Stock Market Panics and the Danger of Another Recession

EXTRACT: Some have argued, both on the left and right, that the US downgrading is meaningless - just a storm in a teacup. We think this is a profoundly mistaken view. No, the downgrading is symbolic of the economic decline of the US. The prestige of US imperialism has taken a severe denting. There is idle talk of a new reserve currency to replace the dollar, maybe the Chinese yuan. Just forget it - it is not going to happen, simple as that. The US emerged as the strongest country on earth after World War II, with half of the world’s industrial production and the nexus of political connections - sheer clout - to get what it wanted. And behind that, of course, it had the armed force to enforce those political decisions if necessary. It remains the world’s sole military superpower.
What country or bloc could rival or replace the US as the global hegemon? China is a non-starter, especially given the fact that it has massively lent to the US and hence has absolutely no interest in a US recession - which would have a disastrous impact on its own economy, and in turn pose a possible threat to the political supremacy of the misnamed Communist Party of China. Despite the claims to the Morning Star’s Communist Party of Britain, Socialist Action and other Stalinites, the CPC party-state machine is incredibly fragile and could easily fall to pieces. If its economy slowed down, or went into reverse, then the Chinese bureaucracy would find extreme difficulty in subjugating the masses and maintaining its own cohesion - an essential requirement if it is to successfully function as the sweatshop of the world capitalist economy, into which it is inextricably locked. And the signs of Chinese slowdown are there - industrial output grew at a slower pace in July, while inflation unexpectedly quickened, putting the central bank in a bind as it tries to keep prices in check without dragging down an economy facing increasing threats from abroad. China to the rescue of capitalism? It just goes to show that the leaders of the capitalist world have no viable strategy. How about the EU ‘taking on’ US imperialism as a new contender? To ask the question is to get the answer - only with a new Napoleon would that be a possibility.
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