Unemployment Crisis Quotes

Thirty years of "crisis," mass unemployment, and flagging growth, and they still want us to believe in the economy. . . . We have to see that the economy is itself the crisis.

And if your son is unemployed? Three out of four women say they would not date an unemployed man. In contrast, for two-thirds of men, dating an unemployed woman is a nonissue.

And what if Britain lost? There would be a financial crisis, unemployment, and destitution. Working-class men would take up Ethel’s father’s cry and say that they had never been allowed to vote for the war. The people’s rage against their rulers would be boundless.

The impoverished families of the long-term unemployed strained to the point of dysfunction, communities deprived of viable economies, interrupted educations, lost skills: these and many more results of capitalism’s crisis will put difficult demands on governments for years. On the one hand, they will aggravate social problems that impose costs on governments.

Protectionism, such as what U.S. president Donald Trump was attempting, amounts in effect under these circumstances (that is, in the absence of any significant expansion of state expenditure financed either by a fiscal deficit or by taxes on capitalists) to an export of unemployment to other countries. It can work only if the other countries do not retaliate. If they do, then it gives rise to a competitive “beggar-thy-neighbor” policy that only worsens the crisis by creating further uncertainties and reducing investments further.

As Jeffrey Reiman points out in the Rich Get Richer and the Poor Get Prison, the criminal justice system excuses and ignores crimes of the rich that produce profound social harms while intensely criminalizing the behaviors of the poor and nonwhite, including those behaviors that produce few social harms. When the crimes of the rich are dealt with, it’s generally through administrative controls and civil enforcement rather than aggressive policing, criminal prosecution, and incarceration, which are reserved largely for the poor and nonwhite. No bankers have been jailed for the 2008 financial crisis despite widespread fraud and the looting of the American economy, which resulted in mass unemployment, homelessness, and economic dislocation.

It is one thing when prices drift downward over time due to innovation, scalability or other efficiencies. This might be considered “good” deflation and is familiar to any contemporary consumer who has seen prices of computers or wide-screen TVs fall year after year. It is another matter when prices are forced down by unnecessary monetary contraction, credit constraints, deleveraging, business failures, bankruptcies and mass unemployment. This may be considered “bad” deflation. This bad deflation was exactly what was required in order to return the most important currencies to their prewar parity with gold.

Printing dollars at home means higher inflation in China, higher food prices in Egypt and stock bubbles in Brazil. Printing money means that U.S. debt is devalued so foreign creditors get paid back in cheaper dollars. The devaluation means higher unemployment in developing economies as their exports become more expensive for Americans. The resulting inflation also means higher prices for inputs needed in developing economies like copper, corn, oil and wheat. Foreign countries have begun to fight back against U.S.-caused inflation through subsidies, tariffs and capital controls; the currency war is expanding fast.

Good reputation is a lifeboat in the flood of life crisis.

Moreover, the fact that more than a third of the electorate voted Nazi in 1932 was a hugely significant factor in the Republic’s fall and in the rise of Hitler. But most of those voters were not motivated by a broad discontent with the Republic, including with its sexual politics, as some studies have asserted.54 Rather, voters were radicalized, driven to the extreme parties, and drawn to the polls by specific issues, such as the economic crisis, the fear of communism, and the trauma of unemployment.55

The first big step is to repair the safety net so that workers and families are no longer at perpetual risk of falling through and drowning, as millions have in the pandemic. This means essentially extending the New Deal to more Americans in more areas of their lives: universal health care, child care, paid family and sick leave, stronger workplace safety protections, unemployment insurance that doesn’t fail in a crisis, a living minimum wage. These are the basis for any decent life, for any American to do more than survive just below the misery line.

The murder rate in Greece is low. So low that a lot of people wonder how it’s possible in a crisis-ridden country with high unemployment, corruption and social unrest. The smart answer is that rather than kill someone they hate, Greeks allow the victim to go on living in Greece.

The "what to do?" is always the wrong question. And this society is always asking what to do about this or what to do about racism or what to do about bullying, what to do about terrorism or what to do about economic crisis, what to do about unemployment. That's not the important question. The important question is always "why?" Why is something happening, what is actually going on. And without asking that question, without pausing, without you looking and see what is giving rise to any particular phenomena, we're never gonna get the right answers. And that "why" is largely missing.

Overall, the American Millennial demographic group falls into two categories. The first match the stereotype of entitlement and laziness and taking an extended adolescence between college and entering the workforce. The second . . . got screwed: they attempted to be adults, but got sideswiped by the combination of Boomers squeezing them out of the workforce, and the mass unemployment triggered by the 2007–09 financial crisis. Regardless of bucket, the Millennials lost years of meaningful work experience, and today are the least skilled of any equivalent age cohort in modern American history

As in Northern Ireland, children, shoppers, ordinary working men were all suitable targets. Bombs in department stores and pubs would have even more impact in the context of the widely anticipated social breakdown brought on by industrial decline, high unemployment, rising inflation and an energy crisis.

The general economic growth of the quarter of a century that followed World War II not surprisingly created many illusions. In the West, people thought that they had found in Keynesianism the definitive solution to the problem of crises and unemployment. It was thus thought that the world had entered into an era of perpetual prosperity and definitive mastery of the business cycle. In the socialist world, it was also thought that the model formula for even higher growth had been discovered which enabled Khruschev to announce victoriously that by 1980 the USSR would have overtaken the united States "in every domain." In the third world of Africa and Asia, the national liberation movements which had seized political independence, also had a battery of prescriptions which, in a mix of capitalist and socialist recipes, in doses that varied from case to case, would enable these movements to overcome "underdevelopment" in "interdependence.

Under capitalism, labour is a commodity that is bought and sold on the labour market, and workers are consequently exposed without defence to the dangers of this market—poverty, sickness, old age and unemployment. The welfare state succeeded in limiting the degree to which labour has this commodity character; it is a ‘de-commodifying’ institution, since it socializes the aforementioned risks.

But why are we always the ones who have to suffer?” she cried out in indignation. “Us and people like us? Ordinary people, the lower middle classes. If war is declared or the franc devalues, if there’s unemployment or a revolution, or any sort of crisis, the others manage to get through all right. We’re always the ones who are trampled! Why? What did we do? We’re paying for everybody else’s mistakes. Of course they’re not afraid of us. The workers fight back, the rich are powerful. We’re just sheep to the slaughter. I want to know why!

Persuading people they have more power than they do and ignoring the very real social barriers to attainment primes them for self-blame when reality fails to deliver. The worst extremes of phoney empowerment, argues Frayne, can be found in the trite aphorisms of the self-help industry, where popular psychologists ascribe to us almost magical abilities to alter circumstances despite the harsh realities constraining us. In a world where problems like disadvantage, unemployment and work-related distress are so socially embedded, downplaying the very real obstacles to opportunity is regularly experienced as yet another form of punishment, yet another form of blaming and shaming the individual.

At all times it is a bewildering thing to the poor weaver to see his employer removing from house to house, each one grander than the last, till he ends in building one more magnificent than all, or withdraws his money from the concern, or sells his mill, to buy an estate in the country, while all the time the weaver, who thinks he and his fellows are the real makers of this wealth, is struggling on for bread for his children, through the vicissitudes of lowered wages, short hours, fewer hands employed, etc. And when he knows trade is bad, and could understand (at least partially) that there are not buyers enough in the market to purchase the goods already made, and consequently that there is no demand for more; when he would bear and endure much without complaining, could he also see that his employers were bearing their share; he is, I say, bewildered and (to use his own word) "aggravated" to see that all goes on just as usual with the millowners. Large houses are still occupied, while spinners' and weavers' cottages stand empty, because the families that once filled them are obliged to live in rooms or cellars. Carriages still roll along the streets, concerts are still crowded by subscribers, the shops for expensive luxuries still find daily customers, while the workman loiters away his unemployed time in watching these things, and thinking of the pale, uncomplaining wife at home, and the wailing children asking in vain for enough of food--of the sinking health, of the dying life of those near and dear to him. The contrast is too great. Why should he alone suffer from bad times?

