Economy

The bosses are pushing ever harder for workers to return to work. And the Tory government is giving them free rein to restart the economy without the necessary safety measures. The labour movement must organise a fightback.

In a report released on 29 April, the ILO forecast that 1.6 billion workers in the informal sector will lose 60 percent of their income after one month of the crisis. In the worst-affected countries, poverty rates among informal workers will increase to 84 percent. As the crisis bites, workers in insecure work will face disaster.

The coronavirus pandemic has exposed the underlying contradictions of capitalism, triggering a deep crisis on the scale of the 1930s. There will be no rebound after the lockdown ends, but a prolonged economic depression.

The IMF declared at the beginning of April that we have entered into “the worst economic downturn since the Great Depression”. Yesterday, their perspective was confirmed when figures released for the US showed a rate of 4.8 percent decline. Today, the figures are out showing a 3.8 percent contraction in one quarter in the Eurozone. The disastrous handling of the coronavirus pandemic sharpened an economic crisis that was already in the making.

The pandemic spreading across the world has triggered a global recession. The ruling class is scrambling to find means of cushioning this savage blow to the economy. In their desperation, they are breaking all the rules that have governed their policy for the past 80 years. The capitalist system is facing its worst crisis ever.

The prospects for the world economy are growing grimmer by the day. Governments are throwing everything they have at the situation. But they have run out of ammo fighting the last crisis. There is no way out under capitalism.

In the latest episode of Marxist Voice, a series of livestreams created by the British Marxists at Socialist Appeal, Rob Sewell (editor of Socialist Appeal) discusses the global economic crisis that has been triggered by the coronavirus pandemic.

In the depths of the 2008 crisis, Beijing rescued world capitalism. The fiscal stimulus they carried out was the largest in world history, at over £500bn. Had it not been for this stimulus, and the global demand it created for raw materials and other goods China needed as a result, the financial crisis would have been an all-out depression. The crisis unfolding before our eyes is far more serious than that of ten years ago. Yet this time, China will not be able to rescue the world, let alone its own economy.

Yesterday's Budget announcement by Tory Chancellor Rishi Sunak attempted to calm the capitalists’ fears with promises of extra spending and stimulus. But British capitalism faces a perfect storm, and the Tories’ promises will soon turn to dust.

The coronavirus has become the catalyst for a crash on the stock markets, with drastic slumps everywhere on ‘Black Monday’. The recent epidemic is a historical accident that has exposed the deep sickness in the capitalist system, which at any moment risks tipping into an even-deeper recession than 2008, Rob Sewell (editor of Socialist Appeal) explains.

The latest outbreak of coronavirus has caused the biggest wave of stock market losses since 2008, wiping $5tn off share values worldwide. Markets are worried that the virus will have a serious impact on an already weak world economy. These fears are not unfounded.

The out-of-touch elite are meeting in Davos this week for their annual exclusive shindig. But the mood amongst the super-rich and their representatives will be glum and gloomy, with their liberal world order facing threats on all fronts.

In August, the expected yield for ten-year Treasury notes fell below the yield for two-year notes for the first time since 2007, with the 30-year bond yield also reaching a new low. The “yield curve” tracks the yield to investors who purchase shares in government debt to be paid back over various time horizons. The national debt accrues as the US Treasury sells Treasury securities in exchange for cash used to finance the government.

Business news headlines recently bemoaned the incidence of “bond yield inversions” in a series of countries as the supposed harbinger of doom and destruction. Many working-class people were left scratching their heads about what on earth this all means. 10 years after the “Great Recession”, many could be forgiven for thinking that we have been living in permanent recession and things can’t get any worse. The reality is that, while things have not been good in most countries, things can also get far, far, worse. In this article, we will explain why.

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