33 Million Jobless — What ‘Economic Recovery’?

No matter how the Obama administration or the bosses’ media pundits try to spin the “economic recovery,” the actual 33 million jobless figure keeps getting in the way. Now even some of the NY Times analysts have taken to confirming what Karl Marx proved over a century ago: capitalism inevitably breeds unemployment. And capitalism based on racism breeds double unemployment rates for black and Latino workers.

As CHALLENGE has reported previously, the “official” U.S. jobless rate hovering around 10% represents 15 million unemployed. The latest headlines scream a June “drop” to 9.5% (a phony figure — see next paragraph). But the actual rate — including part-timers who can’t find full-time jobs and “discouraged” workers who have given up looking — jumps to 21.6%, more than double the “official” figure. (Shadowstats.com, Commentary #301).

And the “discouraged” workers are only counted as “discouraged” if they’ve stopped looking for up to six months. But millions have been out of work over a year and therefore are completely off the radar screen. All this doesn’t even count the workers on welfare who would work if there were jobs and available day-care.

Statistical Juggling

The government’s “official” unemployment rate for June “drops” to 9.5% because it is based on the Payroll Survey that counts the number of jobs — not the number of people with jobs — and therefore includes multiple job holders. The government’s own “Household Survey” counts the number of people with jobs which showed a June job contraction of 301,000! So how can the jobless rate “drop” to 9.5% when the number of people without jobs increases? Only by statistical juggling.

An Associated Press dispatch (6/19) ran under a NY Times headline, “Most State Jobless Rates Fall.” But right there in the first paragraph it reports: “mainly because people gave up looking for work and were no longer counted.” (Maybe the headline writer didn’t read the article.)

Meanwhile, the bosses’ Congress can’t even pass legislation extending unemployment checks for the 1.8 million whose benefits expired in the last two months — although they can “preserve a tax loophole benefitting the wealthy money managers at private equity firms” (NY Times editorial, 6/30). This gift-wraps tens of millions of dollars for these parasites who helped bring on the financial crisis in the first place.

None of these “analyses” of the jobless figures even mention the fact that at least 40% of the jobless are excluded altogether from unemployment benefits because of government restrictions. Many of them admit that millions of those currently out of work may never work again. That’s “democracy” under the profit system.

Yes, Marx Was Right!

Now along come some of these columnists writing about the economy to prove Marx was right. Marx said that because every capitalist drives for maximum profits, looking to capture as much of the market as possible, it inevitably leads to overproduction of the means of production and of goods: all of them can’t sell what their workers produced. So to try to maintain their very existence, many of them close factories and lay off workers, who can’t buy back what they’ve produced, leading to more closures and still more layoffs. That’s known as the “bust” in capitalism’s business cycle.

NY Times business writer Andrew Sorkin, in maintaining that no amount of financial “regulations” can stop this “bust,” says: “Businesses in general, and Wall Street in particular, often overreach in search of profits….We haven’t found a way to legislate around that reality.” (NYT, 6/29)

That reality means millions lose their jobs, their savings, their homes and their health insurance. And because of racist discrimination, doubly so for black and Latino workers.

Furthermore, this is an international phenomenon since capitalism covers the planet. So workers are facing this crisis in Greece, Spain (jobless rate 20%), Portugal, Ireland and Eastern Europe, among others, with France, England and Germany not far behind.

Meanwhile, imperialism — capitalists extending their search for maximum profits to low-wage areas in Asia, Africa and Latin America — reduces hundreds of millions of workers to permanent poverty, with several billion trying to live on less than $2 a day. This, of course, leads to imperialist wars as the only way these rival capitalists ultimately can settle who will have the “right” to exploit the most workers.

Sorkin faces the facts of capitalism. His article is headlined, “Preparing For Next Big One,” stating, “The next Great Crash is coming. Guaranteed….[and] sooner than we think.

“How can I be so sure? Because the history of modern markets is a story of meltdowns.”

He then details the blow-ups in the U.S., Mexico, East Asia, Russia and the dot-com bombs — all in just the last 20 years. Every one of these produced mass layoffs for workers. Then he catalogues “The stagflation of the 1970s, the Depression of the 1930s, the panics in the 1900s…and back and back and back…all the way to the Dutch and their tulip bulbs.”

“Booms go bust. That’s the way markets work….[And] the one thing it [the Obama financial reform Act] won’t do is prevent another crisis….”

He concludes that this Act may help “prepare us for the next Big One….But it won’t stop it.”

There’s only one thing that can stop it — communist revolution, because it destroys the profit system and the capitalist state apparatus that enforces it. Communism is a society run by and for the working class which, after all, is the class that produces all the value in capitalist society. But in a profit-free society our class will allocate all that we produce according to workers’ needs. That’s the real “Next Big One.”