Psycho-compulsion is therefore not just about instilling people with a so-called correct employability mindset. It is a mechanism for penalising deviation from what it defines as the right set of attitudes and behaviours. ‘What psycho-compulsion therefore attempts to do is silence alternative discourses to the neoliberal myth that you are to blame for your unemployment,’ said Friedli. ‘At the same time, it undermines and erodes alternative frameworks around which people can come together in solidarity to act against the social causes of worklessness.’ In short, psycho-compulsion not only pathologises and punishes a claimant’s dissent, it depoliticises the causes of joblessness (which discourages collective action), and it does so by resuscitating Margaret Thatcher’s earlier myth that unemployment can be reduced to character deficiencies.

International economic integration generally expands economic opportunities and is good for society. The great alternatives to economic integration failed. Attempts to seal countries off from the rest of the world economy in the 1930s were ultimately disastrous. Germany, Italy, and Japan closed their economies and also turned toward dictatorship, war, and conquest. The poor countries and former colonies that created closed economies in the 1930s and 1940s collapsed into economic stagnation, social unrest, crisis, and military dictatorships in the 1970s and 1980s. Few countries have achieved economic progress without access to the international economy. But an insistence on globalization at all cost is equally misguided. During the golden age of global capitalism before 1914, governments committed themselves to international economic integration and little else. Supporters of free trade, the gold standard, and international finance wanted governments to limit themselves to safeguarding these policies and their properties. But these governments ignored the concerns of many harmed by globalization. As the working and middle classes grew, so did their demands for social reforms to improve the lot of the unemployed, the poor, children, and the elderly. The clash between classical orthodoxy and these new social movements turned into bitter, often violent, conflicts, especially once the Depression hit. Attempts to maintain global capitalism without addressing those ill treated by world markets drove societies toward polarization and conflict.

The intellectual justification for transphobia on the left is usually framed as concern about a mythological 'trans ideology', which is individualist, bourgeois and unconcerned with class struggle. As we've seen, however, the majority of trans people are working class, and the oppression of trans people is specifically rooted in capitalism. In short, capitalism across the world still relies heavily on the idea of different categories of men's work and women's work, in which "women's work" (such as housework, child-rearing, and emotional labour) is either poorly paid or not paid at all. In order for this categorization to function, it needs to rest on a clear idea of how to divide men and women. Capitalism also requires a certain level of unemployment to function. If there were enough work to go round, no worker would worry about losing their job, and all workers could demand higher wages and better conditions. The ever-present spectre of unemployment, on the other hand, enables employers to dictate conditions. Equally, in terms of severe crisis this 'reserve army' of unemployed people can be called into employment as and when the economy requires it. This system of deliberate unemployment needs ways to mark who will work and who will be left unemployed. In our society this is principally achieved through race, class, gender, and disability. Social exclusion and revulsion at the existence of trans people usefully provides another class of people more likely to be left in the ranks of the unemployed (even more so if they are trans and poor, black, or disabled - which is why unemployment is highest among these trans people).

KEYNESIAN ECONOMICS AND STIMULUS Keynesian economics is based on the notion that unemployment arises when total or aggregate demand in an economy falls short of the economy’s ability to supply goods and services. When products go unsold, jobs are lost. Aggregate demand, in turn, comes from two sources: the private sector (which is the majority) and the government. At times, aggregate demand is too buoyant—goods fly off the shelves and labor is in great demand—and we get rising inflation. At other times, aggregate demand is inadequate—goods are hard to sell and jobs are hard to find. In those cases, Keynes argued in the 1930s, governments can boost employment by cutting interest rates (what we now call looser monetary policy), raising their own spending, or cutting people’s taxes (what we now call looser fiscal policy). By the same logic, when there is too much demand, governments can fight actual or incipient inflation by raising interest rates (tightening monetary policy), increasing taxes, or reducing its own spending (thus tightening fiscal policy). That’s part of standard Keynesian economics, too, although Keynes, writing during the Great Depression, did not emphasize it. Setting aside the underlying theory, the central Keynesian policy idea is that the government can—and, Keynes argued, should—act as a kind of balance wheel, stimulating aggregate demand when it’s too weak and restraining aggregate demand when it’s too strong. For decades, American economists took for granted that most of that job should and would be done by monetary policy. Fiscal policy, they thought, was too slow, too cumbersome, and too political. And in the months after the Lehman Brothers failure, the Federal Reserve did, indeed, pull out all the stops—while fiscal policy did nothing. But what happens when, as was more or less the case by December 2008, the central bank has done almost everything it can, and yet the economy is still sinking? That’s why eyes started turning toward Congress and the president—that is, toward fiscal stimulus—after the 2008 election.

OBAMA WENT THROUGH STAGES. That first day, I was in multiple meetings where he tried to lift everyone’s spirits. That evening, he interrupted the senior staff meeting in Denis McDonough’s office and gave a version of the speech that I’d now heard three times as we all sat there at the table. He was the only one standing. It was both admirable and heartbreaking watching him take everything in stride, working—still—to lift people’s spirits. When he was done, I spoke first. “It says a lot about you,” I said, “that you’ve spent the whole day trying to buck the rest of us up.” People applauded. Obama looked down. On the Thursday after the election, he had a long, amiable meeting with Trump. It left him somewhat stupefied. Trump had repeatedly steered the conversation back to the size of his rallies, noting that he and Obama could draw big crowds but Hillary couldn’t. He’d expressed openness to Obama’s arguments about healthcare, the Iran deal, immigration. He’d asked for recommendations for staff. He’d praised Obama publicly when the press was there. Afterward, Obama called a few of us up to the Oval Office to recap. “I’m trying to place him,” he said, “in American history.” He told us Trump had been perfectly cordial, but he’d almost taken pride in not being attached to a firm position on anything. “He peddles bullshit. That character has always been a part of the American story,” I said. “You can see it right back to some of the characters in Huckleberry Finn.” Obama chuckled. “Maybe that’s the best we can hope for.” In breaks between meetings in the coming days, he expressed disbelief that the election had been lost. With unemployment at 5 percent. With the economy humming. With the Affordable Care Act working. With graduation rates up. With most of our troops back home. But then again, maybe that’s why Trump could win. People would never have voted for him in a crisis. He kept talking it out, trying on different theories. He chalked it up to multiple car crashes at once. There was the letter from Comey shortly before the election, reopening the investigation into Clinton’s email server. There was the steady release of Podesta emails from Wikileaks through October. There was a rabid right-wing propaganda machine and a mainstream press that gorged on the story of Hillary’s emails, feeding Trump’s narrative of corruption.

No sound strategy for studying fascism can fail to examine the entire context in which it was formed and grew. Some approaches to fascism start with the crisis to which fascism was a response, at the risk of making the crisis into a cause. A crisis of capitalism, according to Marxists, gave birth to fascism. Unable to assure ever-expanding markets, ever-widening access to raw materials, and ever-willing cheap labor through the normal operation of constitutional regimes and free markets, capitalists were obliged, Marxists say, to find some new way to attain these ends by force. Others perceive the founding crisis as the inadequacy of liberal state and society (in the laissez-faire meaning of liberalism current at that time) to deal with the challenges of the post-1914 world. Wars and revolutions produced problems that parliament and the market—the main liberal solutions—appeared incapable of handling: the distortions of wartime command economies and the mass unemployment attendant upon demobilization; runaway inflation; increased social tensions and a rush toward social revolution; extension of the vote to masses of poorly educated citizens with no experience of civic responsibility; passions heightened by wartime propaganda; distortions of international trade and exchange by war debts and currency fluctuations. Fascism came forward with new solutions for these challenges. Fascists hated liberals as much as they hated socialists, but for different reasons. For fascists, the internationalist, socialist Left was the enemy and the liberals were the enemies’ accomplices. With their hands-off government, their trust in open discussion, their weak hold over mass opinion, and their reluctance to use force, liberals were, in fascist eyes, culpably incompetent guardians of the nation against the class warfare waged by the socialists. As for beleaguered middle-class liberals themselves, fearful of a rising Left, lacking the secret of mass appeal, facing the unpalatable choices offered them by the twentieth century, they have sometimes been as ready as conservatives to cooperate with fascists. Every strategy for understanding fascism must come to terms with the wide diversity of its national cases. The major question here is whether fascisms are more disparate than the other “isms.” This book takes the position that they are, because they reject any universal value other than the success of chosen peoples in a Darwinian struggle for primacy. The community comes before humankind in fascist values, and respecting individual rights or due process gave way to serving the destiny of the Volk or razza. Therefore each individual national fascist movement gives full expression to its own cultural particularism. Fascism, unlike the other “isms,” is not for export: each movement jealously guards its own recipe for national revival, and fascist leaders seem to feel little or no kinship with their foreign cousins. It has proved impossible to make any fascist “international” work.

