Thirty years of decline

The world recession isn’t simply a result of risky activity, it follows three decades of industrial stagnation disguised by the financialisation of Western economies.

As the numbers reveal:

Between 1975 and 1979 US annual GDP growth averaged 4.6 per cent. These were the years of president Jimmy Carter, widely ridiculed as ‘stagflationary’. Carter himself gave a speech in 1979 in response to the oil crisis saying as much, though it doesn’t actually use the word, and it went down in history as the “malaise speech”. A year later the freebooting former actor and governor of California Ronald Reagan was elected to replace Carter. Reagan, a divisive figure during his presidency, is now lauded as the man who put America back on the map with a commitment to curb public spending and deliver economic growth. Unfortunately, the numbers don’t add up. Reagan was in office from 1980 until 1988. Between 1982 and 1990, the closest comparable period covered by the Survey of Current Business US average annual GDP growth fell from the 4.6 per cent of the Carter Years to just 3.6 per cent. From 1991 until 1998, a period that saw both Reagan’s vice president George HW Bush and ‘New’ Democrat Bill Clinton in office, average annual GDP growth fell again to just 3.1 per cent.

Despite their propaganda the financial class is actually risk-averse. Instead of investing in production the business class has divested itself of assets and spent years coining-it by rent-seeking. Doug Henwood and Daniel Ben-Ami have written pretty extensively on this stuff but it doesn’t get much of a look-in over here. Why? Any thoughts?

By the way, London, the world’s centre for currency trading, saw a 25 per cent drop in trades between April 2008 and 2009. It may be a while before the fantasy economy recovers.