>News of the low-level of consumer confidence in the US added to the
>evidence of big layoffs in the dot.com sector of an approaching
>recession in the US. The consumers got blamed for the slowdown both
>ways: for not buying enough, and for buying too much from abroad on
>credit. But only a few years ago the Federal Reserve concluded that the
>long period of growth in the US was the consequence of wages being held
>down by 'worker insecurity' (Federal Open Management Committee
Federal Open Market Committee
> minutes,
>24 September 1996). Then the Fed understood that holding down ordinary
>people's consumption was the key to the growth in capitalist profits.
>
>The rise in lay-offs and slowed growth is a consequence of the failure
>of businesses to invest, not consumers to purchase. For perhaps the
>first time in history, the only opposition to capitalism is demanding a
>reduction in living standards and an end to expansion. Outside the Davos
>summit protesters were attacked, while inside leading business CEOs were
>lectured about the harm that they were doing to the planet. Newsweek
>described the way that business confidence is crumbling in the face of
>the ecological critique: 'when 1,000 CEOs worry about the state of the
>world, they're going to think about the state of their businesses first'
>(5 February, 2001). If the US hits zero-growth the world will get an
>interesting case study in the relative virtues of the static state
>economy proposed by environmentalists.
James, business is cutting back on investment for classic reasons - plunging evaluations of future profits. Their planned cutbacks in capital spending have nothing to do with greens in Davos, or anywhere else in fact.
Doug