US recognized that its own economy would lapse into recession quickly unless the US helped to strengthen the economies of Europe and Japan, as major trading partners, albeit for geopolitical considerations as well. Although the international political economy of the early 21st century does not resemble that of 1945, disequilibrium on a world scale owing to centralization of capital in the core countries poses a threat to the entire capitalist system. (Mario Baldasari et al. eds.. Global Disequilibrium in the World Economy)
5. IMF austerity policies and the integration patron-client integration models that the US, EU, and Japanhave imposed on the underdeveloped nations have resulted in massive transfer of wealth from the periphery to the core. What the IMF, backed by the World Bank, OECD, the FED and all central banks, calls “structural adjustment” results n essence of wealth transfer from the debtor nations in the periphery – essentially non-Western nations, but also Southern and Eastern Europe – to the core countries. http://richmondvale.org/blog/structural-adjustment-a-major-cause-of-poverty/; http://knowledge.wharton.upenn.edu/article/does-austerity-work-or-does-it-make-things-worse/;
6. Tax havens for corporations and the rich. Corporate and individual money amounting to several trillion dollars (as much as $10 trillion by some estimates) that is sitting in tax havens instead of absorbed back into the economy, and the failure of governments to absorb surplus capital from the private sector to use it to stimulate economic growth and expansion based on a horizontal model of development – benefiting the broader middle and working class. When the top 500 US corporations have sheltered away at least $2 trillion and demand massive tax breaks to repatriate some of that money it is indicative how highly concentrated capital rules over the state. http://america.aljazeera.com/articles/2015/10/6/top-us-companies-keep-21-trillion-in-tax-havens-abroad.html; http://www.huffingtonpost.com/news/offshore-tax-havens/
7. Steadily declining mass consumption across all core countries relying on middle class and working class consumer spending to stimulate growth remains a very serious cause of the cyclical contractions. In the US, consumer spending accounts for 70% of GDP as comparable percentages account for the top 20 richest countries. When the mass consumer suffers downward income pressure, to the degree that some US corporations have decided to raise minimum wages voluntarily, the signs are very clear of a real structural problem in capitalism. The world’s largest retailer WALMART which has just decided to close more than 160 stores, mostly across the south where incomes are low, is the last company to raise wages voluntarily. Although US consumers saved $88 billion in energy in 2015, there was a decline instead of rise in consumer spending when compared with 2014.
Despite a real GDP rise of 2%, sales decline in the US during the fourth quarter of 2015 was -5.3%, indicative that consumers are simply unable to carry any more debt given their income levels. World trade decline in 2015 was the worst since 2009 amid the Great Recession, reflecting a world consumption slump. Ironically, the IMF whose monetarist (austerity policies) are responsible for steadily declining consumption among the middle and working classes lists “low consumption demand” as a root cause for the declining global GDP in its latest revised estimate that I am positive will be revised downward at least once in 2016 possibly twice. http://www.imf.org/external/pubs/ft/weo/2016/update/01/; http://www.ft.com/intl/cms/s/2/fe1df514-4b43-11e5-b558-8a9722977189.html#axzz3xtlGwZsK.
