Challenges for the working class
The coming U.S. economic crisis
Rising prices. Growing unemployment. For millions of workers across the United States, times are tough—and getting tougher. For those already without jobs and living in poverty, the last decade of cutbacks in social programs has meant ever-growing hardships.
Before Hurricane Katrina ravaged the Mississippi delta, economic forecasts were, on the whole, rosy. Now, the story has changed.
“Katrina pushes unemployment rate higher,” the AP reported on Oct. 7. “Katrina contributes to drop in spending,” read an Oct. 1 Washington Post headline.
There is no doubt that the devastation caused by Hurricanes Katrina and Rita will ripple throughout the U.S. economy. The Congressional Budget Office estimated that 279,000 people lost their jobs due to Katrina alone. (AP, Sept. 29) That number may grow. The hundreds of thousands who fled the region to other parts of the country mean that the unemployment crisis will not be regional—it will be felt around the United States.
But the weaknesses in the U.S. economy uncovered by the hurricanes are not the result of a natural disaster. They are symptoms of the capitalist economy, characterized by economic booms followed by crises of overproduction.
In fact, signs of trouble for the U.S. economy could be seen in the months leading up to the September hurricanes. On July 22, U.S. Federal Reserve chair Alan Greenspan warned of “significant uncertainties” about the economy.
Rising Energy Prices
An obvious sign of the “uncertainties” that the U.S. top central banker referred to is the rising price of oil and gasoline. The price of a barrel of crude oil has risen from an average of $31 in 2003 to peaks of over $70 in September. Unlike the economic data usually far removed from workers’ day-to-day reality, soaring gasoline prices—in some cases to over $3 per gallon—and impending heating-oil price hikes are being felt by millions....