Hurting but Hopeful (A repeat of Vol. XVII, Art. 26 – 3 years ago today)
From the American Shipper – Posted 11/25/2008:
“COSCO, ACL chiefs say box recovery may come mid-2009.”
From the American Shipper – Posted 11/26/2008:
“DeTrenck: Container business weakness to persist until 2010.”
From Bloomberg.com – Posted 11/27/2008:
“Shipyards in China, seeking to overtake South Korea as the biggest shipbuilding nation, may stop asking customers for downpayments as they vie for orders in a global recession … Bao Zhangjing, assistant director of the China Shipbuilding Economy Research Center, said today in Shanghai. The global shipbuilding industry will enter a recession of at least three years starting 2009 on slowing trade and lending, he said.”
None of the above, you’ll notice, justify their expressed and differing opinions. They’re hurting but hopeful. Like everyone else in the maritime industry, however, they have no idea what’s causing this global graveyard spiral, nor do they know how to pull out of the fatal dive.
Now contrast their musings with the assessments offered by more knowledgeable observers.
1. In his 11/24/2008 analysis, “Lurching Toward Gomorrah: More Signs of An Unstoppable Economic Meltdown”, Stephen Lendman began with these words; “Crisis denialists are still around but are slowly and grudgingly giving way to the reality that global capitalism is in serious crisis as recession lurches toward depression in a continuing downward spiral …
“Long Beach accounts for about 20% of the country’s container imports. It’s second only to Los Angeles, and its volume is down 10% from last year. It’s ‘where imported products arrive and filter through the tributary of trucks, trains and retailers into the hands of consumers. But now, products are just sitting’ and turning the port into a parking lot. Nearly all other major ports are in similar decline as the current crisis worsens.
“Veteran Long Beach port workers say the slowdown is like nothing they’ve ever seen. It’s affecting other businesses and workers, and it’s got them all worried. US consumers, too, and in the words of one reflecting the many: ‘I’m saving money, paying bills (and) hunkering down.’ It shows declining retail sales …
“Many other indicators are as bleak and show the economy in free fall, taking most others down with it. Clearly the verdict is in. At the least, it’s the worst economic crisis since the 1930s. At worst, it may be far greater that only the fullness of time will reveal.”
2. On November 15, 2008, in an assessment he titled, “The Great Depression of the 21st Century: Collapse of the Real Economy”, Michel Chossudovsky wrote:
“The financial crisis is deepening, with the risk of seriously disrupting the system of international payments.
“The crisis is far more serious than the Great Depression. All major sectors of the global economy are affected. Recent reports suggest that the system of Letters of Credit as well as international shipping, which constitute the lifeline of the international trading system, are potentially in jeopardy.
“The proposed bank ‘bailout’ under the so-called Troubled Asset Relief Program (TARP) is not a ‘solution’ to the crisis but the ‘cause’ of further collapse.
“The ‘bailout’ contributes to a further process of destabilization of the financial architecture. It transfers large amounts of public money, at taxpayers expense, into the hands of private financiers. It leads to a spiraling public debt and an unprecedented centralization of banking power. Moreover, the bailout money is used by the financial giants to secure corporate acquisitions both in the financial sector and in the real economy.
“In turn, this unprecedented concentration of financial power spearheads entire sectors of industry and the services economy into bankruptcy, leading to the layoff of tens of thousands of workers …
“The real economy is in crisis. The resulting increase in unemployment is conducive to a dramatic decline in consumer spending which in turn backlashes on the levels of production of goods and services …
“Business enterprises cannot sell their products, because workers have been laid off. Consumers … have been deprived of the purchasing power required to fuel economic growth …
“Mass poverty and a Worldwide decline in living standards is the result of low wages and mass unemployment. It is the outcome of a preexisting global cheap labor economy, largely characterized by low wage assembly plants in Third World countries.
“The current crisis extends the geographical contours of the cheap labor economy, leading to the impoverishment of large sectors of the population in the so-called developed countries (including the middle classes) …
“What is distinct in this particular phase of the crisis, is the ability of the financial giants (through their overriding control over credit) not only to create havoc in the production of goods and services, but also to undermine and destroy large corporate entities of the real economy.”
[Although Professors Lendman and Chossudovsky have put their fingers on the causes of this economic catastrophe, even they don’t know how to reverse gears. The only way out, as readers must now realize, is for U.S. authorities to review the successes of this country’s World War II shipbuilding effort. There is absolutely no other way we can create jobs and purchasing power.]