Many models are constructed to account for regularly observed phenomena. By design, their direct implications are consistent with reality. But others are built up from first principles, using the profession’s preferred building blocks. They may be mathematically elegant and match up well with the prevailing modeling conventions of the day. However, this does not make them necessarily more useful, especially when their conclusions have a tenuous relationship with reality. Macroeconomists have been particularly prone to this problem. In recent decades they have put considerable effort into developing macro models that require sophisticated mathematical tools, populated by fully rational, infinitely lived individuals solving complicated dynamic optimization problems under uncertainty. These are models that are “microfounded,” in the profession’s parlance: The macro-level implications are derived from the behavior of individuals, rather than simply postulated. This is a good thing, in principle. For example, aggregate saving behavior derives from the optimization problem in which a representative consumer maximizes his consumption while adhering to a lifetime (intertemporal) budget constraint.† Keynesian models, by contrast, take a shortcut, assuming a fixed relationship between saving and national income. However, these models shed limited light on the classical questions of macroeconomics: Why are there economic booms and recessions? What generates unemployment? What roles can fiscal and monetary policy play in stabilizing the economy? In trying to render their models tractable, economists neglected many important aspects of the real world. In particular, they assumed away imperfections and frictions in markets for labor, capital, and goods. The ups and downs of the economy were ascribed to exogenous and vague “shocks” to technology and consumer preferences. The unemployed weren’t looking for jobs they couldn’t find; they represented a worker’s optimal trade-off between leisure and labor. Perhaps unsurprisingly, these models were poor forecasters of major macroeconomic variables such as inflation and growth.8 As long as the economy hummed along at a steady clip and unemployment was low, these shortcomings were not particularly evident. But their failures become more apparent and costly in the aftermath of the financial crisis of 2008–9. These newfangled models simply could not explain the magnitude and duration of the recession that followed. They needed, at the very least, to incorporate more realism about financial-market imperfections. Traditional Keynesian models, despite their lack of microfoundations, could explain how economies can get stuck with high unemployment and seemed more relevant than ever. Yet the advocates of the new models were reluctant to give up on them—not because these models did a better job of tracking reality, but because they were what models were supposed to look like. Their modeling strategy trumped the realism of conclusions. Economists’ attachment to particular modeling conventions—rational, forward-looking individuals, well-functioning markets, and so on—often leads them to overlook obvious conflicts with the world around them.

I am speaking of the evenings when the sun sets early, of the fathers under the streetlamps in the back streets returning home carrying plastic bags. Of the old Bosphorus ferries moored to deserted stations in the middle of winter, where sleepy sailors scrub the decks, pail in hand and one eye on the black-and-white television in the distance; of the old booksellers who lurch from one ϧnancial crisis to the next and then wait shivering all day for a customer to appear; of the barbers who complain that men don’t shave as much after an economic crisis; of the children who play ball between the cars on cobblestoned streets; of the covered women who stand at remote bus stops clutching plastic shopping bags and speak to no one as they wait for the bus that never arrives; of the empty boathouses of the old Bosphorus villas; of the teahouses packed to the rafters with unemployed men; of the patient pimps striding up and down the city’s greatest square on summer evenings in search of one last drunken tourist; of the broken seesaws in empty parks; of ship horns booming through the fog; of the wooden buildings whose every board creaked even when they were pashas’ mansions, all the more now that they have become municipal headquarters; of the women peeking through their curtains as they wait for husbands who never manage to come home in the evening; of the old men selling thin religious treatises, prayer beads, and pilgrimage oils in the courtyards of mosques; of the tens of thousands of identical apartment house entrances, their facades discolored by dirt, rust, soot, and dust; of the crowds rushing to catch ferries on winter evenings; of the city walls, ruins since the end of the Byzantine Empire; of the markets that empty in the evenings; of the dervish lodges, the tekkes, that have crumbled; of the seagulls perched on rusty barges caked with moss and mussels, unϩinching under the pelting rain; of the tiny ribbons of smoke rising from the single chimney of a hundred-yearold mansion on the coldest day of the year; of the crowds of men ϧshing from the sides of the Galata Bridge; of the cold reading rooms of libraries; of the street photographers; of the smell of exhaled breath in the movie theaters, once glittering aϱairs with gilded ceilings, now porn cinemas frequented by shamefaced men; of the avenues where you never see a woman alone after sunset; of the crowds gathering around the doors of the state-controlled brothels on one of those hot blustery days when the wind is coming from the south; of the young girls who queue at the doors of establishments selling cut-rate meat; of the holy messages spelled out in lights between the minarets of mosques on holidays that are missing letters where the bulbs have burned out; of the walls covered with frayed and blackened posters; of the tired old dolmuşes, ϧfties Chevrolets that would be museum pieces in any western city but serve here as shared taxis, huϫng and puϫng up the city’s narrow alleys and dirty thoroughfares; of the buses packed with passengers; of the mosques whose lead plates and rain gutters are forever being stolen; of the city cemeteries, which seem like gateways to a second world, and of their cypress trees; of the dim lights that you see of an evening on the boats crossing from Kadıköy to Karaköy; of the little children in the streets who try to sell the same packet of tissues to every passerby; of the clock towers no one ever notices; of the history books in which children read about the victories of the Ottoman Empire and of the beatings these same children receive at home; of the days when everyone has to stay home so the electoral roll can be compiled or the census can be taken; of the days when a sudden curfew is announced to facilitate the search for terrorists and everyone sits at home fearfully awaiting “the oϫcials”; CONTINUED IN SECOND PART OF THE QUOTE

One economic problem is especially acute here: Unemployment … Most of the other problems, the ones that create a sense of crisis, are anticipatory. They grow out of the fear that the right-wing government's tentative attempts at reform will eventually corral France into an 'Anglo-Saxon' economy, where an unleashed free market will make everybody do awful jobs for no money, forever.

In 2005 joblessness would peak at 10.6 percent. To combat this scourge, between 2003 and 2005 the Schroeder government announced a national restructuring program titled Agenda 2010. Its main thrust was a multiphase program of labor market liberalization and benefit cuts, designed by a committee headed by VW’s head of human resources, Peter Hartz. The fourth and final phase of cuts, Hartz IV, became synonymous with a new German “reform” narrative. The unemployed were returned to work. Wage restraint restored German competitiveness. The reward came already in 2003 when Germany could boast of being the world export champion (Exportweltmeister). Agenda 2010 would come to define a new bipartisan self-understanding of Germany’s political class. Having accomplished the enormous task of reunification, Germany had overcome its internal difficulties and “reformed” its way back to economic health. It is a narrative that is superficially compelling and it would have significant implications for how Berlin approached the crisis of the eurozone, but it does not withstand close scrutiny. Hartz IV certainly drove millions of people more or less willingly off long-term unemployment benefits into a range of insecure jobs. This helped to hold down wages for unskilled workers, such as cashiers and cleaning workers. In the first ten years of the euro, despite soaring productivity, half of German households experienced no wage growth at all. This shortened unemployment rolls. It also increased pretax inequality and lowered Germany’s wages relative to its European neighbors. But as to the competitiveness of German exporters, the significance of Hartz IV is far less obvious. German companies do not win export orders by shaving the wages of unskilled workers. A far more important source of competitive advantage came from outsourcing production to Eastern Europe and Southern Europe. Added to which there was the boost from the global recovery of the early 2000s. While its economic impact has been exaggerated, what Hartz IV did transform was German politics. The blue-collar electorate and the left wing of the SPD never forgave Schroeder for Hartz IV.

