Lurching from crisis to crisis

Yesterday on my home from the office I was listening to All Things Considered on NPR. The subject was an interview with Richard Anderson, the CEO of Delta Airlines. The host was asking him questions about the state of the economy as seen through the eyes of the airline industry.

Click here to listen to the interview.

Mr. Anderson said he thought one key to sustained economic growth was for Congress to get its act together when it comes to the sequestration, budget negotiations and raising the debt ceiling. His thesis was that Congress' inability to do its job with regard to these matters was slowing the pace of economic growth.

He made the point that the economy is doing better than the statistics imply. He pointed out that savings rates were up, that businesses were sitting on a huge pile of cash and that investment by US companies overseas was increasing.

The government needs to solve the sequester issue and the debt ceiling issue permanently. And regardless of whether you're a Republican or a Democrat, if you're in the leadership of the most powerful, wealthiest nation in the world, it's just not acceptable that we lurch from event to event every 90 days. And that's what's causing a lot of the angst in the economy. 2012, our economy in the U.S. grew at 2.8 percent, and it's 1.5 percent in 2013. And one of the factors, I believe, is that we need stability in the underlying funding of government and the debt ceiling issue. -- Richard Anderson, CEO, Delta Airlines

Ah, there is your problem, sir. The economy is just creeping along, not because of gridlock on Capitol Hill, but because of the inner contradictions of capitalism. Why are corporate profits growing? Could it possibly be because of increased automation and productivity and the accompanying elimination of jobs? Could it possibly be because workers' wages are growing (if they are growing at all) at a rate less than increases in productivity?

Corporations are sitting on mountains of cash because they aren't hiring new workers. All those folks sitting at home looking for work are putting downward pressure on wages. All that investment overseas means more and more good paying manufacturing jobs are leaving the US, leaving lower paid service jobs instead.

The result of all of this is decreased demand for goods and services which means lower economic growth. As wages and unemployment continue to stagnate the structural crisis in our capitalist system will continue to fester.

The goings-on in Washington are just a side show. The real crisis is hidden from view. Mainstream journalists, economists and politicians are more than happy to pontificate about partisan gridlock and who's getting the upper hand - just so long as no one questions any of the basic assumptions that underlie our economic system.

This current crisis has been some 40 years in the making and wouldn't have happened but for the cooperation between the two major political parties and the business and finance communities. The policies of both Democans and Republicrats have only served to weaken the labor movement and strengthen the hand of capital.

Until we decide to make a critical analysis of our economic system and to address those factors that lead to systemic crisis we will continue to lurch back and forth between boom and bust. Meaningful change will only occur when a critical mass of the population makes the decision to question the basic assumptions that underlie our economic system.

Now back to our regularly scheduled program...