(1) The New York Times ran a story on August 30th under the headline “Dow off 72.01 to Conclude Its Worst Month in Seven Years.” It begins, “July giveth and August taketh away. That was the story at the end of the trading yesterday, after all the gains made in July, the year’s best month for the Dow Jones Industrial average, were surrendered in August, its worst monthly setback in seven years.”Increasing volatility has characterized the financial markets for some time, but extreme behavior of this kind can hardly be considered routine and more likely portends a break in the trend. In times gone by it would probably have been safe to predict a market collapse somewhere along the line, but times have changed and this no longer seems inevitable. The financial elders have learned a lot about crisis management since the near meltdown of 1987, when Alan Greenspan, relatively new to his job at the Fed, pledged unlimited central bank support for a beleaguered credit structure. What seems more likely today than a market collapse is a gradual slowdown as the economy moves from moderate expansion to creeping stagnation. We recognize of course that by the time these notes are in print they may make us look foolish. It wouldn’t be the first time.
(2) The teamsters’ successful strike against the United Parcel Service is an event of an entirely different order. It confirms what many have been saying, or hoping since the recent change in leadership at the AFL-CIO, after more than a decade of decline and defeat, the labor movement had finally woken up to its traditional tasks of protecting workers against the savage depredations of capital that characterized the Reagan-Thatcher period. The full story of the planning and execution of the strike has yet to be told, but enough is known to justify the claim that the whole operation was meticulously prepared and effectively carried out. The purpose was clearly to announce to the world that the recovery of the American Labor movement is no longer just a project but an accomplished fact. The UPS was the perfect target. It quite literally exists everywhere in the country, in rural areas as well as in the cities. The brown delivery vans are a familiar every-day sight, and many people are on friendly terms with their local drivers. The objects of the strike, particularly those relating to the creation of more full-time jobs with relatively good pay and benefits, were generally popular. Inconveniences inflicted on customers, which affected not only business but also tens of thousands of individuals, put increasing pressure on the company to settle. All in all it is hard to imagine a strike situation more favorable to the workers’ cause. Add to this the fact that from the beginning the teamsters received whole-hearted support from the AFL-CIO and many local unions, and you will understand why the company caved in so rapidly.
There is no doubt that the UPS strike accomplished its purpose. The labor movement is back. The change signaled by the election of new leadership is real. A new era in the perennial struggle between capital and labor is beginning.
That’s the big news, and it s very good news indeed. But it needs to be qualified and tempered by many considerations. We hope to return to some of these in future issues.