And others I knew were hungry for the hope of the Easter message: a family raising other people’s children; a widower learning to find a new way in a life alone; people in financial crisis, unemployment, and homelessness; folks in broken relationships. Here we were, all together, waiting to hear the Easter message that Jesus’s death and Resurrection promises eternal life with Him in heaven, where there will be no more pain or stress or loneliness or death.

Lenin’s distinction is decisive. A propagandist, he says, to explain unemployment must talk about the capitalist nature of the crisis, the need for building a socialist society, etc.

The disruption of those social ties disproportionately affects girls and women.11 What happens when you feel less connected to your neighborhood, less trusting of the people who live next door or down the street? If you’re a guy, then maybe you just stay home and spend a few extra hours playing your video games or put some extra time into your fantasy football league. Girls and women seem to need that network of human connection more, so they miss it more when it’s not there. Professor Twenge examined the correlation between 16 different indicators and the likelihood that a woman is feeling anxious. She found that lack of social trust is the highest predictor of anxiety—higher than the divorce rate, higher than the unemployment rate, and more important than economic conditions generally.12

Currency wars begin in an atmosphere of insufficient internal growth. The country that starts down this road typically finds itself with high unemployment, low or declining growth, a weak banking sector and deteriorating public finances. In these circumstances it is difficult to generate growth through purely internal means and the promotion of exports through a devalued currency becomes the growth engine of last resort.

The unemployment rate, after its encouraging drop early in the year, would stagnate near 9 percent into the fall

By their readiness to do more than their colleagues, agency workers can be used by management to reduce the ‘comfort zones’ of permanent employees, as a personnel manager explained in an interview. In the average firm, moreover, the permanent staff experience precarious employment as a means of social discipline that bridges the internal and external labour markets; this has altered the ‘reserve army’ mechanism on the labour market.71 In the past, it was the unemployed who filled the ranks of the capitalist reserve army, exerting an external structural pressure on wages and working conditions. Precarious employment now internalizes this function within the firm. The agency workers may be inside the firm, but they have one foot outside of it in unemployment, so their mere presence reminds the permanent staff that their future might also become less secure.

Jim Cramer’s Mad Money is one of the most popular shows on CNBC, a cable TV network that specializes in business and financial news. Cramer, who mostly offers investment advice, is known for his sense of showmanship. But few viewers were prepared for his outburst on August 3, 2007, when he began screaming about what he saw as inadequate action from the Federal Reserve: “Bernanke is being an academic! It is no time to be an academic. . . . He has no idea how bad it is out there. He has no idea! He has no idea! . . . and Bill Poole? Has no idea what it’s like out there! . . . They’re nuts! They know nothing! . . . The Fed is asleep! Bill Poole is a shame! He’s shameful!!” Who are Bernanke and Bill Poole? In the previous chapter we described the role of the Federal Reserve System, the U.S. central bank. At the time of Cramer’s tirade, Ben Bernanke, a former Princeton professor of economics, was the chair of the Fed’s Board of Governors, and William Poole, also a former economics professor, was the president of the Federal Reserve Bank of St. Louis. Both men, because of their positions, are members of the Federal Open Market Committee, which meets eight times a year to set monetary policy. In August 2007, Cramerwas crying outforthe Fed to change monetary policy in order to address what he perceived to be a growing financial crisis. Why was Cramer screaming at the Federal Reserve rather than, say, the U.S. Treasury—or, for that matter, the president? The answer is that the Fed’s control of monetary policy makes it the first line of response to macroeconomic difficulties—very much including the financial crisis that had Cramer so upset. Indeed, within a few weeks the Fed swung into action with a dramatic reversal of its previous policies. In Section 4, we developed the aggregate demand and supply model and introduced the use of fiscal policy to stabilize the economy. In Section 5, we introduced money, banking, and the Federal Reserve System, and began to look at how monetary policy is used to stabilize the economy. In this section, we use the models introduced in Sections 4 and 5 to further develop our understanding of stabilization policies (both fiscal and monetary), including their long-run effects on the economy. In addition, we introduce the Phillips curve—a short-run trade-off between unexpected inflation and unemployment—and investigate the role of expectations in the economy. We end the section with a brief summary of the history of macroeconomic thought and how the modern consensus view of stabilization policy has developed.

In all crises, there are those who act and those who fear to act. The Federal Reserve, born of the now little-known Panic of 1907, failed its first major test in the 1930s. Its leaders and the leaders of other central banks around the world remained passive in the face of ruinous deflation and financial collapse. The result was a global Great Depression, breadlines, and 25 percent unemployment in the United States, and the rise of fascist dictatorships abroad. Seventy-five years later, the Federal Reserve—the institution that I have dedicated the better part of my adult life to studying and serving—confronted similar challenges in the crisis of 2007–2009 and its aftermath. This time, we acted.

ECB – unlike, say, the US Federal Reserve which is placed within a political structure where Congress, the President, and the Treasury supply all the necessary political counterweights – is free (indeed, is supposed) to operate in a political vacuum: the parliaments and governments of the members of the euro zone have lost control over monetary policy, while the EP has no authority in this area. Moreover, the ECB enjoys not only ‘instrument independence’ but also ‘goal independence’. When a central bank enjoys only instrument independence, it is up to the government to fix the target – say, the politically acceptable level of inflation – leaving then the central bank free to decide how best to achieve the target. In the case of goal independence, the discretionary power of the central banker is much larger. The idea that central bankers, or other economic experts, may know what rate of inflation is in the long-run interest of a country (and, a fortiori, of a group of countries at very different levels of socioeconomic developments such as the EU) is indeed extraordinary. Politicians and elected policymakers, rather than experts, can be expected to be sensitive to the public’s preferred balance of inflation and unemployment. If the public wants to trade some unemployment for a somewhat higher rate of inflation, it can make this preference known by electing candidates who stand for such a policy; but no such possibility is given to the citizens of the euro zone or to their political representatives.

Credit expansion results in the recurrence of economic crisis and periods of depression. Inflation makes the prices of all commodities and services soar. The attempts to enforce wage rates higher than those the unhampered market would have determined produce mass unemployment prolonged year after year. Price ceilings result in a drop in the supply of commodities affected. The economists have proved these theorems in an irrefutable way. No

But unlike Nevada, Ireland had to fend for itself when it came to propping up its banks and paying its unemployment benefits. Lacking a printing press, it had to go cap in hand to the money markets to borrow huge quantities of money that, in Nevada’s case, had been paid for at the federal level.

