The US economy is the largest and most important capitalist economy. It is usually considered as having performed the best of the top seven largest economies since the end of the Great Recession in 2009. But is that really true?
If we take the average real GDP growth since 2009, we find that US growth has been lower at just under 2.2% than Canada, admittedly a much smaller economy.
Similarly, if we look at the average real GDP growth per person (per capita), US economy has average growth of just 1.4% a year, much lower than Germany at over 1.9% a year – although all the G7 economies are performing poorly. In particular, note the terrible performance of Italy, with an average contraction in both GDP and GDP per capita.
The story of the US economic giant since the Great Recession is one not just of stagnation but of disappearing economic growth in the weakest economic recovery after a slump since the 1930s.
In its latest economic outlook, the IMF is forecasting just 1.6% annual real GDP growth for the ‘advanced economies’ down from 2.1% in 2015 and down from its July forecast of 1.8%. And the main reason for this downgrade forecast is that the IMF now expects the US economy to expand at only 1.6% this year from a previous forecast of 2.2%. This slowdown is to be mirrored in the UK (forecast 1.8% from 2.2% in 2015) and in the Eurozone (1.7% from 2% in 2015). As for Japan, it is expected to expand in real terms by just 0.5%.
Maurice Obstfeld, the IMF’s chief economist, said the global economy held still significant risks fed by a “cocktail of interacting legacies” from the 2008 global financial crisis. These included high debt overhangs, bad loans on banks’ books and moribund investment, which were continuing to depress the global economy’s potential output. Growth “has been too low for too long, and in many countries its benefits have reached too few — with political repercussions that are likely to depress global growth further,” Mr Obstfeld said.
Yes, the end of globalisation and its benefits to the largest and most powerful capitalist economies is giving way to weak trade growth and the collapse of future international trade agreements as political leaders respond to pressure to drop trade pact like TPP or TTIP and in the case of the UK, to leave the European Union and seek bilateral trade deals.
The hope was that US economy would pick up in the second half of 2016 – yet another bout of optimism that is losing force. The Atlanta Fed Now GDP forecast is usually pretty accurate for US GDP growth. At the beginning of the quarter starting in July and finishing in September, it predicted a 3.7% annual growth rate. Now it is forecasting just 2.2%. Expect it to drop even lower before we get to the official figures. Similarly the Fed New York forecast is for 2.2% in the third quarter and just 1.2% in the fourth quarter.
For the long term, the US Federal Reserve bank economists are now forecasting just 1.8% a year expansion for the US economy compared to 2.6% at the end of the Great Recession. And all this assumes no new economic recession. The current ‘recovery’ is already one of the longest since 1945, having been supported by massive monetary injections by central banks globally. But monetary pumping has not worked.
The likelihood of a new economic slump is high for 2017, as I have argued in previous posts. But even without that, US capitalism’s economic performance is poor and only saved by the pitiful results achieved by other top capitalist economies.
Michael Roberts Blog 
This might be where we run up against the limits of Marxism as “economics”– where Marx’s “immanent critique” of capital, a critique based on the forces inherent, intrinsic to, and the very identity of, capital gets (mis)translated as “imminent crisis.”
The prospects for recession at the end of 2016 might be high for 2017; as they were at the end of 2015 for 2016; 2014 for 2015, 2013 for 2014– as if “crisis” is the alpha and omega of capital.
Of course, crisis is not– structural “secular” trend is the path of capital and is the proper focus; crisis, or contraction, or recession is but the acute, and momentary, expression of the “chronic” secular trend.
We should “stick” with how oveproduction is being manifested, and what that means for the condition of the working class, and the condition of working class struggle.
There is the point where all the explanations based on “economics”– Marxist or otherwise– become boilerplate, and Marx’s work reveals that its OWN alpha and omega is that class struggle.
There’s no “alpha and omega” in marxism in the sense that, as a science, Marxism is devoid of teleology per se. More precisely, Marxism is more of a method than a theory (although there is an economic Marxist theory, derived from the Marxist method. But not all Marxism is in the field of economics – there are Marxist theories in History, Geography, Sociology etc.). It’s an instrument other scientists can use to understand – and predict – aspects relative to capital they want to understand.
In Michael Roberts’ case, if I understood him well enough, he wants to use Marxism to develop an instrument of crisis prediction. Using his model, he predicted another slump by 2017, end-2018. If this crisis never happens, then that’s Michael Roberts’ responsibility, not necessarily a failure of Marxism as a scientific method of history.
If you check Michael’s posts for September 2015, October 2015, November 2015, Dec 2015, and or Nov 2014, you find the same speculation that recession is imminent– with quotes that 50% of bourgeois economists predict recession for the forthcoming year, or in the case of Citibank– 65% of its economists.
Now you can predict that it’s going to rain every day for months, but that doesn’t tell us much about the production of umbrellas, does it?
“the risk of recession in one year or so looks high. The world economy would then be in reverse gear.” Nov 14.
“I have commented on the possibility of a new global recession in previous posts. My view is that it is due and will take place in the next one to three years at most… Maybe it won’t be in 2016. But the factors for a new recession are increasingly in place. ” Dec 15
So I dont think I used the word “imminent”.
I take your point that the class struggle decides in the end, but I do think that for gauging the current and future balance of forces in the class struggle, it is useful to try and analyse the direction that the world capitalist economy is going (up or down) in the short term (1-3 years), the medium term (10-15 years), as well as the long term secular decline. There are many variables that make that difficult but analysis and verification must also lead to prediction, for better or worse. In a few years, I could be talking about sustained sunshine rather expecting rain all the time. If there is no new recession in the next few years (2017 or 2018?), then I shall re-examine my analysis and try again. As Virgens says, it will be “my responsibility” not Marxism.
I think it’s useful too; I just think there’s a limit to “economic” analysis; and I think when we keep predicting “crisis”– we’ve reached that limit.
I didn’t say any “failure” would be Marxism’s; I said we reach the limit to Marxism as “economics.” More than a technical difference.
There was no real US GDP growth in the first half of 2016. If we assume the BEA’s figure of 1.2% then deduct the 0.75% increase in the fiscal budget from 2.5% to 3.25% (Congressional Budget Office release) and the 0.4% increase in imputed rents for owner occupiers we are left with 0% growth. And that is before all the other duplications and imputations are factored in. This is consistent with the real fall in profits, investment and output. Incidentally most of the increase in the budget deficit fed into personal consumer expenditures the so called engine of economic growth.This and more will appear in my next posting following the Gross Value and Gross Output releases on 3rd November.