- First, the introduction of computers led to rising productivity -- but without increased job creation or rising wages.
- Second, a second great wave of massive immigration led to ever more competition for increasingly scarce jobs.
- Third, outsourcing became available to capital as a way to drive down costs and put a ceiling on pay packets.
- Fourth, foreign competition from low-wage areas of the world hurt both domestic and foreign sales.
As a result of these four developments, workers' real wages
have leveled off from the 1970s and even declined as of late.
In order for companies to survive, capital accumulation must continue to expand. And while surging exports certainly help keep the wheels turning, the US home market and all the money being made from the associated bubble came to be vital to US capitalism's survival. The bankster ruling class hit upon a great new idea: Why not take this unprecedented amount of surplus value created by the workers and lend it back to them at fat interest rates? Thus would be produced profit upon the original profit, and no worker would be the wiser. And so it was that the great credit bubble of the past decade came into being, as unprecedented amounts of loan money and credit cards flowed to literally anyone with a job or a home -- and even many without either.
But all good things must come to an end and this is where today's new reality comes in: America's great credit expansion has finally, once and for all, reached its brick-wall limit. Hence today's crisis, which is not just another recession, in Wolff's opinion, but a stone wall up against which (as a watershed and game-changing event), what is essentially our very "operating system' has crashed.
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