8. Wealth inequality is one-hundred times higher than income inequality, thus signaling a very dire future not just for the US, but the entire western world. Just one month ago, December 2015, the US congress passed legislation providing tax breaks amounting to just over half a trillion going mostly to the rich. This was with the considerable backing of Democrats whose rhetoric is that only Republicans favor tax breaks for the rich. In the EU amid economic contraction and austerity in the last five years the wealthiest 10% have become wealthier, even in the hardest hit countries of Southern and Eastern Europe, thus curbing the consumption power of the middle and working class. According to the PEW Research Center, the US wealth inequality is the highest on record! This does not mean that situation is much better in the EU where inequality is also growing. http://www.pewresearch.org/fact-tank/2014/12/17/wealth-gap-upper-middle-income/; http://reports.weforum.org/outlook-global-agenda-2015/top-10-trends-of-2015/1-deepening-income-inequality/
9. Neoliberal and corporate welfare policies that are parasitic and simply recycle money from the bottom 80% of the population to corporations and the top one percent that own most of the wealth have been at the heart of the contracting cycles that started during the banking crisis of the 1980s and is continuing today. US taxpayers are paying out money to fund everything from sports stadium that millionaires own to subsidizing General Electric that is a very profitable company to providing lucrative contracts by government at all levels to subcontractors for work that is done at a higher cost and less efficiently than it would have at the public sector level. Corporate welfare is not just in the US but all across Europe and it is a policy that the IMF and the World Bank are imposing on governments around the world because it is what the richest are is pushing to maintain their privileged positions. http://thinkbynumbers.org/government-spending/corporate-welfare/corporate-welfare-statistics-vs-social-welfare-statistics/; http://www.theguardian.com/politics/2015/jul/07/corporate-welfare-a-93bn-handshake
10. EU monetarism. Under Germany’s economic and political hegemony, Europe has been pursuing monetarism and imposing austerity on the periphery countries – Southern and Eastern Europe – in the last five years in order to solidify its dominant role in Europe under the patron-client model. This has caused disequilibrium not just in the periphery economies of the EU but across all of Europe against the sanctions imposed on Russia and counter-sanctions by Russia, thus slowing growth down and impacting EU-US and EU-China and Japan economic relations. In short, the Greek crisis mushroomed into a greater crisis because Germany was determined to use austerity as a mechanism for EU hegemony. In an article entitled: ‘The Fourth Reich’: What Some Europeans See When They Look at Germany” argued that: “Following World War II, a German return to dominance in Europe seemed an impossibility. But the euro crisis has transformed the country into a reluctant hegemon and comparisons with the Nazis have become rampant.” http://www.spiegel.de/international/germany/german-power-in-the-age-of-the-euro-crisis-a-1024714.html. European Central Bank president and former Goldman Sachs executive, Mario Draghi has faithfully served Germany largely because the EU multinational corporations benefit from the German model. http://www.socialeurope.eu/2014/09/mario-draghis-policy-ideas-wont-work/
The Pretexts for Global Contraction
There all kinds of excuses and shallow propaganda often by well paid consultants promoting various financial services on why the economy is in its current state of contraction, including the weather is too hot or too cold, thus preventing consumers from spending on winter products and services or conversely staying hope because it is too cold out! The utterly absurd arguments aside, of which there is no shortage especially considering that most people are paid to propagate, the IMF has just released a new report that has revised global DGP growth downward. This includes US growth that Obama, the media and analysts claimed would be robust.
In the 2016 State of the Union address, Obama claimed that it is a myth the US economy has problems as Republicans claim. Nevertheless, the IMF report lists “subdued demand” as a cause for lowering GDP estimates. However, the IMF proposed at Davos in January 2016 that EU simply lower minimum wage laws and labor laws to absorb Muslim migrants. It goes without saying that refugees would work for food and shelter given their desperate condition to flee war-torn Iraq and Syria where the US and its allies created chaos in the first place. The irony here is that he same IMF that lists “low consumption demand” as a cause for the lower than expected global GDP in 2016 and also 2017, is recommending a wage policy that would only worsen the situation. http://www.imf.org/external/pubs/ft/weo/2016/update/01/
One can understand why corporations and governments spend billions trying to convince the public that economic contractions that account for lower living standards and downward socioeconomic mobility has nothing to do with the structural contradictions of capitalism and the policies governments are pursuing favoring the very wealthy. If they were to admit such a thing, then they would have to accept blame and change the political economy to the benefit of the people rather than corporations and the top one percent that own half of the world’s wealth. The only thing left to do is to manufacture excuses and to have well-paid Nobel Prize winners in economics, politicians and journalists manufacture a pretext, to insist on a better neoliberal model and never examine the structural flaws in a decadent system.
1. China is to blame
a. China not growing its GDP at the same double-digit GDP pace as in the previous decade. If this is the case, then does it not reveal the structural weaknesses of the Western economies and their inexorable dependence on China? Besides, is it realistic to expect China to grow at double digit rates without suffering the same cyclical crises given that it is operating within the capitalist world economy?
b. China’s stock market has dragged down the entire world markets. But who drove the values of markets China higher if not speculative foreign investors that expected growth to take place and drive global demand even higher at home and globally? Even under a quasi-statist system, the evolution of the Chinese market followed a pattern of expansion and contraction as all capitalist countries have done historically.
c. Chinese currency (yuan) manipulation by the government intended to increase exports is the problem along with “shadow banking” that conceals the real debt problem of China, thus intensifying capital flight. China actually helped the US and the world economy soften the blow of the Great Recession of 2008 by keeping its currency at such levels and stimulating continued growth amid global contraction. This at a sacrifice to its own population for the sake of securing market share in the future.