But you can’t forget how easy it is to seduce people,” Ben said. “You see that everywhere, be it politics or religion. Even here in Europe, populists have been wildly successful despite the fact that this continent has a lot of experience with fanatical right- and left-wing ideology.” “Most people yearn for guidance,” Fritz said. “They want others to determine their lives for them, at least when all is said and done. In politics, the only people who are respected are so-called ‘strong’ leaders or politicians who show the way. It’s hardly surprising these people don’t have a basic understanding of democracy.” “That’s the problem,” said Ben. “People love to be told what they should do. And the worse they have it, the more grateful they are for a strong hand to push them.” “That said, we don’t exactly have it that bad here in Europe,” Hannes added. “Sure, there’s always some economic crisis and unemployment is rising, but still most people have it good enough that they can’t be enthralled by some dictator.” “Economic crises aren’t the only reason people turn to extremism,” Fritz said. “It’s also about personal crises. Look at the faces on the bus. How many people look happy?” “They’re probably just tired,” Ben joked. “But it’s true. There are plenty of studies which suggest that people in poorer countries are happier than we are. But when did you last hear politicians discuss the question of how we actually want to live? Emotional needs are basically irrelevant. It’s all about growth, recovery, optimization, and efficiency. If you work day after day in some office like a robot, there’s an inner emptiness that reality shows and dramas on television can no longer fill. Take a look at the nonsense the masses tune into night after night. You can’t consume real feelings, you have to live them.” “But that’s exactly what our society has forgotten how to do,” Fritz said. “You need someone to advise you on how to be ‘happy.’ At some schools, students can now choose Happiness as an elective. How sad is that? Have we become so far removed from real life that we have to introduce happiness as a school subject? How can society not understand something so fundamental?” “Now some charismatic, eloquent politician appears who knows exactly how to appeal to people,” Ben said. “Do you really think we would be completely immune to a politician’s temptations and promises today?” “Okay, okay!” Hannes laughed and raised his hands. “I give up. At the next neo-Nazi march, I’ll be standing in the front line of the counterdemonstration, I promise. But speaking of robots—I spent way too long spinning on the hamster wheel today. And Fritz has already given me a list of things to do tomorrow. It’s been lovely chatting, but I have to hit the hay.” “Man! But we’ve only just started planning the revolution,” Ben joked. “No, my young colleague’s right.” Fritz rose from his chair. “I just have to use the bathroom and then I’ll be on my way.” “It’s straight ahead.” Ben showed him the way and handed Hannes another beer. “Come on, you Goody Two-Shoes. Let’s have a

Of course the predictable festival of crisis managing has begun in earnest now. Rice and his wife Janay will appear on The Today Show this week with Matt Lauer. Janay Rice tells a first-person story to ESPN, standing behind the man who laid her out and somehow trying to stand for victims of domestic violence at the same time, as she tries to help her husband get his old job in football back, so he stops being an unemployed wife beater sometime soon.

Moreover, these changes occurred when most American households actually found their real incomes stagnant or declining. Median household income for the last four decades is shown in the chart above. But this graph, disturbing as it is, conceals a far worse reality. The top 10 percent did much better than everyone else; if you remove them, the numbers change dramatically. Economic analysis has found that “only the top 10 percent of the income distribution had real compensation growth equal to or above . . . productivity growth.”14 In fact, most gains went to the top 1 percent, while people in the bottom 90 percent either had declining household incomes or were able to increase their family incomes only by working longer hours. The productivity of workers continued to grow, particularly with the Internet revolution that began in the mid-1990s. But the benefits of productivity growth went almost entirely into the incomes of the top 1 percent and into corporate profits, both of which have grown to record highs as a fraction of GNP. In 2010 and 2011 corporate profits accounted for over 14 percent of total GNP, a historical record. In contrast, the share of US GNP paid as wages and salaries is at a historical low and has not kept pace with inflation since 2006.15 As I was working on this manuscript in late 2011, the US Census Bureau published the income statistics for 2010, when the US recovery officially began. The national poverty rate rose to 15.1 percent, its highest level in nearly twenty years; median household income declined by 2.3 percent. This decline, however, was very unequally distributed. The top tenth experienced a 1 percent decline; the bottom tenth, already desperately poor, saw its income decline 12 percent. America’s median household income peaked in 1999; by 2010 it had declined 7 percent. Average hourly income, which corrects for the number of hours worked, has barely changed in the last thirty years. Ranked by income equality, the US is now ninety-fifth in the world, just behind Nigeria, Iran, Cameroon, and the Ivory Coast. The UK has mimicked the US; even countries with low levels of inequality—including Denmark and Sweden—have seen an increasing gap since the crisis. This is not a distinguished record. And it’s not a statistical fluke. There is now a true, increasingly permanent underclass living in near-subsistence conditions in many wealthy states. There are now tens of millions of people in the US alone whose condition is little better than many people in much poorer nations. If you add up lifetime urban ghetto residents, illegal immigrants, migrant farm-workers, those whose criminal convictions sharply limit their ability to find work, those actually in prison, those with chronic drug-abuse problems, crippled veterans of America’s recently botched wars, children in foster care, the homeless, the long-term unemployed, and other severely disadvantaged groups, you get to tens of millions of people trapped in very harsh, very unfair conditions, in what is supposedly the wealthiest, fairest society on earth. At any given time, there are over two million people in US prisons; over ten million Americans have felony records and have served prison time for non-traffic offences. Many millions more now must work very long hours, and very hard, at minimum-wage jobs in agriculture, retailing, cleaning, and other low-wage service industries. Several million have been unemployed for years, exhausting their savings and morale. Twenty or thirty years ago, many of these people would have had—and some did have—high-wage jobs in manufacturing or construction. No more. But in addition to growing inequalities in income and wealth, America exhibits

Yet we are currently not really in a crisis for capitalism. We must merely recognize that capitalism must live within certain rules. Indeed our whole view of the economy, with all of those animal spirits, indicates why the government must set those rules. It may be true that in the classical model there is full employment. But in our view the waves of optimism and pessimism cause large-scale changes in aggregate demand. Since wages are determined largely by considerations of fairness, these changes in demand translate not into shifts in wages and prices but into shifts in employment. When demand goes down, unemployment rises. It is the role of the government to mute those changes.

Between 1929 and 1930, one-third of the hard-pressed private agencies went under, unable to raise the money they needed. As Hastings Hart, a pioneering child-welfare leader, pointed out, it was time for government to step in with far more than it had ever done to deal with this unprecedented crisis. In September 1931, with Governor Franklin D. Roosevelt leading the way, the New York State Legislature finally passed the first law giving relief to the unemployed. By the end of December 1933, what was called Home Relief had started all over New York City. This was the beginning of the change from the dominance of private philanthropy to the dominance of public welfare, and the recognition that citizens had a right to expect to be taken care of. But getting help wasn’t made easy or pleasant. William Matthews, head of the Emergency Work Bureau in New York City, protested, “The whole damn theory of the thing is to make relief giving so unpleasant, so disagreeable, in fact so insulting to decent people that they stay away from the places where it is given.” As William Bremer detailed in his book Depression Winters, recipients of private and public charity were subject to scrutiny, told what they could and could not buy, and even accompanied by “voluntary shoppers” who supervised their purchases. Buying cigarettes, beer, candy, pies, and cakes was forbidden. And no cash changed hands. Recipients were given bags of coal and clothing, food tickets, and rent vouchers, and storekeepers were forbidden to give them change in cash.

With the triumph of the Popular Party on 20 November 2011 in a general election dominated by the debt crisis and nearly five million unemployed, desmemoria is likely now to be in the ascendant.

The years 1928-1933 were a time of crisis and unemployment all over Europe an the struggle to survive - be housed, fed and clothed - was real. I did not actually understand, at the time, everything that went on around me, but struggling hard against financial difficulties and being Jewish, too, made for an on-going hard life.

In 2003, Néstor Kirchner, a highly charismatic figure, became president after a succession of two other short presidencies during the crisis. Cardinal Bergoglio denounced Kirchner’s economic policies because they exploited the poor. Further, the Kirchner government’s official economic numbers were likely manipulated in his favor, failing to do justice to the real situation facing the average Argentine. In response, Cardinal Bergoglio had the archdiocese collect its own statistics on inflation and unemployment in Argentina. Kirchner, in turn, lashed out against the Cardinal, calling him the “leader of the opposition.” The president decided to make other plans for the annual commemoration of the May Revolution, a day when the president traditionally attends the Te Deum service with the archbishop at the cathedral.

