Supplementary Reading　America’s New Recession

Another recession is hitting the U.S. As usual, working people are getting the worst of it, To add insult to injury, the corporate media tells us that the developing recession is a result of the September 11 terrorist attacks. Big business is exploiting this tragedy, using it as a cover for layoffs that actually began to accelerate last year.

While the terrorist attacks caused and are still causing enormous suffering including economic hardship for many workers, the problems with the economy began before September 11, as the serious big business economists admit: “…most (economic forecasters) believe that a recession was already under way before September 11.” (The Economist 10 / 20 / 01) And according to The Wall Street Journal, he direct destruction of property from the terrorist attacks has been only a fraction of the enormous assets in the US economy.” (10 /22 I 01)

While the aftershocks of September 11 hurt certain sections of the economy, such as airlines and tourism, these industries had weaknesses that predated the attacks. The biggest airlines (like American and United) were spending millions gobbling up competitors (like TWA) in order to monopolize markets. This coupled with the pre-September 11 decline in consumer spending due to stagnant wages, indebtedness and rising layoffs, created the need for the layoffs and cuts they’ve recently implemented.

What are the real reasons for the current recession? On one level, it's due to the weakness of the so-called boom years of 1995—2000. Huge amounts of borrowing, and extension of credit to both corporations and individuals, created a bubble of speculation and consumption. Financial speculation was in overvalued stocks, including the infamous dot-com start-ups, and in currencies and real estate.

On a more fundamental level, all the corporate borrowing was not resulting in much increased real investment in basic manufacturing, especially not US-based manufacturing. This was because the rate of profit in non-financial corporate sectors of the economy was falling during the 1995—2000 period.

The main reason for those falling profits was the large overcapacity created in basic sectors of the economy—for example, in the auto and communications sectors. Since profit rates were falling in some big, basic sectors of the economy, corporations tried for quicker and larger returns by investing in retail, services, and financial speculation. “Between 1995 and 2000, retail store space grew five times faster than the population.” (Counterpunch, 10 / 21 / 01)

Attempting to make up for low wages, workers have been increasingly burdened with record levels of indebtedness. According to the Wall Street Journal“…. household debt levels [are] at 15% of disposable income, their highest levels since 1986. Overall consumer credit, meantime, stands at $1.5 trillion—double what it was 10 years ago (10/22/01).” Personal bankruptcies soared, credit limits were reached, and wages wouldn't stretch enough for working people to buy all the goods and services. Big business profits by paying workers less than the full value of what they produce, so it is inevitable that the market will often produce more than workers can buy. When this recurring problem comes to the surface, capitalists cut jobs and wages even further in order to raise profit rates; but cuts only worsen the basic problem of overproduction.

As a result of productive overcapacity and squeezing the working class, US industry is now in a severe slump. According to an October 16th Federal Reserve report, US industry is in its longest slump since 1944—1945, and it is running at 75.5% productive capacity, the lowest level in 18 years. “The tall in growth and investment from early 2000 to early 2001 was the fastest since 1945, from 5% of Gross Domestic Product (GDP) to zero” (Counterpunch, 10 / 21 / 01). Most economists are now predicting a decline in the US economy of at least 1% of GDP for the last two quarters of 2001; that would “officially” constitute a recession (a recession is defined as two quarters of negative GDP).

The results for working people are already obvious; unemployment has reached its highest level since March of 1991, the end of the last recession. “And workers are also having a hard time finding new jobs ... the rise in the number of continued [unemployment compensation] claims for the week ended October 13 (is) the highest level in more than l8years.” (CNN, 10/25/01)

Since the post-World War Two upswing ended in 1973—1975, the world capitalist economy, including the US economy, has been in decline. The current recession is only the latest symptom. This long-term decline expressed itself even during the 1995—2000 economic boom. “Productivity growth was 15% slower in 1995—2000 than between 1948 and 1973… (and) in terms of GDP, of per capita GDP, wages and productivity; the Nineties did worse than the Eighties and the Eighties did worse than the Seventies.” (Counterpunch, 10/21 /01)

After years of refusing to use federal spending to boost the economy, Bush and the Democrats are using the preparations for war to push through a $100 billion stimulus package to boost the economy. However, this amount is unlikely to have a major impact due to a number of important factors. Unlike recent recessions, this slowdown is global, with serious commentators saying this could be the deepest recession since the 1930s.

The idea of an economic and political alternative to the periodic crises of capitalism is what socialism is all about. Calls for nationalizing airlines, pharmaceutical companies and the health-care system are appearing in opinion pieces in the corporate media. Whether the current recession and the war will make a lot of people question the system is an open question. But the facts reveal a system in crisis. As long as capitalism exists, economic crisis, terrorism and war will be the result, and working people will be the main victims.

