The media is reporting on the increasing risk of recession, based on Wall Street predictions. Or should I say manipulations?
By saying “recession” or “slowdown”, they are miscalculating at best, misrepresenting conditions at worst.
“Recession” is an interesting word. There is no universal definition as to what economic conditions constitute a recession or what constitutes a depression. Talk to different economists and you will get different criteria. None of those definitions establish complete collapse of an economy. They will use the term, “economic crisis”, even when that “crisis” lasts for years. Look at the conditions in Greece. Look at the conditions in Venezuela. In both of those countries, the economic conditions have basically been inflicted on those countries. For Greece, the conditions were imposed by creditors. For Venezuela, the conditions have been caused by US sanctions and seizure of assets.
Stock market decline. On 8/23/19 the DOW was down by over 600 points again. Which means we are quickly approaching a drop of 2000 points in less than three months. While the general economy has been suffering for years, the stock market, meaning rich investors, has been riding high through it all. We have been hearing how well the economy is doing but when you talk to real people on the street you hear a far different story.
Media complicity. With the 2020 election coming up, the media who touted the strength of the economy has changed their tune drastically. Now corporate economists are all getting on one page, stating a recession is eminent. A recession has been eminent for years, they just haven’t told you so. They haven’t told you so because they are complicit in the conditions which are leading us into a recession/depression/collapse. If they told you it was coming, they would lose advertising from financial firms. Where economics are concerned, most Americans do not want to hear the truth. They want to hear what makes them feel secure, safe, happy, superior to their neighbors and other countries.
What the media doesn’t say. Of course, most of the media are run by neoliberal oligarchs. They oppose Trump, yet have wanted to capitalize as much as they could from his tax cuts and reduction of the interest rate. Now they have received their tax cuts, further interest rate cuts are not promised and will not amount to much if they happen. Thus, at this point they feel confident in attacking Trump and claiming a recession is going to happen if the current trade war continues. They neglect to tell you the recession/recession/collapse will occur even if the trade war completely stopped right this minute.
That neglect is fully intentional. The timing of the gradual revelation of the economy receding is intentional. Had they previously mentioned the economy weakening, you would have seen exactly what we are seeing right now and will see accelerating rapidly, which corporate media is literally instigating- for people to withhold money from savings and reduce spending. This accelerates the process of economic slowdown. If this had happened in 2017 or even 2018 the slowdown would have occurred much sooner than now. Which would mean that much of the blame could have been laid at the feet of the Obama administration.
Diverting your focus. Much of the blame does fall on the Obama administration. However there are more things to consider. Any earlier revelation would have meant that the GOP tax cut would not have occurred. Increases in defense spending would have either not happened or would have been far less. The focus of media reporting would have had to center on the economy, rather than Russiagate. Have you even noticed that the media focus has so suddenly shifted to the economy and racism now that Russiagate is effectively over? It’s not like anything has drastically changed economically or socially since Mueller testified before CONgress. The exact same things are happening. The only thing that has changed is how the media reports on it.
It’s not the tariffs. The media has built up the rhetoric claiming the economy was doing well and even expanding while manufacturing declined and we have seen record numbers of retail closures. We have seen mass layoffs and the Labor Participation Rate has dropped severely. Student loan defaults hit a record high in 2018. Vehicle sales have been down for years, which led to layoffs in the auto industry. It had nothing to do with tariffs. If the economy were truly doing well, tariffs would cause some inflation but virtually nothing else. So tariffs are not helping but they are nothing but an excuse.
What is the goal? To understand what the goal is, one need do nothing more than look back to 2008/2009. How did Obama deal with the recession? He bailed out the auto industry and the big banks using taxpayer money. That’s what Wall Street is counting on again. They got their tax break, interest can’t go much lower than it is now. Republican and Democratic administrations deal with economic recessions differently. Republicans cut taxes on the rich, using trickle-down economics as a rationale in spite of two decades of Reaganomics proving it false. Democrats bail out the same entities who got the tax breaks. Republicans are also likely to reduce social support programs, while Democrats increase spending on those programs. So the goal is to repeat this process. Allow or even force the crash to occur, then expect to be bailed out. You pay, they collect.
