ing numbers of his supporters will begin to feel confused and betrayed, bitterly disappointed, and then angry. They will be looking for answers and a way out of the crisis that still confronts them, and will be increasingly open to the ideas of revolutionary Marxism and socialism.
The most important issue on American voters' minds is the economy. No wonder. The instability on the stock market is having a very real and very immediate effect on the real economy and on the lives of working people, who will be the ones who suffer for the crisis of the system. It's always the same: during the boom times, the rich benefit, and during the hard times, working people and the poor have to foot the bill and tighten their belts even further.
The housing market has collapsed, trillions of dollars have been wiped off the stock market, and the official unemployment rate - kept artificially low by changes in the way data is reported - is now 6.1 percent, the highest it has been since just after September 11, 2001. When you count the long-term unemployed and the under-employed, the real figure is far higher. The economy lost 159,000 jobs in September alone, the biggest loss since March 2003. The economy has now lost 760,000 jobs since January, not including October. When you consider that the economy must generate 150,000 new jobs per month just to keep up with the growing workforce, the picture is even worse. According to Nigel Gault, chief domestic economist at Global Insight: "My view is that [unemployment] will be near 8 or 8.5 percent by the end of next year." That would be the highest unemployment rate since the recession of the early 1980s.
In just the last two weeks, the following companies have announced mass layoffs: Merck, Yahoo, General Electric, Xerox, Pratt & Whitney, Goldman Sachs, Whirlpool, Bank of America, Alcoa, Coca-Cola, all the Detroit automakers and nearly all the airlines. In September alone, 2,269 employers announced mass layoffs, which means they fired 50 or more employees at a time. This was up sharply from the spring and summer, and was the highest number since September 2001. The financial services industry has been cutting jobs since last summer, when the credit crisis started. By some estimates, 300,000 jobs will disappear from banks and other financial services companies. Just a few months ago, these were considered "safe" white collar jobs.
Up until now, it was unclear as to whether or not the country had formally entered a recession. Now it seems clear. One technical definition of a recession is two consecutive quarters of shrinking Gross Domestic Product. GDP, the main measure of a country's economic health, shrank by 0.3 percent in the July-September quarter, the worst since the same period in 2001. That marks a steep decline when compared to the 2.8 percent growth in the April-June quarter. Most economists predict an even steeper decline in the 4th quarter. In the words of Brian Bethune, economist at IHS global Insight: "The train went off the tracks." And in the words of Robert Macintosh, chief economist at Eaton Vance Corp in Boston: "Pretty grim. It means we're in a recession, it's as simple as that ... a pretty solid manufacturing recession. The question is, 'How long or deep is it going to be?'"
Manufacturing, the backbone of any industrialized economy, has also taken a dramatic hit. The Institute for Supply Management's measure of manufacturing activity plummeted to 38.9 in October, down from 43.5 in September. Anything below 50 indicates contraction. Again, this was the lowest reading since September, 2001. Only this time it wasn't a terrorist attack that pushed an already weak economy over the edge, as was the case 7 years ago. This time it is the direct result of a profound crisis of the capitalist system itself.
Consumer spending, which accounts for 70 percent of economic activity in the country, has now run out of gas. Much of this spending was based on unprecedented levels of indebtedness and mortgages based on rising house prices, and this borrowed money must now be paid back - with inter