After months of warning of a possible economic slowdown, the American bourgeoisie has suddenly acknowledged that its economy has in fact been in recession since last March, based not on the traditional capitalist economic criteria of two consecutive quarters of negative growth, but for the first time based on an admission that rising unemployment can be utilized as an indicator of economic decline. At this level, even though its manipulation of economic data had eliminated the statistical negative growth figures, the skyrocketing unemployment, which the working class understands full well is the paramount indicator of open recession and an attack on its living conditions, made it fundamentally impossible for the ruling class to maintain the fiction that a recession had not yet occurred. The rise of joblessness in the US has been staggering in the past year, with the number of officially unemployed workers in the US skyrocketing in 2001 by 2.6 million, up to 8,250,000, or 5.8 percent of the official workforce. As always the bourgeoisie's statistics underestimate the real picture of unemployment. For example, the bourgeoisie admits that its unemployment figure does not include 1.3 million workers who are "marginally attached to the labor force," by which they mean people who want to work but did not look for a job in the preceding 4 weeks before the latest government survey. Nor does it include the estimated 344,000 "discouraged workers" who have given up looking for jobs that don't exist.
The list of firms announcing massive layoffs grows daily. In January, Ford Motor Company, the world's second largest automaker, has announced plans to cut 35,000 jobs world wide, more than 10% of its workforce. This came after an earlier announcement last year by DaimlerChrysler that it would cut 26,000 jobs (20%) of the Chrysler workforce. Despite the bourgeoisie's propaganda efforts to blame the economic woes on the terrorist attacks of September 11, the Labor Department's figures indicate that only103,000 workers had been laid off as a direct or indirect consequence of the attacks, 42% in the airline industry and 29% in the hotel industry. The other 2.47 million laid off workers lost their jobs due to the workings of the capitalist business cycle. And it was only a few short years ago in the heydey of the Clinton prosperity that the capitalist pundits declared we had arrived at a utopian era of permanent prosperity, that the business cycle had been surpassed.
All of this occurs at a moment when the bourgeoisie has an increasingly restricted margin of maneuver. In 2001, in a desperate attempt to jump start the economy, even though it was still denying there was recession at the time, the Federal Reserve lowered the prime rate 11 times, four times since September 11, to the point in which the prime is less than half the rate of inflation. The US Treasury is literally printing and giving away money to the banks, and still the economy slides deeper into trouble. In this context the scandalous bankruptcy of Enron, the Houston, Texas-based American energy giant, the seventh largest corporation in the US, with close links to the Bush administration, is an ominous reminder that the bubble has burst for the phony prosperity of the last decade which was based on speculation and debt. The disintegration of the Enron employee pension plans that were locked into Enron stocks, which had shriveled from a value of $92 less than a year ago to 34 cents a share, is a warning of what lies in store for other pension plans as the crisis deepens.