est. Americans' disposable income fell by 8.7 percent in the third quarter, the largest since records began back in 1947. U.S. consumers have now cut back on spending by 3.1 percent in the third quarter, the first decline in 7 years and the biggest fall in 28 years. The Conference Board has said that the consumer confidence index fell to 38 in October, down from 61.4 in September. This is the steepest drop since 1973 and the lowest level for the index since they began tracking consumer sentiment in 1967. To put things into perspective, a year ago, the index stood at 95.2. Today it's at 38.
Businesses have cut back on spending as well. Homebuilders slashed spending by 19.1 percent, the 11th straight quarterly cutback, and business spending on equipment and software was cut by 5.5, the most since the first quarter of 2002. The global economic crisis has also meant fewer orders for goods produced in the U.S. New export orders fell to their lowest level since records began in 1988, ending 70 consecutive months of growth. Auto sales plunged to near 25-year lows in October, with General Motors Corp sales falling by an incredible 45 percent. And here is an incredible figure: The U.S. steel industry has 29 blast furnaces, which supply steel to many key sectors of the economy. Now 17 - over half - of these are going to be shut down. This will mean even more closures and layoffs throughout the economy.
And now the Federal Reserve has cut interest rates again, which will encourage even more borrowing, more spending beyond individuals' and companies' means, and therefore lead to even higher inflation. Gas prices may have fallen since the summer, but the damage has already been done. One company alone, Exxon-Mobil, pocketed $40 billion in profits last year alone. That's just one company. That's billions of dollars working people don't have for food, health care, education, and so on.
And then, after being told for years
that there's no money for our schools, for health care, for jobs, or
to rebuild the Gulf Coast and the country's infrastructure, within
days the government jumped to bail out the very same gamblers who
sparked the crisis in the first place. After decades of fighting
against government regulation and interference, they came begging for
handouts to save their system. So much for the so-called invisible
hand of the market! Or as one commentator put it, the invisible hand
of the market is now reaching into the average workers' pockets!
The government - both Democrats
including Obama and Republicans including McCain - have now
approved a $700 billion unspecified bail out. In other words, the
money has been approved to be spent, but no one knows just how it is
to be spent. So while the bankers on Wall Street continue the make
millions in bonuses, and while billions are spent each week on the
wars in Iraq and Afghanistan, millions upon millions of workers are
losing their homes, jobs, retirement, and hopes for the future.
In many ways, the current crisis is already worse than the Great Crash of 1929. Distribution of U.S. income today is almost identical to what it was in 1928, when the top 1 per cent of Americans took in 24 per cent of the national income. Today it's 23 percent, and of course the total amount of money is many times greater. We must also remember that the Great Depression itself didn't really kick in until two or three years after the Wall Street crash. So while the markets may go up on this or that day, the current crisis is far from over. We can't say in advance how deep it will be or how long it will last, but the indications are that it could be very bad indeed.
And the most worrying aspect for American workers is that we have just lived through the best capitalism has to offer. That was the boom! That was the "good times"! And even then, the gap between rich and poor has continued to widen in the richest country on earth. No wonder Americans are desperately hoping for change!
Most expensive campaign in history
The campaign to replace G.W. Bush went on for a full 21 months. Over that period, we witnessed 