Michael Roberts, our economics correspondent looks at the prospects for the world economy in the year 2002. Barely a year ago, the world's leading economic and financial organisations and most economists predicted that the U.S. economy would grow by 3.5% in 2001 and by a similar rate in 2002. Considering that new data show an economy that is rapidly deteriorating right across the board, a final outcome of less than zero growth until year-end 2001 presently seems the best bet. The question now is not whether the world is in recession but how long it will last and how deep it will be. And yet optimism reigns in the stock markets as we start the New Year. This is the optimism of fools.
The overriding economic factor for the first half of this decade will be deflation i.e. an economy where prices are falling. Deflation is going to affect every area of the world capitalist economy, particularly profitable investments.
The ignominious collapse of Houston, Texas-based Enron is a powerful reminder of how "business as usual" is conducted in the epoch of capitalist decay and imperialism. This formidable downfall has had far-reaching effects, and there are many lessons that the working class can learn from it. By John Peterson, editor, Socialist Appeal(USA).
The collapse of Enron is the biggest crash in corporate history. In a matter of months the total share "value" of energy firm Enron, the seventh biggest company in America, went from $80 billion to next to nothing. Mick Brooks takes a look at Enron's so-called energy trading.
The US has just suffered the steepest decline in economic growth ever - from a breakneck pace of 4.1% annually in the years 1998-2000 to a negative 1.1% in the third quarter of 2001. But now most capitalist economists forecast the US is on course for what they characterise as a V-shaped recovery, and along with it, the end of the world recession of 2001-02. Our Economics Correspondent Michael Roberts looks at this theory.
On Wednesday March 6, President Bush imposed tariffs as high as 30% on most steel imports coming to the US from Asia and Europe. This will hit European steel makers hard, especially in Britain where there is a slump already in the steel industry. In periods of capitalist economic downturn, national interests predominate over international. Bush is supposedly a supporter of the "free market". But the Wall Street Journal called the tariff "perhaps the most dramatically protectionist step of any president in decades."
They think it's all over. The capitalist media is saying that the world capitalist economy, led by the US is recovering fast. Indeed, they say, there was no economic recession or downturn at all - or if there was, it was hardly noticeable. Michael Roberts investigates the truth of this idea.
Our economics correspondent Michael Roberts looks at the UK Finance Minister, Gordon Brown's budget, which was announced last week. He is going to raise taxes in order to spend more on the health service. But as he has no intention of changing the fundamental nature of the economy, a better health service must come from the pockets of the hardest-working labour force in Europe.
Our economics correspondent Michael Roberts looks at the British economy and the real situation facing workers in Britain today, which is somewhat different to the rosy picture painted by Tony Blair and his spin doctors.
The capitalist pundits are worried that the US and world capitalist economy is not recovering as they expected. Stock markets around the world are plummeting, investment spending is unusually weak and consumer spending unusually strong. This current capitalist economic cycle has no precedent in the whole post-war period. Yet this pattern has at least one ominous parallel before the second world war: the US economy of 1926-29.