d. Chinese government owns slightly more than half of securities, and manipulates the stock market. Therefore, the absence of market freedom is to blame because the quasi-statist policies preclude free markets from reflecting real values in companies. If China did not have a quasi-statist regime, would it have achieved the economic miracle that it has in a country that had no capitalist class? After all, is this not how Japan, Taiwan, and South Korea also developed after 1945? Are analysts so blind to the realities of China’s history, traditions, institutions, and social structure that the stock market is the only focus as though it operates totally separately from the rest of society? Are they so oblivious to China’s internal dynamics everything from huge income gaps and the need to continue transitioning the economy to better serve its own population instead of serving foreign investors? (http://www.wsj.com/articles/a-global-recession-may-be-brewing-in-china-1439764500; http://foreignpolicy.com/2015/08/18/experts-china-global-recession-currency-rmb-yuan-stock-market/; http://www.cnbc.com/2016/01/20/is-china-really-to-blame-for-the-global-sell-off.html; http://www.nakedcapitalism.com/2015/12/capitalism-not-china-is-to-blame-for-the-current-global-economic-decline.html)
2. Energy Glut
Oil and natural gas prices collapsed to levels that forced giant multinational energy corporations to suffer major losses and energy producing countries to see their GDP slashed. While this is true, why did energy prices collapse? In part, this is because of the contracting world economy, especially manufacturing in China, India, and Japan, all suffering contraction. However, the energy market was also deliberately manipulated for political reasons by the Saudi Arabian regime, with the tacit approval of the US and northwest Europe needing cheap energy to punish both Russia and Iran as major energy producers. Now we know that market manipulation coinciding with sluggish energy demand globally has backfired and impacted those doing the manipulation to a greater degree than Iran and Russia that have struggled to diversify their economies.
From June 2014 to January 2016, the price of oil tumbled by 60%, contributing to the uncertainty about energy stability and of course overall downward pressure on all commodities from cacao to natural gas effecting primarily developing nations that depend on commodity exports. As revenues of energy and commodity-producing countries fell sharply, some including Russia and Iran but smaller states like Azerbaijan among them, used revenues to diversify production and become less dependent on imports. Although the overall impact of the energy and commodities slump has entailed lower asset values, this has hardly translated into any kind of a growth stimulus, as many were speculating but now know better. http://www.weforum.org/agenda/2016/01/azerbaijan
The low energy argument hardly explains the current world contraction and market slump because it is high energy prices that invariably contribute to such contraction as they divert spending from other sectors to energy – as has happened historically. Nevertheless, this is the pretext many are using instead of looking at real causes for capitalism’s structural flaws, just as is the inane argument about Iran releasing a few hundred thousand more barrels of oil in the market. The reality is that Greek oil tankers were already transporting Iranian oil illegally for years to areas that supposedly had sanctions on Iran. http://www.mcclatchydc.com/news/politics-government/article24746689.html; A. H. Cordesman et al.The Gulf and the Military Balance)
3. FED Rates
FED raised rates too quickly and should have waited because this precipitated a negative investor psychology considering companies were used to rates close to zero that allowed them to borrow at practically no cost. FED was slow in raising rates so that market psychology was confused and took this as a signal things were not going as well regarding real unemployment and GDP growth. The FED has been manipulating the currency to the advantage of Wall Street since the 1930s and it follows what Wall Street dictates. If the FED was interested in helping the average American, it would have an inflationary monetary policy, something that would of course entail low dollar value given that the US public debt is about equal to GDP. http://www.cnbc.com/2015/06/03/federal-reserve-policy-helping-rich-get-richer-blackrock-pro-rick-rieder.html; Anthony Sutton, The Federal Reserve Conspiracy, 2014; Stephen Lendman, How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War, 2011)
4. Presidential Election Jitters: Will Wall Street Have its Favorite?
The presidential race is not going as well as the billionaires funding the Republican campaigns and Hillary Clinton wanted. The chaos in the Republican camp with Bush marginalized and Sanders doing as well as he is brings into question of how well the wealthy control the candidates that they hand to the voters for their final approval. No matter who wins, the capitalist system will remain exactly as it is today, but that is not enough for the billionaires that demand even greater concessions. The reason for the market slump is that investors fear Donald Trump winning and proposing measures that curtail some of the manipulation of Wall Street as he has stated publicly.
