PAUL JAY, SENIOR EDITOR: Tax cuts to ordinary working people—there’s no telling how much of that little extra income—and it doesn’t amount to very much—winds up just going to debt servicing, at any rate. And even if that does recycle a certain amount of money in the economy, it doesn’t deal with this underlying problem that a month from now, two months from now, people are back to keeping a standard of living based on credit, and the buildup just starts again.
LEO PANITCH, PROF. OF POLITICAL SCIENCE, YORK UNIVERSITY: Yeah. On the other hand, you know, let’s be honest about this. American workers are relatively well off compared to the rest of the world. They’ve certainly been subject to increased exploitation, to increased competitiveness. They’ve lost their security. All of that has not made life very pleasant, even as they’ve maintained their consumption. They’re not un-open to further exploitation and further competitiveness. So it’s not impossible that they can take a hit and keep the American economy going. You know, it really does depend onto what extent financial markets are spooked and don’t reinvest, etcetera.
JAY: And to what extent American workers are willing to put up with this.
PANITCH: Are willing to put up with it–And, unfortunately, so far one doesn’t see the kind of organized response, militancy—they’re certainly not going to get it from the Democratic party—that would indicate something like what gave rise to the New Deal: you know, the massive marches of the unemployed, the radicalization of so much of the American working class, the strength of the Communist party in those early years of the Depression. That’s what pushed Roosevelt, who was a balanced-budget guy, you know, when he was elected.
JAY: Well, a lot may depend on how long this recession goes on.
PANITCH: It does depend on that. And it does depend on as well in terms of what happens in the rest of the world; how serious this is across the world. What’s certainly clear is that the making of global capitalism has been highly dependent on the United States.
JAY: If there is a prolonged, deep recession in the United States, what does that mean for China when so much growth seems to be based on the American consumer market?
PANITCH: Yes. It means that it will definitely affect China. And the ability to compensate for the sales to the United States by selling to the Chinese working class is not there yet by any means.
Please note that TRNN transcripts are typed from a recording of the program; The Real News Network cannot guarantee their complete accuracy.