The global Depression is the result of the US sub-prime crisis, It was directly caused by Bill Clintons enthusiastic signature on the Republican Gramm-Leach-Bliley Act. Saying “Today I am pleased to sign into law S. 900, the Gramm-Leach-Bliley Act. This historic legislation will modernize our financial services laws, stimulating greater innovation and competition in the financial services” and with the stroke of a pen Clinton (1) unleashed predatory banks and lenders by repealing regulations put into place in the 1930′s to prevent another depression.
The expected happened. The housing bubble inflated beyond sustainable limits and then exploded, creating havoc in the markets, the current Depression and massive, intractable unemployment. Five years after the crisis unemployment remains steady, hovering around 15%.(2)
Clintons Depression is a global problem and there is no recovery on the horizon. That’s true for the US, for Japan, which has been in a slowdown crisis for over a decade, and for growing areas of Europe . A slowdown is deepening even in China, the engine of global economic activity (3). The Depression is a crisis of over-accumulation of profits by business owners due to union busting and austerity. The rich, whose income soared obscenely (4) because of deregulation and union busting, are in hoarding mode (5), refusing to invest well over $10 trillion in hoarded wealth back into the economy. Meanwhile, austerity and other measures to increase their profits are driving up unemployment, homelessness and poverty.
Banks have been largely successful in recovering their assets by transferring their debt to governments through means like TARP and other giveaways which in the US alone amount to gifts of over $7.7 trillion to the rich. (6)
Today growth is slowing across the globe and in all the main sectors of the economy. The Eurozone is the weakest link in the capitalist world and it’s unfolding collapse will bring down the US, China and all the rest.
The good news is that people are fighting back. Revolution is sweeping across North Africa, Iran and Iraq. In Europe movements like the indignados are growing. Here in the US we saw the explosion at Madison and on the West Coast docks, the heady growth of the Labor left and Occupier groups.
All this is occurring with the rapidly escalating and at this point unstoppable global ecological crisis as a backdrop.
The conditions are in place for a main force battle between workers and the rich and no one will be unaffected by that as it unfolds.
Centrists will soon have no place to hide.
(1) http://www.presidency.ucsb.edu/ws/index.php?pid=56922#ixzz1z3tXAzzxIt repealed