THE ABCs OF THE ECONOMIC CRISIS: WHAT WORKING PEOPLE NEED TO KNOW – A BOOK REVIEW
November 7, 2012 by NAMPWD in Library: What We’re Reading
The ABCs of the Economic Crisis by Fred Magdoff and Michael D. Yates, despite its small size, is packed with direct, concise and simple facts as the cause of the United States’ recession in 2007. Written with the academic audience in mind, Magdoff and Yates have produced a read that is essential to all those confused by the rhetoric of economists, the media and politicians.
Opening the book with “The Calm Before the Storm” the authors paint an eerie picture of life prior to the crash of the housing market, layoffs and bankruptcy. The blind “trust in the financial markets” (14) proved to be fatal for the US economy and, that in the wake of the economic crash – post the 2007 DOW Jones stock market high – the politicians and financial leaders that spearheaded the bailouts were the same that were responsible for it.
The authors then continue with a breakdown of capitalism – the economic systems strengths and weaknesses – and where the United States succumbed to capitalism’s flaws. Magdoff and Yates quickly assert that the profits made off of a capitalist system are merely the exploitation of workers. Magdoff and Yates write in the voice of a worker, not academics, and explain that the constant competition on behalf of the employer is not only the result of capitalism, but comes at the expense of fair wages and profit share for workers. They view the exploitation of mineral resources and geographical wealth as theft from peasants and the wealth of capitalism as the direct results of interconnected business and politics.
Magdoff and Yates then spell out for the readers something infrequently uttered: “capitalist economies are prone to crisis” (27.) Few academics are willing to admit this, especially in the shadow of great profit, however, for the authors; this notion is the foundation of their book. The lack of planning on behalf of the capitalist system and the inherent unemployment are two reasons for the authors as to why the public understanding of capitalism is a myth. Because of capitalism’s vulnerability, they are almost feeble in their defense to reckless borrowing and investments. Additionally, the authors note that a mature capitalist system (like that of the United States) is characterized by few investment opportunities, slow growth, and minimum inventories. As the capitalist system continues to age, these opportunities will continue to decay, which brings the authors to this question: can this slow growth be overcome?…
Read the entire review on the New American Movement for People with Disabilities blog