"I'm always intrigued when talking heads rush to comfort their viewers with news that the economy is bouncing back because, for that day, the Dow Jones Industrial Average may be performing well..." [LISTEN TO AUDIO]
BOSTON EVENT FOR MUMIA, APRIL 24: Friday, April 24th, 6:30 pm, Boston, MA: Great Hall, Codman Square, 637 Washington St, Dorchester, MA
The World To Come
The World To Come
THE WORLD TO COME
[col. writ. 4/9/09] (c) '09 Mumia Abu-Jamal
I'm always intrigued when talking heads rush to comfort their viewers with news that the economy is bouncing back because, for that day, the Dow Jones Industrial Average may be performing well.
The Dow is an average of the stock gains and losses of 30 major companies -- 30. Do you know some of those companies?
Well, you may not know you know, but here are a few that you may recognize: American International Group (otherwise known as AIG). General Motors (GM), and Citigroup, Inc. These companies are now trading at almost historic lows. AIG's shares sold at a price of $49.24 per share about a year ago - by midweek it sold for $1.08 per share; GM shares cost $24.24 several months ago, but it's around $1.93 now; and Citigroup's highest stock price in 2009 was $27.35, it's price-per-share on Thurs., April 9, 2009 was $2.70.
(Boy, I bet that made you feel a whole lot more secure, huh?)
The Dow Jones is a snapshot of a tiny fraction of the national economy, but even so, its rises and falls don't speak of the larger economic state.
By an reliable measure, the U.S. economy is not growing, but contracting. The jobless rate has recently climbed to the highest levels since 1983, and already this recession is expected to be the longest in 70 years!
If one looks around the world for countries with positive growth rates, two emerge (and neither one are in the West): China, and India.
Now, this is not to say they're not facing serious economic, social and political challenges. China's economy, driven largely by exports to the U.S., has dropped by 50%. Yet, internal economic activity, and other export production, may boost growth to 6% in 2009.
Most of Europe (like its American cousin) is looking at contraction -- not growth.
Before the most recent G-20 (group of 20 developed or growing economies) economic summit, when a subdued group met in Davos, Switzerland (2009), Russia's Premier Vladimir Putin lectured those present, and more ominously, called for an end to the present reserve currency system (the U.S. dollar).
Putin said, "Excessive dependence on a single reserve currency is dangerous for the global economy. Consequently, it would be sensible to encourage the objective process creating several strong reserve currencies in the future." *
The world's reserve currency (the U.S. dollar) is used both as a tool to trade in commodities, such as crude oil, and as an investment in itself, such as in Treasury notes (called 'T-bills')
Both uses send hundreds of billions into American treasuries.
To cut that off could spell an unprecedented fall in the value of the U.S. dollar, and send the American economy spiraling downward.
Today, as one of the world's biggest buyers of US Treasury notes, China is in a powerful position.
--(c) '09 maj
{Source: * Labour & Trade Union Review, Mar. 2009, p.4.}