Greece can balance its books without killing democracy Alexis Tsipras | 614 words OPINION Greece changes on January 25, the day of the election. My party, Syriza, guarantees a new social contract for political stability and economic security. We offer policies that will end austerity, enhance democracy and social cohesion and put the middle class back on its feet. This is the only way to strengthen the eurozone and make the European project attractive to citizens across the continent. We must end austerity so as not to let fear kill democracy. Unless the forces of progress and democracy change Europe, it will be Marine Le Pen and her far-right allies that change it for us. We have a duty to negotiate openly, honestly and as equals with our European partners. There is no sense in each side brandishing its weapons. Let me clear up a misperception: balancing the government’s budget does not automatically require austerity. A Syriza government will respect Greece’s obligation, as a eurozone member, to maintain a balanced budget, and will commit to quantitative targets. However, it is a fundamental matter of democracy that a newly elected government decides on its own how to achieve those goals. Austerity is not part of the European treaties; democracy and the principle of popular sovereignty are. If the Greek people entrust us with their votes, implementing our economic programme will not be a “unilateral” act, but a democratic obligation. Is there any logical reason to continue with a prescription that helps the disease metastasise? Austerity has failed in Greece. It crippled the economy and left a large part of the workforce unemployed. This is a humanitarian crisis. The government has promised the country’s lenders that it will cut salaries and pensions further, and increase taxes in 2015. But those commitments only bind Antonis Samaras’s government which will, for that reason, be voted out of office on January 25. We want to bring Greece to the level of a proper, democratic European country. Our manifesto, known as the Thessaloniki programme, contains a set of fiscally balanced short-term measures to mitigate the humanitarian crisis, restart the economy and get people back to work. Unlike previous governments, we will address factors within Greece that have perpetuated the crisis. We will stand up to the tax-evading economic oligarchy. We will ensure social justice and sustainable growth, in the context of a social market economy. Public debt has risen to a staggering 177 per cent of gross domestic product. This is unsustainable; meeting the payments is very hard. On existing loans, we demand repayment terms that do not cause recession and do not push the people to more despair and poverty. We are not asking for new loans; we cannot keep adding debt to the mountain. The 1953 London Conference helped Germany achieve its postwar economic miracle by relieving the country of the burden of its own past errors. (Greece was among the international creditors who participated.) Since austerity has caused overindebtedness throughout Europe, we now call for a European debt conference, which will likewise give a strong boost to growth in Europe. This is not an exercise in creating moral hazard. It is a moral duty. We expect the European Central Bank itself to launch a full-blooded programme of quantitative easing. This is long overdue. It should be on a scale great enough to heal the eurozone and to give meaning to the phrase “whatever it takes” to save the single currency. Syriza will need time to change Greece. Only we can guarantee a break with the clientelist and kleptocratic practices of the political and economic elites. We have not been in government; we are a new force that owes no allegiance to the past. We will make the reforms that Greece actually needs. The writer is leader of Syriza, the Greek oppositionparty

Although fascism rallies to the defense of the main points of bourgeois ideology which has become conservative (the family, property, the moral order, the nation), reuniting the petty-bourgeoisie and the unemployed routed by crisis or deceived by the impotence of socialist revolution, it is not itself fundamentally ideological. It presents itself as it is: a violent resurrection of myth which demands participation in a community defined by archaic pseudo-values: race, blood, the leader. Fascism is technically-equipped archaism. Its decomposed ersatz of myth is revived in the spectacular context of the most modern means of conditioning and illusion. Thus it is one of the factors in the formation of the modern spectacle, and its role in the destruction of the old workers’ movement makes it one of the fundamental forces of present-day society.

I have been watching the Democrats run the USA for four years. The police are still corrupt and incompetent, their ‘green’ energy policy is toxic, workplace health and safety enforcement through OSHA is a ‘ghost’, Boeing is a global embarrassment, millions of people are being denied their eligible disability benefits through feeble excuses, mental illness is a national crisis, cities have filled up with the homeless, housing is out of reach to the masses, rents have gone astronomical, their proxy wars have us on the edge of the next nuclear disaster, their unemployment numbers are fraudulent because they do not count the long term unemployed or the disabled, unemployment benefits are cut off to the long term unemployed, illegal immigration went crazy during their term, and so on. I will be using my 2024 USA vote for positive change and that will not be coming from another four years of the Democrats.

... there is a difference between reading about the end of the world and actually seeing it with your own eyes. Watching a kingdom, drunk on sugar and youth culture and hippie nostalgia and reality TV and porno dreams and Hollywood lies, shrivel up and fall apart; it's like watching Alexandria and Constantinople and Rome and Athens all crumble to ash. Rising poverty. The annual migration inland, as the unemployment and homelessness and hopelessness on the West Coast spread like poison through a society that hadn't yet recovered from the pandemic. And on top of that, the forest fires that began earlier and ended later each year, meaning that a period that had once stretched from June to September now spanned April to November. Some parts of California were now more or less uninhabitable, there were places the insurance companies refused to cover, with homeowners unable to renew their existing policies, and I knew enough to understand that once the money starts leaving a place, the people follow.

Allied shipping repairs gave a great boost to South African steel manufacturing. By 1943, manufacturing had overtaken mining as the largest employer and producer of wealth in South Africa. With increasing land restrictions and poverty in the rural areas, black people were already pouring into the rising manufacturing centres of the Witwatersrand, Cape Town and Port Elizabeth. It was a major period of black urbanisation in South Africa, and a time of great opportunities for some. But it was also a time of growing black urban poverty and unemployment, as the numbers seeking work far outstripped the numbers of new jobs available. It was a situation already approaching crisis point when the 200,000 whites and 100,000 blacks serving in Allied armies overseas returned to South Africa after the war.

The stated object of the policy is to increase the cash reserves of the banks and financial institutions, so that they can increase their loans to business and individuals, thus stimulating the economy and providing new jobs for the unemployed. That is the theory, but it works only if you have both willing lenders and borrowers. In the absence of either one or both the medicine creates more questionable side effects than the intended recovery.

With the de-collectivization of the welfare state, there is also the growing danger of downward mobility and the stigmatization bound up with this. Unemployment, low pay, poverty, reduced prospects, and so forth were previously not considered personal deficiencies, but rather the shared collective fate of a class. Class milieus propagated and handed down ‘sustaining counter-interpretations, forms of defence and support’.107 Through individualization, this previously collective fate becomes the personal fate of the ‘market individual’. The dependency of our society on education precisely reinforces this process. Education may be a universal value, but it also draws new barriers.

The traditional career path—joining a firm when young and leaving it only at the end of working life, then going on to draw a pension—has become an infrequent relic of a previous age. On the other hand, ever more people experience breaks in their curriculum vitae, constituting a literal social injury. They fall into a widening ‘twilight zone’, oscillating between employment and unemployment. They may well work most of the time, but their jobs are seldom long-term.54

Choice of profession also no longer guarantees a high social status. This is bound up, among other things, with fragmented processes of downward mobility within occupational groups. A senior teacher earns a relatively comfortable income and need not worry about the future; they may even be able to retire early. In the same school and in the same class, however, there is possibly also a younger teacher on a temporary contract who has to claim unemployment benefit during the summer vacation and has no prospects for permanent employment. (Many German states now rely on a growing number of flexible teachers who are no longer guaranteed permanent positions.) In the postal service, too, although there are still many permanent employees, newly hired staff generally are not offered any job security (cf. Chapter 5). Among certain occupational groups the differences can be tremendous, as with journalists, for example. Those who began working at major German publications like Stern, Spiegel or Die Zeit ten or twenty years ago could expect a secure future. In the big publishing houses today, on the other hand, not only have precarious jobs and poorly paid groups of online writers proliferated, but not even the established staff can feel secure any more. A growing share belong to the ‘media precariat’ and earn less than €30,000 per year.99 Another example is that of lawyers, formerly the very model of status and prosperity. This professional group now divides into those who continue to earn good money and enjoy a high social prestige while employed in large offices or working for corporations, and a growing flock of precarious self-employed legal professionals, who fail to gain a steady footing in an over-filled market.

The following fundamental question therefore arises: what is the importance of occupational upward mobility today? The last section discussed the difficulties of analysing occupational groups in relation to social stability. If the son of a skilled worker finishes secondary education and becomes a journalist, or the daughter of a commercial employee becomes a lawyer, then both have risen in relation to their parents, according to the traditional model. Their jobs bring greater social prestige—however, they may no longer automatically earn more money than their parents. Likewise, whether they are precariously employed and under constant threat of unemployment is generally not taken into account.

