Empire in crisis: 2009 could become the year of strikes and social conflicts in the U.S.

Dec 23 2008 @ 06:34pm
Por: Felipe IV
Publicado en: English
A scenario full of labor strikes in 2009 and social conflicts in the U.S. Empire is not being taken out from a novel by Jules Verne, but (apart from the global crisis) from a logic and emergent projection of unemployment unleashed by the industrial and corporate recession in the US, for which nor the Bush administration neither the new one with Barack Obama have solid solutions.

The few days before Obama assumes his charge as President of the First Global Power, and the days left before his presidency ends 4 years from then, will be marked by a nightmare: the bankruptcy of many businesses and massive unemployment that has removed from scene to the financial collapse and the stock market collapse.

The social crisis (as consequence of the drop in consumption and labor lay offs) is shaping as an emergent potential of the recessive crisis - a labor crisis that exploded gradually as consequence of the financial crisis in the US.

Which by now seems to be a fantastic scenario for the northamerican empire (labor strikes and social conflicts) is a short term scenario that analysts are starting to deal with as well as mass media are doing when reporting about the car industry crisis and business bankruptcies that are unleashing an increasing wave of massive lay offs in the US.

Each day of the north american economy has become a vertigo marked by an unavoidable dynamic: industrial and retail recession with a drop in consumption and massive unemployment that projects from the US to the central countries to the peripheral world "underdeveloped" and/or emergent.

At this time, media and analysts in the US agree that unemployment (as an emergent cause of industrial recession) has become a top priority in Obama's agenda and for his team.

Under pressure by the "conflict fronts" (internal and external) that inherits from the Bush administration, the elected president of the US, Barack Obama, has for these days a major obsession: Assume the presidency on January 22nd and accomplish his mandate without labor strikes nor social conflicts in the US.

The numbers about the evolution of unemployment in the US are so negative that team of experts created by the elected president, Barack Obama, to fight against this crisis was forced to expand the goals they have traced just one month ago.

During his campaign, Obama commited to "save or create" a million of new jobs in a non-defined term. After beingl elected president, in a speech give a month ago he recognized that economic outlook are so difficult that he proposed he will save 2,5 million jobs in less than two years.

After a meeting of four hours with his economic team, last Tuesday in Chicago, Obama expanded his goal to 3 million jobs. According to the forecast by some specialists, unemployment in the US will increase from the current 6.7%, which by the way is the highgest in the last 15 years, to 9% in a 12 months period.

In this scenario, for Obama advisors, it would be a victory to keep that rate under that number, states The Wall Street Journal.

While recession is worsening, Obama is force to increase the amount of his "bailout plan" from $150,000 million during his campaign to a new one of $800,000 million.

The truth is that Obama, without any kind of "management experience" in the supreme possition of the empire, after ending his "progressist" speech for campaign, now deals with a complex reality marked by economic, geopolitic and military conflicts - now in "stand by" that threats to ignite in an eruption in any moment.

Iran, Afghanistan, Iraq, Middle East, Caucasus and the "cold war" with Russia feature cleary in Obama's agenda, while the recessive economic crisis can turn into a nightmare his four years in the White House.

A couple of weeks ago, the financial crisis protagonism faded and opened a space to new stars: business bankruptcies and massive lay offs.

The banking and car sectors head the list of this crisis that spread all over the geography of the first imperial economy.

To the lay offs in the banking, car and great retail stores and consumption centers, this week adds the lay offs in the financial sector which mark a "massive" trend of the process.

This way, unemployment has become a key priority for Obama's team and the establishment of power in the US who fear that this spreading turns the US, the first global power, in a field for labor strikes and social conflicts that end halting even more the economy.

According to The Wall Street Journal, Obama and his environment were impacted with the rejection by the Congress to his request for an "urgent bailout" to the three major car makers in the US with headquarters in Detroit: Ford, General Motors and Chrysler.

But the dangers pursuing Obama before he takes charge of the presidency of the US not only are limited to the car industry.

According to The Wall Street Journal, the executives that lead this companies ranging from retail stores to the giants in the public sector are reinforcing their defenses by shrinking thei expenditures of capital, postponing the building of new plants, laying employees off and limiting any raise in wages.

Executive presidents participated in a meeting in The Wall Street Journal CEO Council, to anylize the main challenges awaiting for the new government to be led by Barack Obama.

Issues like health, energy and environment occupied a featured place in the agenda, althought anyone of them overcome that of the business bankruptcies as the "major concern" for the executives, published the Journal.