No social spending increase would be enough. In distant history, the increases in social support by Democrats was much greater than in recent years. By 2021, any increase would have to be truly massive if it had any chance of recovering the economy. No increases in social support spending which will be suggested at this point and by the current parties will be sufficient to recover from where we are heading this minute. The national debt is already so high that it would be unrealistic to even expect social spending increases which could have an effective impact.
Wars and past recoveries. There are other factors involved in economic recovery in this capitalist system. Those factors no longer exist nor can they exist. Past recoveries from major economic downturns were coupled with major wars. Those wars allowed for the forced expansion of US markets into other countries. There are no more countries for the US to expand into any more. It doesn’t matter what we manufacture when there is no market for the goods produced. It will not be possible to destroy the manufacturing capacity of China, Russia, India, Mexico and other countries without doing so much damage as to make the planet uninhabitable. So they will remain competitors on global trade. Threats against allies no longer work, as those allies each benefit from global trade and the lower prices brought by competition.
Automation. Increasing production capacity no longer means creating jobs when too much of the work is done by robots and automated systems. I’ve written about automation many times but the concept is simple. Automation does not create jobs, it eliminates jobs. That’s the whole point of automation. It reduces cost of production by the process of eliminating incomes, so fewer people can afford even the lower prices. Past technological advances nearly all created or were incorporated in the creation and expansion of new industries. In the past 20 years or more, what we have witnessed is the automation of existing industries. There have not been any actual new industries since the dawn of the internet and social media.
Major miscalculation. Other than being bailed out, there cannot be any goal in the revelation that the economy is declining. Ultimately, the rationale involved is the concentration of wealth into even fewer hands than what we see now. However, what they are not taking into account is the actual collapse of the economy. This is something we can see coming under current conditions. The decline of the economy is not just national, it is global. Reduction in income have led to reductions in consumer spending (retail decline) in nearly every country. That results in decreased production, which means reduced freight. Reduced income and spending means less taxation. At every level more jobs are lost.
Decades in the making. Right now we cannot prevent what is coming. It has been decades in the making. When it finally does happen it will appear to be sudden but anyone who has paid attention has been able to see it coming for at least the last decade. Not only is it eminent, it is intentional, hence the gradual concentration of wealth and reduction of rights. Both major parties are complicit while blaming one another. Keep in mind it was a Democratic majority under Obama that bailed out the banks, indicted not one person, enacted a corporate welfare program for health insurance and made the GWB tax cuts for the rich permanent. Both sides increase “defense” spending every year. Both sides approved the Trump tax cut for the rich. Both sides voted to suspend the debt ceiling until July 2021. Republicans cut social spending, Democrats restore a fraction of that spending, moving ever further to the right. One step forward, three steps back in a continual dance theater performance.
What they do not count on. While the rich are counting on the concentration of wealth, what they do not take into account is the ultimate response. We have seen revolutions in world history where the oppressed masses rose up to seize the accumulated wealth of the elite. This is becoming a very real scenario under the circumstances forming right now. They may have the idea of creating a global modern form of feudal system, which is what exists to a degree right now.
However, even as we bemoan educational standards, we now live in a world with the highest level of education in world history. We also have the best communications in world history. That combination of factors make today far different than any time in the past where large masses were oppressed. We, the people, have more advantages in our capacity to fight back than at any point in history. We don’t need violence and that would be counter-productive. We can turn off corporate media completely. We can call and write elected officials and media, tell them they do not represent our views. Boycott support for candidates who take corporate money. We can pull money out of corporate investments and buy precious metals.
Most of all, we can talk to each other. Stop attacking one another and instead talk about issues. Leave names out of the discussion unless it involves policies. Stop closing our eyes, ears and minds to the flaws in candidates. Stop making excuses. Stop voting AGAINST and know what we vote FOR. Our unity is what is feared most by the oligarchy.