The latest figure for US employment shows a continuing surge in employment, as the economy appears to be on a sustainable path of growth, despite the effects of the three year cycle, which kicked in during the third quarter of last year. The growth of the US economy, which has benefited from the policy of fiscal stimulus, introduced by the Obama administration, is in stark contrast to the recession that has been induced in the UK and Europe, after 2010, as a result of conservative policies of austerity. The only people who seem to cling to the belief that such fiscal stimulus cannot promote growth are the conservative austerians, and some dogmatic Marxist economists, who want to insist, against all the evidence, that capitalism is in a "long depression", a catastrophe from which it cannot escape, by any measure, short of a socialist revolution, or the crushing of workers' living standards.
In fact, the only times the US economy has not been growing strongly, in the period since 2010, has been when the conservatives of the Republican Party, and Tea Party Taliban have deliberately inflicted political crises on the economy, such as their frustration, at state level, of federal fiscal stimulus, when they have caused crises over the Debt Ceiling, threatening to close down government by refusing to pass a budget, and over the Sequester; or when the economy has suffered from some serious natural disaster such as the Polar Vortex that froze all activity, in the first quarter of 2014. In fact, over the last year, apart from that quarter, growth has average around 4-4.5%. The last quarter of 2014 came in at, a below estimate, 2.6% annualised figure, but given the revision upwards of other data, its likely that this figure too will be revised higher.
January employment growth came in at 257,000. That figure actually hides the fact that private sector job growth came in at plus 267,000 with 10,000 jobs lost in the state sector. The unemployment rate actually rose despite the additional jobs, because the labour force itself increased by 700,000, itself a very positive development, because it means that many workers are coming into the workforce, as the economy grows, who previously had given up hope of finding work. The numbers were, however, better than the 257,000 number suggests, because the figures for November and December were also revised sharply higher too. In fact, the revised figure shows 150,000 more jobs were created during these months than previously estimated.
This is confirmation of the validity of Obama's policy of fiscal stimulus, as against the austerian policies adopted by European conservatives, such as George Osborne, or Germany's Schaueble. It comes after Obama effectively waged an open verbal war against those conservative, austerian policies this week, by announcing a $4 trillion budget, as part of what he called in a rejection of "mindless austerity".
The tide is clearly turning against the conservative advocates of austerity, a damaging ideological experiment that has clearly failed, even in terms of the interests of industrial capital, an experiment that has simply demonstrated a point made by Marx long ago, that when the interests of money-lending capital are able to determine government policy, it always seeks to defend fictitious capital by destroying real productive-capital. It is a policy that has been seen with disastrous effects in Greece, in Spain, Portugal, Ireland, Italy and the UK.
Social Democracy in Europe now needs to learn the lessons of austerity in Europe as against the success of fiscal stimulus in the US. It needs to ally itself with US social democracy against the forces of conservatism in Europe. It needs to rally around the Syriza Government in Greece, and of Podemos in Spain, to reject austerity, and to begin promoting the idea of a European wide programme of fiscal expansion, to get European workers back to work.
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