Signs are more than clear: Financial crisis has derived in recession and threat (as an effect of unemployment) to become a social crisis of difficult outlook in the US.
The US economy is collapsing in a speed much faster than expected just a couple of weeks ago. This suggests that recession will be much deeper and persistent than previously feared, pointed the Journal.

According to the US Deparment of Commerce, exports that until half of the year served to keep the economy afloat, dropped 2.2% in October at the time foreign demand of US goods continued down hill.

Trade deficit, on the other hand, increased in October to $57,200 million, compared to the $56,000 million of September, despite that oil became cheaper. Total value of exports and imports was the lowest since April, a clear sign of the recession the country is enduring, according to the Deparment of Commerce.

In all 2007, the negative numbers in the US trade balance was about $700,000 million and this year is now $709,100 million.
In other news, the US Department of Labor informed that the current global recession brought in November an unprecedented drop of 6,7% in prices of goods and services importe, and one, also unprecedented, drop of 3,2% in the value of US exports.

The total value of the commercial trade - imports and exports - of the US in Octover was $360,000 million and is dropping every month from the $371,844 million in April. Between January and October this year, the deficit has been $590,917 million compared with one of $582,808 million in a similar period next year.

The economist who parcipated in the las poll of The Wall Street Journal stimate in average the GPI decline that started in July, will continue the next two quarters of 2009. If they are right, it would be the first time that the US economy contracts during four quarters round since after postwar.

USA, this way, woul experiment a 18 months recession, the longest period since the Great Depression. Recessions in 1973-75 and 1981-82 last 16 months.

If that weren't enough - points The Wall Street Journal - , the end of the recession probably will not mark the end of unemployment in the US. In previous recessions, the contraction in the labor market continued during many months after the official declaration of the end of recession.

The trillionaire "bailout plans" for the banking sector with money of the tax payers had no effect to cure the disease and failed miserably as measure to counterattack the global crisis that derived from financial to recessive at a global scale.
The US Federal Reserve and the mighty central banks of the US and Europe (masters of the international financial capitalism) failed and are impotent to generate another alternative to end with this situation no different than the failed "bailout plans" oriente exclusively to "save the banks" (beside of doing business with the crisis) in disregard of the productive and social sectros that suffer the most lethal effects of the collapse of the globalized economic system.

The disregard and the lack of concrete measures to "save" the productive sectors (above all with te reactivation of credit) has deepen to unprecedented levels the collapse in consumption, and consequently already impacted in a process of massive labor lay offs around the world.

At the end 2008 the US economy faces an unfair and combined three processes that feedback and complement: the financial crisis, the recessive crisis and the labor crisis that starts to develop as consequence of lay offs and wage cuts.

The principal economies of the world (according to official numbers) are in recession, the consumption drops, labor drops, exports drops, imports drop and prices increase mildly (to compensate the drop in sales).

Unemployment is the key element, the strategic detonator, that marks the start for the development of the social crisis.

At the time that financial bailouts accumulate, economists no longer get to explain why until now anything seems to had avoided a deeper recession.

The failur of the bailouts and the no-solution of the economic-productive crisis has a cost: the worsening of the recession with unemployment at global scale.

Economists in JP Morgan calculate that the global economy will contract at a annual rate of 3,7% in this quarter and at one of 2,3% in the next three months of next year. This possibly will constitute the first worst six months for the global economy since World War II.

With this scenario, massive lay off of workers and employees in the US are the standard and mark the momentum en which the crisis starts to leave the economic financial "superstructure" to get into the american society, the real economy.

Unemployment, it doesn't matter if it is the underdeveloped world of in the US Empire, is an edge instance, where the top priority is the survival of the individual and his family.

It is no longer a matter of the lost of purchase power by the increase in prices, but the disappearance of the salary and the ability for consumption with the social implications implicit.

An unemployed (who has lost his universe of consumption and survival, incluiding that of his family) no longer can be contained with "financial injections" nor with "welfarism", it requires of a structural solution (the restablishment of job and salary).

With this in mind, a scenario full of labor strikes in 2009 and social conflicts in the U.S. Empire is not being taken out from a novel by Jules Verne, but (apart from the global crisis) from a logic and emergent projection of unemployment unleashed by the industrial and corporate recession in the US, for which nor the Bush administration neither the new one with Barack Obama have solid solutions.

And this explains why unemployment has become the worst nightmare for Barack Obama.