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Issue # 1402      11 March 2009

Gaping depths

Gareth Costa in the West Australian on February 21 gives revealing figures in the graph of rates of US and Australian government debts to GDP which show the gaping depths of the global crisis.

The rate for US government debts over GDP is nearly 300%, compared with the worst of 1930 of 250%. The Australian figures showed only 70% in 1930, but are now at 170%. In both cases there are declining GDPs and increasing debts from bailouts, so they are moving into critical positions. The US budget is in deficit by about 5.8% of the GDP.

Other major economies have dropped their GDPs: the EU by 1.5% by end of 2008, the US by 1.3%, Japan by 3.3% and Germany by 2.1%. They have all bailed out banks hit by the crisis.

The shadow economy is 10 to 12 times greater than the world GDP.

Sitaram Yechury of the Communist Party of India (Marxist) pointed out that US employment growth was lower than GDP growth.

The purchasing power of the vast majority was declining. While the bottom 50% of the poorest had 13.4% of US average income in 2004, it had fallen to 12.8% in 2008. Costa pointed out that the household equity in 2005 in the US was $14.5 trillion, but down to $8.5 trillion in the last account.

The capitalist states are looking for a way out of the crisis by loans to collapsing banks in a de facto nationalisation, with in some cases efforts to build up the consumer market.

While Obama is trying to get out of the Iraq war, he wants to increase the commitment to the Afghanistan war. Australia will go with him.

Obama is planning to use only US steel for repairs to bridges and other infrastructure. This is understandable when steel production in the US is only at 43% capacity. Australia is protesting at the breaking of the US-Australian free trade agreements as the US is our biggest steel importer.

Russia has had a 13% fall in industrial output in five months, including cars. In order to try and protect the auto industry the Russian government has put a 30% tariff on foreign cars to slow down imports.

India and Vietnam have put a tariff on steel imports and Indonesia is applying special licences to choke off imports. In the desperate struggle to protect home markets, tariffs will be rebuilt and surplus goods will be dumped on markets. The free trade agreements and the World Trade Organisation will be under increasing pressure.

We must look for a different way to find a solution for workers. They have already started to do it themselves. The Argentine workers took over when factories were closed, and successfully continued working them profitably; 400 US factory workers took over when their factory was closed and stayed there until they won their overdue wages and redundancies; Irish workers occupied the Waterford Crystal Factory, fighting against 480 sackings. Unite, the union representing the workers, called 3,000 workers together in solidarity.

And who can forget the mass picketing that stopped Patrick stevedores from forcing the Maritime Union off the waterfront using strike-breakers and dogs?

Such struggles by workers to defend their rights will increase. They need to be organised, to be coordinated, so that the taking over of factories, of railways, of the streets can become the taking over of society, of ending the cause of greed and endless global crises.

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