New year, old music, from a well-known score sheet played out by... the Left. A "Left" that’s not ashamed to dress itself up in populist clothes, worn in the service of state capital on the understanding that this is the way to open up markets as a "progressive realisation of the patriotic ideal and the concept of nationhood". In the name, of course, of the people and the "concept of community" as understood by those who are ready to recite the hidden virtues of a renewed "capital-socialism". The same idea — here we have another nationalist boast! — that was born no less than in IRI (Fascist) Italy and exalted as a "model envied and studied by everyone in the world" as an alternative to capitalism. So now China enters the scene with its ‘progress’ attributed ”to state intervention in the economy and strong centralised planning". This must be the miraculous recipe for "fighting" poverty: "work (a lot) and decent wages" for everyone. Let the state invest capital immediately to make a profit tomorrow…

So, even though the Chinese railway system is weighed down by a debt of more than $750 billion we too want high speed trains (listed on the Stock Exchange), which would liberate the "socialist" market from having to import goods and signal the introduction of high-tech productivity and robotics. Thus, we get a "socialism" which respects the fundamental capitalist relations of production. For the rest, all we need to worry about is establishing advantageous "currency hooks for the export of goods" (?) without any external constraints: this is how socialism can be realised!

In the meantime, the New York Times informs us that — following the maxi-cut in taxes demanded by Trump for the benefit of industrial groups and the elite of Wall Street — the federal government needs to prepare for a revenue shortfall of hundreds of billions of dollars over the next decade. So far the budget deficit has gone up more than 50% since Trump took office and is expected to reach $1,000 billion in 2020, in part as a result of this tax law.

This means a cut in the corporate income tax rate from 35% to 21%, even though in 2018 the US recorded a sharp drop in tax revenues, worsening the already high budget deficit and confusing those who (from Mellon's theories to the Laffer curve) argue "scientifically" that applying a light tax regime allows large companies to increase investments, jobs and boosts consumption. But investments continue to decline, especially in the manufacturing sector, while international trade is in obvious difficulty. The worsening of the US balance of trade, not only with China, must not be overlooked since this feeds Trump’s threats of tariffs. US exports grew by 7.7% but imports rose by 8.4%. When goods alone are considered, the US deficit increased from $659 to $732bn (+$73bn). The negative balance of trade with China increased from $309bn to $344bn (+$35bn), a figure amounting to 47% of the total deficit; whilst the deficit with the Eurozone increased from $105bn to $124bn (+$19bn). The deficit improved against Japan (from $58bn to $56bn) and South Korea (from $19bn to $15bn), whilst worsening with Germany (from $52bn to $56bn); Mexico (from $59bn to $67bn) and Canada (from $14bn to $18bn). As for the US balance of trade with Italy, this is stationary (around $25bn).

With their policy of low interest rates, the Central Banks have unsuccessfully tried to counter the financial crisis that has tormented them since 2008. Their aim is to encourage an expansion in production (and related consumption) but this has actually prolonged the crisis which is basically the origin of financial collapses. Recently there has been a shift in gear, with higher interest rates and not so much exceptional liquidity injected into the financial system. Otherwise, in the case (now almost certain!) of another "recessive" fall on an "economic" level, how would you manage to bring interest rates down to zero, if they already are? (A "measure" that’s already been tried ...). Amid Trump’s denunciations and hysterical egocentric crises the monetary policy flips reveal an American Fed that doesn't know which fish to catch, especially as both hooks and bait are scarce. The growing debt (public and private) and emphasis on financial games — favoured by Trump — are entangling it in deep water without the slightest whiff of oxygen.

Since its policy of monetary stimuli was greeted by widespread euphoria the Fed has tried in vain to invent new strategies involving the use of illusory interest rate manoeuvres. Meanwhile the companies listed on Wall Street indulge in games based on the financial logic of His Royal Majesty, King Capital.

In the meantime, some research by the Brookings Institution (a "liberal" organisation which supported the Bush administration and therefore is certainly not "left") has been disclosed, which, together with a subsequent report by Axios, paints a picture of the US labour market and raises many concerns. By standardising the statistical methods of the past (pre-1994) with those recently adopted, unemployment would be 21% and not 3.55%. Almost 50% of (current) jobs are low waged, “without subsidies and within sectors that are in the process of being automated". Inflation would also be much higher. This is while Trump boasts of a constant increase in workers' employment in the United States and an unemployment rate that has been at a minimum for decades.

Our economy is number one. The whole planet envies America and the best is still to come!

Yet the stark reality of the numbers also shows that 53 million American workers — about 44% of the total workforce — work in places with an average hourly wage of $10.22 and an average annual wage of $18,000. Furthermore, about a quarter of these low-wage workers are the only ones earning in their families. The low quality of the jobs that tend to be created is also emphasised, "without benefits or fixed working hours", such as in retail, catering, home health care or the shadow economy. Therefore, a "shrinking" labour market, especially among the "minorities": according to the Brookings study, 54% of black workers and 66% of Hispanic workers are on low wages, compared to 37% of white workers. And looking ahead, low-wage jobs in the retail and catering sector are amongst those with the highest automation potential. In addition, more than 80% (BLS — Bureau of Labor Statistics — data) of the new jobs are part-time (3/6 months contracts) in the catering and fast-food sectors with a weekly wage of $351. Moreover nearly 250,000 full-time positions have been lost lately.

Broadening our outlook to the world as a whole, we encounter an international proletariat which — according to data published by the ILO (International Labour Organisation) — comprises about 3.3 billion wage workers, that is 58% of the world population. Almost two thirds of them are engaged in "informal" jobs, that is without "trade union rights" (no set hours, payment for holidays, sickness, pensions). The official unemployed are calculated at over 172 million, while there are around more than 2.2 billion adults who do not carry out or seek any work. On the other hand, capital would not count the lowest paid whose work does not make any profit. Within this already highly tragic “panorama” of human conditions under the capitalist order, there are (last figures these) about 1.2 billion human beings who drag out their existence without enough food and without drinking water; more than a billion and a half live in areas without sewers and water channels: the spread of diseases (dysentery, cholera, typhus, etc.) keeps infant mortality very high. This is capitalist development…

From the complex of data provided by these researches, it is therefore clear that more than 60% of the global workforce is unemployed; some are content with occasional jobs with real starvation wages. So-called "instability" predominates everywhere, partly due to the accelerated cycles of restructuring of production processes, by which capitalism tries to slow down the crisis which instead is getting worse every year. (In the last seven/eight years 7-5 percentage points have dropped from the recorded GDP of "strongly developing" countries such as China, Russia, India, Brazil: the first of these in "capital-socialist" clothes!)

Still on the subject of unemployment, we would like to point out that the so-called "European standardisation" has also set new statistical parameters which record as “employed” anyone who has worked for very short periods, even for an hour a day! Only those who come to an employment agency, from whose lists — after 4 weeks — they disappear, are classified as official unemployed.

And we conclude with a quick glance at that other great imperialist power: China which is struggling to increase its monetary reserves (at present about $3 trillion). For this reason, the banks' compulsory reserve ratio has been lowered by one percentage point, reflecting evident alarm for the level of China's total domestic credit, which exceeds 250% of GDP, that is more than $34 trillion dollars (84% in the private sector). Suffice it to say that in 2008 that credit stood at 148% of a lower GDP: a nice dynamic! Beijing's "boast" remains that in the same period "accumulated" savings are equal to 492% of GDP. Capital in the service of "Chinese socialism".

Wednesday 8th January 2020.