As governments try to slash public spending, they risk pushing the world back into recession—the dreaded “double dip”.
It isn’t taking much to push jittery capitalists over the edge.
Stocks plunged last week after bad economic data emerged from across Britain, Europe, the US and China.
“The markets”—in other words the ruling class—are visibly nervous about what might happen.
“Double-dip fears are the pervading influence on market psychology”—that’s how top banker Mitul Kotecha of Credit Agricole put it. Many top bosses believe the cuts are increasing the risk of a return to recession.
One survey showed the percentage of finance directors who say they are “more optimistic” about the economy has almost halved from 40 percent to 24 percent in the last three months.
The government wants to rob public services to pay for the bank bailout, but this will force up unemployment.
And there are already 2.47 million unemployed people in Britain.
Joining the dole queue will mean a life of poverty for many. It will also mean less people spending money in the economy—which could lead to a spiral of decline.
There is only one way out of the crisis for workers—fight the cuts.