The billionaire Koch brothers who own as much wealth as about 20% of the US population, have stated they are adamantly against Trump because of possible tighter market regulations. http://theweek.com/speedreads/587257/donald-trump-reportedly-tried-woo-koch-brothers-sheldon-adelson-turned-down; At the Davos meeting where the world’s most powerful businesspeople and political figures are meeting, the international elites are just as alarmed about Trump as the Koch brothers. “Unbelievable”, “embarrassing” even “dangerous” are some of the words the financial elite gathered at the World Economic Forum conference in the Swiss resort of Davos have been using to describe U.S. Republican presidential frontrunner Donald Trump.” http://finance.yahoo.com/news/davos-elite-alarmed-prospect-nominee-trump-185041216.html. In the last analysis, Trump is a billionaire who will faithfully follow Wall Street as every president has done in US history.
Bernie Sanders is the other pretext along with Trump for Wall Street contraction. Bernie Sanders as a self-proclaimed Socialist-Democrat that many on Wall Street adamantly oppose. While it is true that he is outspoken against the neoliberal political economy and dilution of the social safety net, when one looks at his votes in the senate and his policy positions on fiscal, monetary, trade, investment and labor policy it is clear he is interested in restoring some modicum of Keynesianism that neoliberals have eliminated. Ending some of the pork barrel corporate welfare measures, fiscal advantages to the rich, strengthening banking regulation, criminalizing corporate crimes are some of the proposals he has put on the table.
Contrary to CEOs fears, Sanders who admittedly opposes “cannibal capitalism” (a term coined by Eugene Debs) has proved that he works within the system he wishes to reform on some new version of neo-Keynesian model but realizes it is almost impossible. Even if he wins the presidency, which is highly unlikely, Sanders will fall into the Obama mold and cater to Wall Street with only modest policy changes to strengthen the social safety net. The last time the US reformed its political economy to save it from catastrophe was under FDR in the 1930s who acted out of necessity. The US is not yet in the kind of crisis it experienced in the 1930s and Bernie Sanders is not FDR. http://www.truth-out.org/news/item/34314-ten-powerful-reasons-why-bernie-scares-wall-street
5. The BRICS and Non-Western Economies Contracting
The fault rests with the countries in the BRICS group (Brazil, Russia, India, China and South Africa) and other developing nations. In short, China and the emerging markets are unable to absorb the surplus that the US, EU, Japan, Canada and Australia are producing therefore it is the fault of the BRICS and emerging market economies for causing problems in the G-7. Never mind that the global recession of 2008 started in the US and spread to core countries and then to the rest of the world, taking it down with them. Nor does it matter that US and its EU partners made matter worse by advocating austerity within the European periphery and in many countries outside of Europe at the same time they imposed sanctions on Russia that have only backfired to contribute to Western contraction.
Is it any wonder that instead of slashing defense spending after 2008 and keeping it at low levels, the US demanded that NATO spending increase to maintain an effective containment policy on Russia, policies that have diverted capital from the civilian economy in the US and all across Europe, as well as Japan, Taiwan, and South Korea. When bankrupt Greece asked permission from the EU and Germany to cut defense because it had cut just about everything else under austerity since 2010, the answer was that would defense cuts impact contracts with German and French manufacturers. In short, cut mass consumption and reduce living standards that the IMF and monetarists advocate but not defense.
Because of the US wars in Iraq and Afghanistan, the public debt rose substantially and the average homeowner paid $600 more in mortgage interest by 2008 when the recession hit. Deficit spending is one thing when resources are devoted to productive projects for the civilian economy and to the benefit of people, and entirely another when devoted to the parasitic defense industry. While the media, politicians and pundits in the US and the West defend raising defense spending, they bitterly criticize Russia for doing the same in response to NATO encirclement policy. Oddly enough, the neoliberals in the West defending defense spending argue that in Russia’s case it weakens the civilian economy!
