There is now no question of capitalism's speculation-driven crisis being over, being an all-consuming, "we're all-in-it together" problem affecting bosses and workers together, or any of the other absurd myths that have been peddled recently. Every bit of evidence, appearing day after day, confirms what we have been saying in this paper and has been denied by banks and by government. This is a capitalist crisis and it is the clear intention of companies, banks and government alike, that the working class will pay for it. The youth unemployment rate, which is probably the best indicator of which direction both the economy and government policy are going, reached a record high of almost 20 per cent yesterday and, according to both economists and companies, is still expected to climb well into next year, if not beyond. Economic inactivity, those who cannot work for one reason or another, has soared to eight million - almost 21 per cent of the workforce, another record high. Yet, in the face of this dreary and desperate situation, all that the government can claim is that its action on the economy is making a "real difference." One is tempted to ask just what the government would consider a failure, if that is a success?
Around 2.5 million out of work, jobs continuing to collapse and vast numbers of public-sector jobs at risk and the best that Yvette Cooper has to say is that "the fact that unemployment is significantly lower than everyone forecast at the beginning of the year shows supporting the economy is making a real difference." GMB general secretary Paul Kenny reflected the reality of the case rather better when he pointed out that the figures really showed " a dismally bleak landscape for the jobless and their families as Christmas approaches, particularly for young workers struggling to get into the labour market." And what he was saying was reinforced by Chartered Institute of Personnel and Development chief economist John Philpott, who warned that relative improvement should not be interpreted as evidence that the labour market is returning to health, with male unemployment and long-term unemployment continuing to rise and youth unemployment now at a record rate despite a surge in the number of young people staying on in education to avoid the dole." This bleak outlook was not helped by the input of bank of England supremo Mervyn King, who, in his Inflation report said that the economic outlook remains "profoundly challenging" and warned that bank lending will be constrained for three years.
STUC general secretary Grahame Smith pointed out that it is essential that governments address the challenge of rising unemployment effectively through the ongoing budgetary process. Which will need more that the war on public-sector jobs that the Civil Service is facing at the moment. And it will need much more that the version of quantitative easing that the Bank of England is using to boost the money supply. Essentially, the Bank is buying back financial assets, including government paper and corporate bonds, from banks, to put money back into the economy and boost demand and growth. But that is merely pumping liquidity back into banks that are still refusing to lend. Even directly government-owned banks are failing to meet lending targets. If this crisis is not to be paid for out of working peoples' pockets, this policy must change, which means that the government must immediately cease its policy of leaving the nationalised banks in the hands of those who virtually bankrupted them and take direct charge so that the money available goes where it is needed, not where these failed riverboat gamblers would like to put it. Otherwise, the working class will pay for this crisis and keep on paying as long as the banks wish it.
A blog for the socially and politically conscious, written by a young, gay activist who strongly believes in equality and justice.