I HAD to speak at a meeting last week with a title that seemed to be quite daft- 'Is the recession over before it began?' This was on a day that saw massive panic on the stockmarkets, and after George Bush had said he was worried about 'how tender the system can be'. He's been on television twice since to try to reassure the American people. On each occasion the result has been to increase the sense of panic. It has a much bigger political impact in the US than here. That's because the nonsense about 'people's capitalism' has conned many more people there.
About half of households in the US own shares, as against only about 10 percent in Britain. Whole swathes of the middle class and quite a few workers are seeing their savings melt away.
Along with the panic there is growing disillusionment with political leaders. This was brought home to me when I accidentally switched over to CNN news. After 11 September it became nothing more than a string of apologies for US imperialism in Afghanistan, and for Israeli aggression in Palestine. But last week the tone had changed.
It was the Bush team who were under attack for their financial dealings. There were repeated showings of an old video of vice-president Dick Cheney praising the 'flexible' auditing by the firm Arthur Andersen.
Such flexible auditing enabled giant corporations like Enron and WorldCom to get money from millions of small investors by fraudulently claiming massive profits. The message was clear enough: 'Cheney, Bush and Co are fraudsters too.' No wonder Bush has to keep saying nothing is wrong.
He might even believe some of what he says. It's an important feature of capitalism that those who run the system have no real idea of where it's going.
Karl Marx wrote about what he called 'the fetishism of commodities'. Capitalists, he pointed out, see the rising and falling prices of goods on markets, not the way people are exploited while working together to produce those goods.
We've had an amazing example of this over the last four years. The Asian crisis which pushed about 40 percent of the world into recession in 1997-8 caused a shiver of fear throughout the world's rulers. But then stockmarkets began to soar upwards again. Suddenly defenders of the system told us the crisis was over.
I debated with Gordon Brown's former economic adviser Lord Desai and Margaret Thatcher's former adviser Patrick Minford late in 1998. Both insisted that the crisis was over thanks to a reduction in interest rates by Alan Greenspan, the head of the US Federal Reserve bank. Such facile optimism could persist even after the collapse last year of much hyped internet and high tech businesses.
As stock exchanges began to rise again in the spring, the Financial Times proclaimed on 1 March, 'US Recession May Have Ended Before It Began'. Hence the daft title for my talk. In fact, all along giant corporations had been fiddling their profit figures. This became public knowledge with Enron and then WorldCom.
But academics had already shown a year ago that US corporations were claiming total profits 50 percent higher than was possible. And the divergence between claimed profits and real profits began during the Asian crisis. The whole recovery from that crisis was based on fiddling the figures. It was an act that has now come seriously unstuck. No wonder Bush, Cheney and the others are worried.