OPTIMISM IN THE KINGDOM OF PHANTASIES

By Robert Kurz

[This article published in: Neues Deutschland, 12/15/2006 is translated from the German on the World Wide Web, http://www.exit-online.org/druck.php?tabelle=autoren&posnr=293.]




Lately spring begins before Christmas with the 2007 economic predictions, not only with the weather forecast. That the gunpowder of cheap professional optimism was shot so prematurely this time is rather suspicious. The news resounded that the official unemployment figures had fallen just under four million. There was actually more work in the open air on account of the mild weather. Therefore the construction industry recorded the lowest November unemployment of the last 10 years. No general upswing can be established with the air temperature of the last four weeks. The slight rise of jobs that pay into social security is merely relative. Firstly, the minus of 1.5 million jobs since 2000 is forgotten. Secondly, 70 percent of the new jobs are limited or part-time. At the same time the number of precarious working conditions increases as well as the number of unemployed who disappeared from statistics through government measures.

The 2007 domestic German economy will be stimulated just as little as the labor market in years before. Conversely, the higher sales tax will turn out unfavorably in the books. The much-acclaimed growth prediction of the banks and institutes is only 1.3 percent, much too little in reality to even scratch the base unemployment that has developed continuously for two decades. The mini-upswing still depends only on export, that is, on the fragile world economy supported mainly by financial bubbles that can abruptly burst. While people like to hear votes of confidence from the kingdom of phantasies, the fear of an imminent crash increases simultaneously on the international bond- and credit markets. The breakneck credit financing of the worldwide takeover battles in the last months has built a gigantic bankruptcy potential in the private equity funds that can lead to a chain reaction with the business loans in 2007.

That the US economy as engine of the 2007 world economy seems to have finally run out of steam is connected with the thin air on the global finance markets. If the slump on the US real estate market continues and joins with a crisis of the global takeover-indebtedness and business loans, the stock market will also collapse again. The dreaded “hard landing” of the consumer economy in the US seems programmed. As everybody knows, this indebted consumption has fueled ever-larger parts of the global export economy. Direct export to the US is not only decisive for German businesses. A considerable part of the exports to the neighboring European Union or to China (like machine tools) depends indirectly on US consumption. All these countries import production components to utilize the one-way export course across the Pacific or Atlantic. The 2007 economy will be seen more than ever as a world economy with a North American focus. Christmas sales in the US, not in Germany, could be a first indication.