by Big B

There’s value in not declaring a recession if you’re the U.S. or Canadian financial regulators responsible for the economy – let alone a depression. And it may not be for what regular readers of Linchpin would think the reasons are either. There are few signs that the right-wing strategists who analyse world security and the markets – and whose analysis goes on to influence the conservative governments here and in the U.S. – are worried about scenes from the Grapes of Wrath enveloping the heartland, or that ten thousand fresh memberships in communist organizations will be filled out tomorrow if a depression proves real.

They’re worried about consumer panic that will halt the unprecedented economic growth of the last ten or fifteen years ... they’re worried about having offered every innovation that can grow an economy (like the car did, and flat screen tv’s can now) faster than they can develop new ones ... they’re worried about having to replace sheer profit with widespread social programs – the fallout of Hurricane Katrina – only all the time, and everywhere – and the one apparent lesson learned from the last great depression. They’re worried about their bottom line.

What’s clear is that the Western economies can’t be saved this time out with the innovation and new economies created through war, since the U.S. adopted the model of permanent war post-9-11. And in the case of the U.S. they’re worried because any recession now would be a clear indication that the world no longer values its currency, and can no longer afford the way the U.S. has chosen to secure its energy routes. It’s feeling a little like the end of empire. Especially when the East can afford, and manage permanently, scenes from the Grapes of Wrath, and in fact spin, like finely woven silks, that misery into an asset of their economy – much like England did at the start of the industrial revolution.

Asia has no shortage of food staples such as rice (nor does the U.S., who grows 90% of its grain staple needs). It was reported recently that Thai rice growers were fetching as much as a thousand dollars per tonne of rice – an unprecedented amount. What the world food markets are experiencing now is a crisis in the distribution of food staples, brought on by the unsustainable way the U.S. has chosen to secure its energy routes mentioned before.

Technically, there isn’t a recession in the U.S. at present – if a recession is defined as two consecutive fiscal quarters (roughly three months a piece) with negative growth. The U.S. fed tells us this isn’t so, and other bell weathers such as the newest job loss figures suggest that things aren’t recession bad. But the language of the markets is largely a made up one, understood by its practitioners, but experienced by us all. And as much as there are regulators able to drive inflation down as an act of absolute state power at these first signs of crisis, there are enough analysts and money managers whispering depression to make it none-the-less self-fulfilling. Hard as it is to ignore when people walk away from their homes en masse, cannot manage their debts en masse, cannot afford to heat their homes, or drive their cars en masse – and when whole economies contract around the cost of supplying the fuel necessary to bring the goods to market, it would seem inevitable that tough times are ahead.