If The Slog has had one recurring theme that outscores all others since 2010, it is that – with this massive shift we’ve seen from labour to capital since the mid Nineties – we of the serf class cannot consume at the rate the neolib model requires if the elusive Eternal Growth Paradigm is ever to be even attempted, let alone achieved.

A month into 2016, every large multinational foodco, bank, Hedge Fund operation and hitech hype combine is variously announcing ‘cost cuts’, ‘restructuring’, ‘consolidation’ and every other US corporate euphemism for firing people and capping the remuneration package of the lucky survivors.

Nicholas Wilson’s favourite bank HSBC this afternoon announced an eye-watering $59billion in cuts to staff costs, and they are far from alone in this. Large and sclerotic corporate entities only ever have one solution to falling profits: terminate the worker bees. Bank of America has been engaged in the same (albeit more quiet) savagery for the last 18 months, and Yahoo’s latest “new plan” is about exactly the same ‘strategy’. Caterpillar, US Steel, the entire shale-fracking sector, The Guardian, Sears, Sprint, Macy’s, BP, General Electric, Pearson, IAG….all of them are shedding jobs.

But the new data announcing that YOY, US December consumption was flat came – once more with feeling – as a surprise to those who call themselves observers….and yet seem unable to spot the obvious. The Chinese PMI data disaster (adding weight to this morning’s Slogpost about overstated Beijing gdp stats) was described as disappointing. While didactic Davos divas drivelled on about distracting data, more and more signs came in to show that – far from being neurotic – the financial markets are spot on the money.

Luxury item sales plummeted last month…in signature sectors like top-end watches and élite retailers of the Needham Marcus ilk. Far from being unsupportive of the world’s falling bourse prices, economic data poured forth to reflect it almost exactly.

US Foreign Relations Committee boss Richard Haass went on Bloomberg this morning CET to flatly contradict the devious of Davos, saying that the Chinese economy is in big trouble, and that while yes, it is in transition, it is a global demand collapse that has scuppered their transition timetable to a very dangerous degree. Last week, I posted to say that oil’s ‘rally’ was nothing more than a bouncey feline: today has been a bloody one for crude, as it fell back $2 to return to its logical trajectory….down, down, down.


It finally became clear that the monetarists had lost their marbles when – quarter by quarter after 2012 – the Eurogroupe kept insisting that the more one starved the Greek consumer, the more easily a consumption-based economy could be kick-started back to health. Although a huge variation in degree is involved here, in terms of reality failure there is little to choose between the ideas of Wolfgang Schäuble and those of George Osborne: they are twins when it comes to amateur madness.

However, the Truth has at last gone from being out there to out front. The kamikaze malaise is spreading from the socially deprived to those naïfs who hope to collect the crumbs falling from the table of the depraved. What we’re seeing at the moment is a second stage of neoliberal cannibalism, in that the consumption gap is heading upmarket.

The far more unpredictable tertiary stage comes next. Calling the When of it all remains a mug’s game, but there are some obvious symptoms to look for. Prominent among these will be severe Sovereign debt crises and at least one major bank failure. Escape from that outcome is impossible in a world where State budgets and bank bets have been based on the idiotic optimism of crowds.

Ultimately, it is this simple: don’t throw your best weapon on the fire.

Earlier at The Slog: EU, Chinese & African moves Behind your Back