We are at the crossroads of the most serious economic crisis in world history. The economic crisis has by no means reached its climax, as some economists have predicted. The crisis is deepening, with the risk of seriously disrupting the structures of international trade and investment.
What is distinct in this particular phase of the crisis is the ability of the financial giants –through stock market manipulation as well as through their overriding control over credit – not only to create havoc in the production of goods and services, but also to undermine and destroy large and well established business corporations.
This crisis is far more serious than the Great Depression. All major sectors of the global economy are affected. Factories are closed down. Assembly lines are at a standstill. Unemployment is rampant. Wages have collapsed. Entire populations are precipitated into abysmal poverty. Livelihoods are destroyed. Public services are disrupted or privatized. The repercussions on people’s lives in North America and around the world are dramatic….
America is dying. It is self-destructing and bringing the rest of the world down with it.
It all began in the early part of the 20th century. In 1907, J.P. Morgan, a private New York banker, published a rumor that a competing unnamed large bank was about to fail. It was a false charge but customers nonetheless raced to their banks to withdraw their money, in case it was their bank. As they pulled out their funds, the banks lost their cash deposits and were forced to call in their loans. People therefore had to pay back their mortgages to fill the banks with income, going bankrupt in the process. The 1907 panic resulted in a crash that prompted the creation of the Federal Reserve, a private banking cartel with the veneer of an independent government organization. Effectively, it was a coup by elite bankers in order to control the industry….
Much attention has rightly been paid to the techniques whereby mortgages were packaged together and then sliced and diced and sold to institutional investors around the world. Outright fraud may also have been involved in some of the financial shenanigans. The falling home values following the bursting of the housing bubble and the inability of many sub-prime mortgage holders to continue to make their monthly payments, together with the resulting foreclosures, was certainly the straw that broke the camel’s back, leading to this catastrophic system failure…. A world depression, in which upward of a quarter of the world’s labor force will be unemployed, is looming. The biggest decline in trade in recent world history defines the future. The immanent bankruptcies of the biggest manufacturing companies in the capitalist world haunt Western political leaders. The “market” as a mechanism for allocating resources and the government of the U.S. as the “leader” of the global economy have been discredited.
All the assumptions about “self-stabilizing markets” are demonstrably false and outmoded. The rejection of public intervention in the market and the advocacy of supply-side economics have been discredited even in the eyes of their practitioners.
Among almost all conventional economists, pundits, investment advisors and various and sundry experts and economic historians, there is a common faith that in the long-run, the stock market will recover, the recession will end and the government will withdraw from the economy. Fixed on notions of past cyclical patterns and historical trends, these analysts lose sight of the present realities which have no precedent: the world nature of the economic depression, the unprecedented speed of the fall, and the levels of debt incurred by governments to sustain insolvent banks and industries and the unprecedented public deficits, which will drain resources for many generations to come….