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III. From a weak recovery to a new recession?
Earlier threads:I. Are we headed for another crash?
II. What's driving the world toward a new slump?
The recent swings in world financial markets and the growing international effects of an economic slowdown in China have raised fears in the U.S. that the economic recovery could be on its last legs--even before working people felt like they had escaped the last crisis. And what will come next? In the first two installments of a three-part series, Lee Sustar looked at back at the causes of the last recession and at how China, Europe and other parts of the world economy have fared. In the final part, he answers questions about how the recession has impacted working people in the U.S., the prospects for the U.S. economy and the need for a political alternative in the face of a slump that will inevitably come sooner or later.
THE SLUMPING Chinese economy is causing huge problems for countries from Canada to Australia to nations across Africa and beyond. What impact will this have on the U.S.?
THERE IS a lot of happy talk about how the U.S. is immune to China's difficulties, and the prospects for continued growth in the U.S. economy are still good.
Certainly the U.S. stock market has radiated an image of prosperity. Equity markets have risen dramatically since the financial crash of 2008. As of June, U.S. equity markets were up by a combined total value of $17 trillion since then the worst of the crisis. Even after the big stock market drops in August, the S&P 500 index of stock prices was, as of late September, up about 163 percent from its recent low point.
We're told by the media that the stock market gains are a reflection of the overall health of the U.S. economy. There is an element of truth to that explanation: The Great Recession in the U.S. ended more than six years ago. After a period of stimulus spending, the Obama administration has sought to shape a U.S. economic recovery based on low wages, cheap energy and low taxes on business. In some ways, they've succeeded.
Read more: http://socialistworker.org/2015/09/30/weak-recovery-to-a-new-recession