http://watson.brown.edu/costsofwar/costs/economic/economy/macroeconomic; https://news.vice.com/article/russias-economy-is-a-mess-and-its-problems-arent-going-away
It is just as important to mention that the US and UK have been manipulating their currencies to the detriment of the emerging economies. For example, India has recently decided to trade with Iran solely on their currencies and to leave out reserve currencies euro and dollar. Having to pay debt and balance of payments in dollars or in UK British pound that are highly inflated is hardly in the interest of countries trying to enjoy monetary and economic sovereignty. It only stands to reason that both trading partners derive benefits from trade transactions in their own currencies just as it stands to reason that they along with many emerging economies see the dollar and other reserve currencies as obstacles to their growth because it imposes underlying monetarism on their countries. In October 2015, the IMF predicted a global US dollar recession, as more countries abandon it and begin to consider alternatives, including the yuan that the IMF accepted as a hard currency. The decline of the dollar is the result of US policies, not the fault of Brazil and India or other emerging economies. http://www.ft.com/intl/cms/s/3/d86944c0-6d14-11e5-aca9-d87542bf8673.html#axzz3xtlGwZsK; Barry Eichengreen, Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System, 2012)
Conclusion: Solutions to the Crisis of Capitalism
What solutions do mainstream economists, politicians, businesspeople, pundits and media, offer for the cyclical crises of capitalism? These are same solutions they have offered since the beginning of the Industrial Revolution when Adam Smith wrote the Wealth of Nations. Increase market share domestically and globally, innovate to lower production costs, lower taxes on business and the wealthy, less regulation of business, more flexible labor laws more government support for business – everything from exporting products abroad to pursuing a monetary policy that allows for low interest rates and liquidity and providing incentives for research and development, and lower spending on any social programs.
Even if every single one of these were to work out as ideally in the real economy as its advocates wish, the question remains how it is possible for the mass consumer to stimulate the economy when income and personal debt determine consumption power. No matter how great and how less expensive the smart phone may be, where is the consumer base once the market is saturated on a global scale? How much more debt should the mass consumer carry so that more products and services are consumed before we have a major consumer debt crisis analogous to the student debt crisis in the US about to explode even with US government guaranteeing such debt currently at $1.3 trillion in an $18 trillion economy? US average total debt is at $130,000 or $12 trillion total representing two-thirds of GDP, while US average income is just $52,000. When we consider that public debt resulting in higher taxes for the mass consumer, and consumer debt, the combination of the two necessarily contributes to cyclical crises as scholarly studies on this issue have demonstrated.
(http://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/; Carmen M. Reinhart and Kenneth Roggof, This Time Is Different: Eight Centuries of Financial Folly, 2011; R. Z Aliber and Charles Kindleberger, Manias, Panics and Crashes: A History of Financial Crises, 2011)
The economy has not escaped cyclical contractions and periodically very deep ones, even under a policy mix that includes Keynesian measures. Yet, there is not a single mainstream economist or bourgeois politician who would dare to address the core issue of the problem that is the wealth and income inequality issue. Of course, some of the reformists in the Keynesian school argue in favor of strengthening the social fabric in conjunction with the saving of capitalism by providing a better safety net for the middle and lower classes to secure a democratic society. Under the neoliberal political economy that has prevailed since the 1980s, even those politicians who claim to support some degree of Keynesian policies have not dared to put them into policy and use the rhetoric to win elections and nothing more; France, Spain, Portugal and Greece serve as good examples of politicians running on a Keynesian agenda but governing as neo-liberals. Even the nationalist regimes in Latin America that invoked Keynesianism – Venezuela, Argentina, Bolivia, Peru and Ecuador – catered as much to the nationalist capitalist class as to the comprador bourgeoisie and foreign capital. Embracing the neoliberal path is a manifestation of market hegemony over the state, thus forcing politicians, businesspeople, economists, journalists, and commentators to manufacture myths about disequilibrium in the economy and chronic downward socioeconomic mobility.
There is no reason to look for scapegoats in the economy, no reason to create fictitious forces or policies that brought us to the reality of Bill Gates, Warren Buffett and the Koch brothers owning more wealth than 127 million Americans. There is no reason to constantly evade and avoid the bitter truth about the inescapable crash of the markets that most likely will come in a decade perhaps in the 2030s on the 100th anniversary of the Great Depression. When the culture of the Western world, now a global culture that reaches from Mongolia to Mozambique, celebrates the millionaire and billionaire as society’s hero instead of villain who destroys society, while marginalizing those who work and create, why is anyone surprised that the sharp market decline of January 2016 amounting to more than $8 trillion in losses is but a small signal of a crash that is inevitable probably toward the end of the next decade or early 2030s.
Jon Kofas is a retired university Professor from Indiana University.
25 January, 2016
Countercurrents.org