- Created: Thursday, 18 February 2016 12:15
- Written by Steve Palmer
In his last State of the Union address on 12 January 2016, President Obama claimed that ‘the United States of America, right now, has the strongest most durable economy in the world’; in its last report the US Federal Reserve Bank talked optimistically of ‘economic momentum’, ‘solid gains in household spending’ and ‘a strengthening economic recovery’. Yet a closer examination shows that this economic miracle is something entirely different. Steve Palmer reports.
US capitalism has had a difficult year. Despite all media talk of a ‘strong recovery’, there are critical indicators of stagnation. The inability to accumulate profitably was shown by the year-on-year decline, in the second and third quarters, of capital expenditure by the largest 500 non-financial corporations (the S&P 500 ex-fin). At the same time idle cash and short term investments amounted to $1.45 trillion, the second highest level in ten years. Capital expenditure has decreased almost 5% over the year.