German reunification not only caused unemployment to rise even further, but also placed an enormous strain on the state budget. The disintegration of the Eastern bloc put further pressure on German capitalism, for it meant not only new markets for German products, but also new geographical opportunities to relocate production. This proved extremely attractive for German companies, which were able to find enough qualified workers at significantly lower wages without modifying their training systems significantly. The introduction of the euro provided Germany with the medium-term advantage that other European countries could no longer counter German wage pressure by devaluating their own currencies. In the end, Germany’s export orientation produced large export surpluses at home, but also caused growing international trade imbalances.

A Corona Corps would not be cheap: 180,000 members at, I estimate, $60,000 each for compensation, training, and support would cost nearly $11 billion. The government could no doubt find a way to make it cost twice that. Yet that’s a rounding error on the sums allocated for stimulus and unemployment to date. Consider it a warranty against needing another multitrillion-dollar rescue package.

Yes, of course, the U-shaped curve—she’d been mentioning that a lot lately, whenever Jack prodded her in this way. It was a phenomenon well known among certain economists and behavioral psychologists, that happiness, in general, over a lifetime, tended to follow a familiar pattern: people were most happy when they were young and when they were old, and least happy in the middle. It seemed that happiness spiked around age twenty, spiked again around age sixty, but bottomed out in between, which was where Jack and Elizabeth now found themselves, at the bottom of that curve, in midlife, a period that was notable not for its well-publicized “crisis” (actually a pretty rare phenomenon—only 10 percent of people reported having one) but for its slow ebb into a quiet and often befuddling restlessness and dissatisfaction. This was, Elizabeth insisted, a universal constant: the U-shaped curve pertained to both men and women, both the married and unmarried, the rich and poor, the employed and unemployed, the educated and uneducated, the parents and the child-free, in every country, every culture, every ethnicity, for all the decades that researchers had done this work—the science showed that people in midlife were carrying around with them, all the time, a feeling that was, statistically speaking, the equivalent of someone close to them having recently died. That’s how it felt, she said, that’s how far you were from your early-twenties peak, according to objective measures of well-being. Elizabeth suspected it had something to do with biology, natural selection, evolutionary pressures millions of years ago, as it had been recently shown by primatologists that great apes also experienced the exact same happiness curve, which suggested that this particular midlife sadness must have provided some kind of prehistoric advantage, must have helped our ancient primate ancestors survive. Perhaps, Elizabeth hypothesized, it was because the most vulnerable members of any troop were the young and the old, and so it was important

The protecting state prioritized the protection of speculators and fraudsters over the needs of citizens who had been hit by the crisis and unemployment.

Since The Great Recession, the global financial crash of 2008-09, the debt-fuelled post-recession recovery has been the weakest in the post-war era (since the end of World War Two). Whereas total outstanding credit in the US after the Wall Street Crash grew from 160% to 260% of GDP between 1929 and 1932, the figure rose from 365% in 2008 to 540% in 2010. (And this does not include derivatives, whose nominal outstanding value is at least four times GDP).[34] A long depression and rising right-wing populism have followed, including the stunning ascendency of property tycoon and TV celebrity demagogue Donald Trump as the President of the US in 2016.[35] The British public’s vote in June 2016 to leave the EU delivered another shock of global significance. A chronic drift towards trade wars and protectionism is accelerating and in January 2018, US Defence Secretary Jim Mattis said that “great power competition, not terrorism, is now the primary focus of US national security”, putting Russia, China and – yes – Europe in the crosshairs of the world’s long-time dominant economic and military power. Adding to this age of anxiety is the accelerating automation revolution. What should be an emancipatory and utopian development only generates insecurity at the prospect of unprecedented mass unemployment. It can be no coincidence that all these crises are converging at exactly the same time. They cannot be explained away by cynical and shallow generalisations about ‘human nature’. In the course of this investigation we will see that in fact all of these crises have a common root cause: the decaying nature of capitalism and its tendency towards breakdown. Indeed, average Gross Domestic Product (GDP) growth rates in the world’s richest countries have fallen in every decade since the 1960s and are clearly closing in on zero. Rates of profit, manufacturing costs and commodity prices are also trending towards zero. Drawing on Henryk Grossman’s vital clarification of Karl Marx’s methodology, we shall see that capitalism is heading inexorably towards a final, insurmountable breakdown that is destined to strike much earlier than a zero rate of profit. Indeed, we shall also see that the next, imminent economic crash will result in worldwide hyperinflation. We will also show that the economic crisis is intensifying competition between nation-states, forcing them into a situation which threatens the most destructive world war to date.

Potential problem as homelessness must be tackled on many fronts. Prevention is vital. Vocational and occupational job counseling and retraining; pre- and post-marital counseling; parental and family counseling; crisis management; work schedule options; residence options ​Some of the bill for retraining might be paid out of a tax on companies doing work on the Moon and importing workers and their families. The rehabilitation work might in part be done by OMOs, occupational maintenance organizations. What is needed is not job “insurance” (i.e. unemployment compensation) but job “assurance.” ​Those still falling through the more stubborn cracks can be provided storage lockers for what belongings they retain, lockers to which is attached a legal address for receipt of mail, and for listing of job applications. This host facility might provide cooking facilities and showers. ​Use of such a facility will bring with it a requirement to participate in retraining and rehabilitation programs. This is in everybody’s interest. “Tanstaafl still rules!” [There ain’t no such thing as a free lunch!”]

We confront a paradoxical process, then, whose duality - tetanization and inertia, acceleration in a void, overheated production with no attendant social gains or aims - is a reflection of the two phenomena conventionally attributed to the crisis: inflation and unemployment. Traditionally, inflation and unemployment are variables in the equation of growth. At this level, however, there is really no question of crisis: these phenomena are anomic in character, and anomie is merely the shadow cast by an organic solidarity. What is worrying, by contrast, is anomaly. The anomalous is not a clear symptom but, rather, a strange sign of failure, of the infraction of a rule which is secret - or which, at any rate, we know nothing about. Perhaps an excess of goals is the culprit - we simply do not know. Something escapes us, and we are escaping from ourselves, or losing ourselves, as part of an irreversible process; we have now passed some point of no return, the point where the contradictoriness of things ended, and we find ourselves, still alive, in a universe of non-contradiction, of enthusiasm, of ecstasy - of stupor in the face of a process which, for all its irreversibility, is bereft of meaning.

Unemployment, too, has taken on new meaning. It is no longer a strategy of capital (the reserve army of labour). It is no longer a critical factor in the play of social relationships - if it were, since the danger level was passed long ago, it would necessarily have sparked unprecedented upheavals. What is unemployment today? It too is a sort of artificial satellite, a satellite of inertia, a mass with a charge of electricity that cannot even be described as a negative charge, for it is static: I refer to that increasingly large portion of society that is deepfrozen. Beneath the accelerating pace of the circuits and systems of exchange, beneath all the frenzied activity, there is something in us - in each of us - that slows down to the point where it fades out of circulation. This is the inertia point around which the whole of society eventually begins to gravitate. It is as though the two poles of our world had been brought into contact, shortcircuiting in such a way that they simultaneously hyperstimulate and enervate potential energies. This is no longer a crisis, but a fatal development - a catastrophe in slow motion.

Ormerod examined the performance of democratic governments on those issues that perennially engaged their ambitions: what I have called their claims to competence. Take unemployment as an obvious example. Every contemporary government has claimed the ability to reduce unemployment. The architects of the stimulus bill passed in 2009 claimed that it would save or create 3.5 million jobs and significantly lower the unemployment rate. It would do so by spending a lot of money. Of necessity, that has been the chosen economic tool of government. Since World War II, Ormerod notes, governments have absorbed a much larger chunk of the national output in pursuit of worthy goals such as full employment. In Britain, where excellent statistics have been kept from the Victorian era onward, the size of the public sector as a proportion of the economy has doubled since 1946, compared to the period 1870–1938. Yet the difference in the average unemployment rate before and after the expansion of government was statistically negligible. A

While GDP is the standard measure of economic performance,2 there are other indicators, and in virtually every one, the eurozone’s overall performance is dismal, and that of the crisis countries, disastrous: unemployment is very high; youth unemployment is very, very high; and output per capita is lower than before the crisis for the eurozone as a whole, much lower for some of the crisis countries.

