The U. S. Economic Crisis

Fundamental Causes and Possible Solutions

Bibliographic Data

ID12155271
AuthorsFred Moseley (0000-0002-5420-010X, Mount Holyoke College, corresponding author)
Year2011
Volume40
Issue3
Pages59-71
Publication date2011-10-01
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueInternational Journal of Political Economy (JOURNAL)
Journal identifiersISSN: 0891-1916 • E-ISSN: 1558-0970
PublisherTaylor & Francis (PUBLISHER • GB)
DOI10.2753/ijp0891-1916400305
OpenAlexW1569069655
LanguageEN
Citations received4
References cited3

This paper argues that the fundamental cause of the current economic crisis in the U. S. economy was a significant long-term decline in the rate of profit from the 1950s to the 1970s. Capitalists responded to this profitability crisis by attempting to restore their rate of profit by a variety of strategies, including wages and benefit cuts, inflation, speed-up on the job, and globalization. These strategies have largely restored the rate of profit, but have resulted in stagnant real wages for workers for decades. As a result, household indebtedness has increased to unprecedented levels and must be substantially reduced in order to make a sustainable recovery possible. In addition, increasing indebtedness in the financial sector has greatly increased the instability of the financial system, and this financial indebtedness must also be reduced significantly. In the event of another banking crisis, bankrupt banks should be nationalized and operated in the public interest

Economic policy · Economics · Financial crisis · Financial system · Globalization · Inflation (cosmology · Interest rate · Macroeconomics · Market economy · Monetary economics · Profit (economics · Profitability index · Rate of profit · Real interest rate · Economic Theory and Policy · Housing, Finance, and Neoliberalism · Political Economy and Marxism · Finance

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