Reading aids and expressions：

1. get the worst of it： to suffer a defeat or disadvantage 遭受失败或损失

1）I should not have exasperated him for I always have the worst of it. 我本不应该惹恼他，因为最后吃亏的总是我。

2）If you start a fight with Bill, you may get the worst of it. 如果你和比尔打架的话，你可能会被打败。

2. to add insult to injury： to make a bad situation worse for someone who has already been treated badly 雪上加霜，更糟糕的是

1）She not only deceived him but, to add insult to injury, allowed him to pay for her meal. 她不但欺骗了他，而且让他感到雪上加霜的是，她还要他付她的饭钱。

2）We set off late; to add insult to injury, our car broke down on the way. 我们出发得晚，更糟糕的是，我们的车又在路上抛了锚。

3. Big buinsess is exploiting this tragedy, using it as a cover for layoffs that actually began to accelerate last year..

在此句中

1) “big buinsess is exploiting this tragedy”是主句

2) “using it as a cover for layoffs that actually began to accelerate last year”是现在分词短语，作伴随状语，说明和谓语动词“is exploiting”同时发生的动作，其中，“that actually began to accelerate last year”是个限制性的定语从句，修饰名词“layoffs”

4. While the terrorist attacks caused and are still causing enormous suffering, including economic hardship for many workers, the problems with the economy began before September 11, as the serious big business economists admit …

在此句中

1) “the problems with the economy began before September 11”是主句

2) “While the terrorist attacks caused … economic hardship for many workers”是个让步状语从句，修饰主句中谓语动词“began”

3) “as the serious big business economists admit”是个方式状语从句，也修饰主句中谓语动词“began”

5. While the aftershocks of September 11 hurt certain sections of the economy, such as airlines and tourism, these industries had weaknesses that predated the attacks.

在此句中

1) “these industries had weaknesses”是主句

2) “while the aftershocks of … airlines and tourism”是个让步状语从句，修饰主句中谓语动词“had”

3) “that predated the attacks” 是个限制性的定语从句，修饰名词“weaknesses”

6. This, coupled with the pre-September 11 decline in consumer spending due to stagnant wages, indebtedness and rising layoffs, created the need for the layoffs and cuts they’ve recently implemented.

在此句中

1) “This created the need for the layoffs and cuts”是主句

2) “coupled with the pre-September 11 decline … layoffs”是个过去分词短语，作状语，说明谓语动词“created”的方式

3) “they’ve recently implemented”是个省略了关系代词“that”的限制性定语从句，修饰两个名词“layoffs”和“cuts”

7. Big business profits by paying workers less than the full value of what they produce, so it is inevitable that the market will often produce more than workers can buy.

这是个由并列连词“so”连接的并列复合句，在此句中

1) “big business profits by paying workers less than the full value of what they produce”是第一个分句，其中，“what they produce”是个由连接代词“what”引导的从句，作介词“of”的宾语

2) “it is inevitable that the market will often produce more than workers can buy”是第二个分句，其中

a) “it”是形式主语，真正的主语是由连词“that”引出的从句“that the market will often produce more”

b) “than workers can buy”是个比较状语从句，和前面的“more”一起，构成比较。

8. push through： to cause a plan, suggestion or bill, etc. to be officially accepted or put into use使(计划、建议、议案等)获得通过; 使 … 被采纳

1）Then Gingrich started to push his policies through Congress, and things picked up于是，金里奇开始做工作使国会采纳他的政策，此后事情就出现了转机。

2）The president is trying to push through various tax reforms. 总统设法使他的各种税改方案获得通过

9. Unlike recent recessions, this slowdown is global, with serious commentators saying this could be the deepest recession since the 1930s.

在此句中

1) “this slowdown is global”是主句

2) “unlike recent recessions”是介词短语，作方式状语，修饰主句中的谓语“is global”

3) “with serious commentators saying this could be the deepest recession since the 1930s”是个由介词“with”引导的复合结构，其中“this could be the deepest recession since the 1930s”是个省略了连词“that”的从句，作现在分词“saying”的宾语

Questions：

1. Why were the terror attacks blamed for the economic recession?

2. What were the real causes of the economic recession?

3. What lay behind the declining consumer spending?

4. Why didn’t the corporations invest the borrowed money in basic manufacturing?

5. Where did the corporations put the borrowed money?

6. What led to the decline in the profitability in some basic manufacturing industries?

7. What do people do when they try to maintain their consumption while their income drops?

8. What do the low wages and the cut in employment contribute to?

9. How is economic recession defined?

10. In the author’s opinion, what should be done so as to get rid of periodic economic crises?