Loss of market, and resulting unemployment, are not foreordained. They are not inevitable. They are man-made.

In 1932, the nation reached a point of absolute desperation. President Hoover's limited response to the economic crisis angered Americans, and radicalism reared its head. In Seattle, radicals took control of the Unemployed Citizens' League, a self-help organization formed in 1931. Founded by socialists, the League pursued a moderate course of action and worked effectively with city leaders. Members cut wood on donated land, gleaned surplus food from farms, fished, and distributed food and supplies to the needy. As radical labor leaders, and later communists, took control, the League led hunger marches to Olympia, faced increasing hostility, and lost influence in the city.52

Identifying the “causes” of the riots became a growth industry for months after. Two cosmic narratives eventually crystallized and confronted one another. The first told a story of social oppression and deprivation: it blamed the riots on government cutbacks and the ensuing loss of services, and on unemployment, inequality, racism. The second narrative condemned the moral collapse of the British: the rioters, on this account, had been the product of an entitlement culture which tolerated misbehavior while demanding nothing in the way of responsibility or self-restraint.

Much of the negation poisoning the democratic process has stemmed from a confusion of the personal and the statistical. I may hold down an excellent job, but the failure of the stimulus to meet its targets infuriates me. I may live in peaceful Vienna, Virginia, safe from harm—but a report that several Americans have died violently in Kabul appears like a fatal failure of authority. By dwelling on the plane of gross statistics, I become vulnerable to grandiose personal illusions: that if I compel the government to move in this direction or that, I can save the Constitution, say, or the earth, or stop the war, or end poverty now. Though my personal sphere overflows with potentiality, I join the mutinous public and demand the abolition of the established order. This type of moral and political displacement is nothing new. The best character in the best novel by Dickens, to my taste, is Mrs. Jellyby of Bleak House, who spent long days working to improve “the natives of Borrioboola-Gha, on the left bank of the Niger,” while, in her London home, her small children ran wild and neglected. Dickens termed this “telescopic philanthropy”—the trampling of the personal sphere for the sake of a heroic illusion. Mrs. Jellyby, sitting in quite a nest of waste paper, drank coffee all the evening and dictated at intervals to her eldest daughter. She also held a discussion with Mr. Quale, the subject of which seemed to be—if I understood it—the brotherhood of humanity, and gave utterance to some beautiful sentiments. I was not so attentive an auditor as I might have wished to be, however, for Peepy and the other children came flocking about Ada and me in a corner of the drawing-room to ask for another story; so we sat down among them and told them in whispers “Puss in Boots” and I don’t know what else until Mrs. Jellyby, accidentally remembering them, sent them to bed.3 The revolt of the public has had a telescopic and Jellybyan aspect to it. Though they never descended to details, insurgents assumed that, by symbolic gestures and sheer force of desire, they could refashion the complex systems of democracy and capitalism into a personalized utopia. Instead, unknowingly, they crossed into N. N. Taleb’s wild “Extremistan,” where “we are subjected to the tyranny of the singular, the accidental, the unseen, and the unpredicted.” In that unstable country, “you should always be suspicious of the knowledge you derive from data.”4 I can’t command a complex social system like the United States, but I can control my political expectations of it: I can choose to align them with reality. To seize this alternative, I must redirect the demands I make on the world from the telescopic to the personal, because actionable reality resides in the personal sphere. I can do something about losing my job, for example, but I have no clue what could or should be done about the unemployment rate. I know directly whether a law affects my business for better or worse, but I have no idea of its effect on the gross domestic product. I can assist a friend in need, but I have little influence over the natives of Borrioboola-Gha, on the left bank of the Niger. Control, however tenuous, and satisfaction, however fleeting, can only be found in the personal sphere, not in telescopic numbers reported by government. A

The armistice that ended the First World War had given birth to an uneasy peace. The disillusioned youth who survived the first global conflict had their brief period of rebellion before the Great Depression burdened the population with an economic crisis so devastating that it crippled the world’s markets, engendering mass unemployment that in turn led to social discontent and distrust in government.

In 2009, an American soldier named Bowe Bergdahl slipped through a gap in the concertina wire at his combat outpost in southern Afghanistan and walked off into the night. He was quickly captured by a Taliban patrol, and his absence triggered a massive search by the US military that put thousands of his fellow soldiers at risk. The level of betrayal felt by soldiers was so extreme that many called for Bergdahl to be tried for treason when he was repatriated five years later. Technically his crime was not treason, so the US military charged him with desertion of his post—a violation that still carries a maximum penalty of death. The collective outrage at Sergeant Bergdahl was based on very limited knowledge but provides a perfect example of the kind of tribal ethos that every group—or country—deploys in order to remain unified and committed to itself. If anything, though, the outrage in the United States may not be broad enough. Bergdahl put a huge number of people at risk and may have caused the deaths of up to six soldiers. But in purely objective terms, he caused his country far less harm than the financial collapse of 2008, when bankers gambled trillions of dollars of taxpayer money on blatantly fraudulent mortgages. These crimes were committed while hundreds of thousands of Americans were fighting and dying in wars overseas. Almost 9 million people lost their jobs during the financial crisis, 5 million families lost their homes, and the unemployment rate doubled to around 10 percent. For nearly a century, the national suicide rate has almost exactly mirrored the unemployment rate, and after the financial collapse, America’s suicide rate increased by nearly 5 percent. In an article published in 2012 in The Lancet, epidemiologists who study suicide estimated that the recession cost almost 5,000 additional American lives during the first two years—disproportionately among middle-aged white men. That is close to the nation’s losses in the Iraq and Afghan wars combined. If Sergeant Bergdahl betrayed his country—and that’s not a hard case to make—surely the bankers and traders who caused the financial collapse did as well. And yet they didn’t provoke nearly the kind of outcry that Bergdahl did. Not a single high-level CEO has even been charged in connection with the financial collapse, much less been convicted and sent to prison, and most of them went on to receive huge year-end bonuses. Joseph Cassano of AIG Financial Products—known as “Mr. Credit-Default Swap”—led a unit that required a $99 billion bailout while simultaneously distributing $1.5 billion in year-end bonuses to his employees—including $34 million to himself. Robert Rubin of Citibank received a $10 million bonus in 2008 while serving on the board of directors of a company that required $63 billion in federal funds to keep from failing. Lower down the pay scale, more than 5,000 Wall Street traders received bonuses of $1 million or more despite working for nine of the financial firms that received the most bailout money from the US goverment.

Sachs had been heavily influenced by Keynes’s writings on the connection between hyperinflation and the spread of fascism in Germany after the First World War. The peace agreement imposed on Germany had sent it into severe economic crisis—including a hyperinflation rate of 3.25 million percent in 1923—which was then compounded by the Great Depression a few years later. With an unemployment rate of 30 percent and generalized rage at what seemed a global conspiracy, the country was fertile ground for Nazism.

When I asked one of Europe’s most influential economic policy makers recently whether the euro crisis really is over, he replied: “No, it’s just moving from the periphery to the core.” The argument is that while worries about Portugal, Greece, Ireland and Spain have become less acute, concerns about Italy and even France should actually be rising. The statistics for Italy, in particular, are shocking. Since the onset of the crisis in 2008, Italy has lost 25 per cent of its industrial capacity and the real level of unemployment is now, according to senior Italian officials, about 15 per cent. Italy’s scope for economic stimulus is limited by EU rules and by the fact that the country’s ratio of debt to gross domestic product is now more than 130 per cent. France’s economic statistics are less bleak but unemployment is still in double digits and the national debt is creeping up to the symbolic level of 100 per cent of GDP.

European unemployment has been concentrated among the young,