Fourteen Points On World Economy As US GDP Drops .7 Percent
So, while it generally takes two quarters for a recession to be so-called, it may be that the recession is here.
Let us recap the non-recessionary period:
- The percentage of people employed in the US never recovered;
- More than the total amount of growth went to the top four percent or so, with most of that going to the top one percent and most of that going to the top .1 percent;
- The stock market had a huge bull market, even though the economy wasn’t working for anyone but the top few;
- Outside America, the “south” of Europe never recovered in any meaningful way, and most European nations generally did badly for most of their citizens;
- Various resource nations did well for a time, but their success was based on demand from developed nations or, more commonly, from China;
- Chinese demand collapsed some time ago;
- China has been printing more money than either Japan or the US; much more;
- Japan’s “unconventional monetary policy” has been a roaring failure–if its intention was to get the Japanese economy going again;
- The collapse in oil prices last year helped the US briefly, but because the rest of the world has rolled off a cliff and because those gains couldn’t go widespread, it was only briefly (this is as I predicted at the time);
- Canada’s economy was hurt badly by the oil price crash, and because the mixed economy has been critically injured, there is very little else to hold up the economy;
- Both Britain (or London…almost the same thing) and Canada have huge housing bubbles, and those bubbles, with the addition of financial games, are all that holds those economies together at this point;
- Britain never actually recovered either, for the majority of its citizens–just a large enough minority to elect Cameron;
- Australia has tied itself massively to resource extraction on the back of Chinese demand. There is no meaningful Australian economy whose fate is not tied to China.
- India’s development is hollow neo-liberalism, and has seen an actual decrease in per capita calories. It is consumptive and limited to a few key areas.
Let me put this another way: The developed world is in depression. It has been in depression since 2007. It never left depression. Within that depression, there is still a business cycle: There are expansions, and recessions, and so on. Better times and worse times.
While cheap solar is a big deal, it is not yet deployed sufficiently to break the “widespread demand will crash the economy through oil price increases” problem, and this is exacerbated the by the deadlock rich elites have on most of the world’s politics and economic policies, since it is not in their interest to solve problems, but only to become more rich. Not that solving problems is something they mind, if it makes them richer and keeps everyone else poor.
The world still has very few problems we couldn’t solve if we acted on them in a productive way (though some, like climate change and the great die-off, are beyond the point of no return for catastrophic damage), but that’s largely irrelevant while public policy remains in the hands of oligarchs. There is some reason for hope, as left-wing parties rise in Europe, but those green shoots are still nothing but green shoots.
I suggest that my readers who are able to make money do so now, you may soon find that you can’t. This is especially important if your employment is precarious. Take care of yourselves, and take care of each other, unless you are lucky enough to live in the few rich, social democratic states left, you cannot expect much aid from your governments.