The struggle over who will pay for the growing economic crisis has begun. Across the world banks are collapsing and economies are heading into recession.
The US economy shrunk in the quarter from July until September. Gross domestic product dropped 0.3 per cent and consumer spending also dropped–for the first time in 17 years.
In Australia, despite Kevin Rudd’s assertions to the contrary, the fundamentals of the economy are little better than they are in the US. Many economists are now predicting the Australian economy will go into recession in 2009-2010, although they say it will be a short and painless one.
Of course, the pain is already being felt. Big employers like Telstra, Ford and the major banks all announced job cuts during October. It is predicted, as we discussed last issue, that there could be anywhere up to 500 000 job losses over the next 12 months.
Kevin Rudd announced a package of measures aimed at responding to the crisis. Most commentators, from the left and right, welcomed the package–arguing that it provides immediate relief to sections that are most in need and provides surety for the major economic players.
The reality is that the package was aimed at propping up house prices, building confidence in the stockmarket and increasing consumer spending.
In short, it is a package designed to shore up the capitalist system.
Leaving aside the potential futility of trying to save a system that has crisis at its heart, what we need is a package actually targeted at protecting living standards for the working class; measures that relieve the pressure on the working class, as job losses begin to pile up and housing continues to be unaffordable.
Such a set of measures is going to have to be fought for.
Wage disputes are increasingly becoming political battles–requiring people to resist the notion that workers have to sacrifice their living standards so that those that run society are able to stabilise the system that has created this crisis. Teachers in NSW (see page 11) are the latest to struggle for wages in the face of a public sector wage cap.
Along with the industrial disputes, there are real struggles continuing over government spending and policy. Nathan Rees, who took the reigns in NSW after Iemma and Costa were ousted by the movement against electricity privatisation, is now pushing for a partial privatisation of the retail outlets. The coalition that fought the total privatisation–rank and file Labor party members, the unions, the Greens and left activists–must fight this privatisation. The logic of fighting crisis with neo-liberal measures must be resisted.
There are no certainties in a period of crisis, except perhaps that the bosses and the government will seek to ensure that we are the ones who pay for the downturn in the economy. Now, as the crisis deepens, the struggle to maintain and improve living standards is a deeply important one.