..which brought George Bush into power:
<snip>
Recession/Depression on the Horizon
By Tony Wilsdon
Justice, April/May 2001
After the longest period of economic upturn in US history, the US economy is now in a serious downturn. "Here comes the slump," shouted the cover of Time magazine on January 8th. Evidence is growing that this will not be just a small, shallow dip, but that a major world economic recession will envelop the US and other countries in the coming period.
The US: What Kind of Recession
The most spectacular expression of this downturn has been the collapse of the high-tech industry and the bursting of the dotcom bubble. The manufacturing sector has been in recession since last summer, and layoffs are spreading in the industrial heartlands of the US, particularly in the midwest.
Industrial output fell 0.6% in January and February, the biggest back-to-back declines since the 1990-91 recession. Gross National Product, the most important statistic of economic growth, fell from 5% early in 2000 to 2.2% in the 3rd quarter and to only 1% in the 4th quarter. Orders for capital goods, a key indicator of the health of business, have declined over the last four months at an annual rate of 14.7%, similar to the recession experience of 1990-91. At the same time, banks are continuing to tighten credit. Many analysts now expect negative growth in the present quarter. Only the housing industry has not yet been affected by the developing recession, but this will not continue for long.
An important factor in this is the so-called 'wealth effect' from the dramatic rise of the stock market. This is the process where, because the stock market was growing during the late 1990s, consumers spent more based on stock options, etc. Now with the sharp decline in the stock market, this process has gone into reverse.
The destruction of wealth since the stock market's peak a year ago has reached a stunning $5.2 trillion. This represents almost half of the gross domestic product and over four times the amount of wealth wiped out in the 1987 stock market crash. For the first time since record-keeping began, household net worth declined last year. This has started to affect consumers, who are reducing spending. Retail spending fell 0.2% in February after rising 1.3% in January. The number of borrowers behind on mortgage payments jumped in the fourth quarter of 2000. Bankruptcies are at record levels.
<more>
<link>
http://www.socialistalternative.org/justice24/0.html