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Truthout - September 30, 2019

"It is important to notice how leaders carefully, consistently avoid any critique of the capitalist system and its internal structure for generating yet another economic downturn in its long, long history of doing that repeatedly. That absence speaks very loudly once you note it. The lack of a systemic critique soon becomes routinized. The public is, in effect, trained to see only the external, conjunctural conditions of, and influences, on economic downturns. The taboo applied generally to systemic critique in capitalism then covers the public discussion of capitalism’s regular, socially disruptive and immensely costly systemic instability."

Leaders around the world increasingly worry about the next capitalist recession (or economic downturn) now looming globally. In Europe’s strongest economy, Germany, a recession has already arrived in all but formal naming. U.S. manufacturing has declined for the last two quarters. Negative interest rates (where lenders pay borrowers to safely make a loan) are an increasingly widespread sign. Another sign is that lenders charge higher interest rates for short-term vs. long-term loans because they fear an impending recession will make borrowers’ ability to repay riskier in the short term. Anxieties about safety reflect the sense of an impending economic crash.

Trump is perhaps the most worried among world leaders fearing recession. Having made the economy a central issue for his re-election effort, he needs the U.S. economy to be in “great” shape. He repeats the few statistics available to support such claims. Yet Trump’s fears of a looming recession and its possible consequences for his 2020 re-election are also evident. He recently branded the man he made chair of the U.S. central bank, Jerome Powell, an “enemy” like the leader of China. Powell’s refusal to cut interest rates drastically – a classic tool to slow or postpone a recession – was Trump’s target. Trump recognizes, as other leaders do, that their political futures hinge on the next recession: on when it hits, how bad it gets, and how long it lasts. Recessions have always haunted the leaders of countries where capitalism is the prevailing system.

The basic cause of current and past downturns in capitalist economies is the system itself. It has been plagued by and subjected its people to the plague of cyclically recurring economic downturns for the last 250 years. They happen on average every four to seven years, although particular conditions of time and place can occasionally make the period longer or shorter. They happen wherever in the world the capitalist system came to prevail. As that prevalence became global, so too have the cyclical downturns. ...
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