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The global financial crisis never ended. It is ongoing in the Eurozone and now has as its epicenter in China and other emerging markets, including Brazil and South Africa. Across the world demand for finance, labour, goods and services has weakened, most notably in the United States where mainstream economists were taken aback by a recent very poor Jobs Report. Weak demand is leading to more part-time employment in the US and causing the build-up of gluts in goods and services, especially in China. For while China saved the global economy after the crisis by launching a $609 billion infrastructure-led investment after 2009, the country is now the victim of western policies for shrinking demand – i.e. ‘austerity’.
The fact is that as western economies try to recover, they are sunk again by a mountain of private debt whose repayment is made less likely by austerity policies. These are policies with the ideological aim of “shrinking the state” but which, in the process contract both public and private sector investment, employment and incomes.
