The Dow Jones share index had it's greatest fall in the price of shares in a single day, for as long as anyone can remember. Some financial analysts said the Dow Jones had fallen so low, it would have been better described as the Davey Jones.
When share prices start to fall rapidly people start to worry whether the collapse will continue and presage another economic crisis, resulting in recession. Because of this, news programmes have been wheeling out a sucession of economists and economic journalists, to do their best Corporal Jones impressions, telling everyone not to panic. The US government also tried to calm nerves, with Treasury Secretary Stephen Mnuchin arguing that the markets were functioning well.
Should news programmes be more responsible and tell you the truth? Some might suggest the level of propaganda in Britain is so severe, that even the editors of those news programmes have no idea of what's real and what's fiction.
It isn't a "crash", it is an "adjustment", after continuing rises in share prices over a long period. Two of the reasons they have given for this "adjustment", is an expected rise in US interest rates and, rising wages in the US job market. In other words, the reason were doing so badly, is down to the fact were doing so well. Several analysts argued that the markets were infact going through a correction, not actually embarking on a crash.
As a result they predict a rise in inflation. This is how perverted the capitalist economic system is. If interest rates rise who benefits? The Banks do of course, because they increase their return on any money they loan out. The flip side of that coin is that investments in industrial expansion and infrastrucuture decreases because it is more expensive to borrow the money needed to invest.
This leads to a slowdown in employment so jobs become scarcer. If wages rise who benefits? Workers of course. If inflation increases who loses out? Everybody because goods become more expensive. If all of these things are true who are the winners and losers? The answer is that only the financial sector and the super rich win. Corporate executives and the very wealthy benefit when the cost of living rises. Those same people will have large ammounts of money in the banking sector so that when interest rates rise they inevitably gain from the interest paid on their savings. Inflationary rises don't even scratch the surface of the increased wealth. So who are the big losers? The workers of course, because under the capitalist system, workers never win.
As stated, employment opportunities will become scarcer, planned investment will stall and infrastructure projects will never get off the drawing board. Wage rises will have any beneficial effect completely wiped out by the rise in living costs imposed by interest rate rises and inflation on prices for food, clothes, fuel, and so on. You've noticed the huge rises already at the petrol pump? Please try not to laugh, as you ponder how to spend your unlimited amount of fun coupons this coming weekend. That luxory yacht or the villa in Spain still appeals to you? Or maybe the stark reality is that you cannot afford the bus fare to the foodbank!
They may even continue to be poorer with every year that passes as they have been every year since 2007. Capitalism is a vast con trick which is only perpetrated on the many by the few who it benefits the most. Try and remember this the next time you place your 'X' in a polling booth. Nothing changes unless you want it to.
Phil Gage for Political Provocateur
Edited by Simon O'Donnell for Political Provocateur