How deep a slump?

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It is no longer a case of when the US economy will go into recession but how deep and how prolonged that recession will be. For the recession is here and as figures published this week show it is a major one.

In the last 3 months the American economy actually shrank at an annual rate of 8% making the relevant comparisons less and less with the 1974/5 recession and more and more with the slump of the 1930s.

In this situation there is tremendous pressure on the Carter government to reduce taxes in order to stimulate the This pressure comes from the mass of ordinary working class people who traditionally give their support to the Democratic Party and who are being hit directly by the steady increase in unemployment (800,000 extra last month).

The most badly hit industry has been cars which this year show a decline in sales of over 30% with several hundred thousand car workers laid off and car plants shutting down.

The threat to the Chrysler Corporation has been temporarily averted by a government backed rescue operation which will involve handouts of $1.5 billion.

Over the last few weeks there have been arguments raging among Chrysler's creditors as to whether they would give their blessing to the recovery deal.

One problem which has meant that agreement could not be reached straight away is that part of the deal has been agreement by the creditors not to demand payment of debts.

At present the debts, which amount to $4 billion; are owned to some 400 banks and 2,000 suppliers.

It was finally announced over the weekend that two major banks which had been holding out had decided to fall in with the deal.

However, while this will now release some $500 million, losses for this year are already forecast in the region of $750 million plus.

Carter

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round-u THORNEYCROFT URGES TACT "Softly, softly catchee flunky" is the motto being impressed upon Tory ministers by Party chairman Lord Thorneycroft. For all the brave noises of the Tories on the supposed decline of working class militancy, all is not well in the employers' camp.:

Not only are Tory interest rates and the high pound producing a rising list of bankruptcies, but the growing militancy of the working class has can be more effectively press-ganged by both bosses and union officials into further jobslashing productivity deals and speed-up in the "national interest" shattered two major attempts at employer solidarity.

The British Printing Industries Federation is at this moment engaged in a gloomy post-mortem examination to discover why its concerted attempt to confront the power of the National Graphical Association with recent national lockout wound up such an abysmal failure.

In the 'united event the should be out on floor making profits.

"The past expansion of these institutions has not only excecded our capacity to pay for them, but has taken up front' splintered asunder as each BPIF employer scrambled for a settlement that would give him an advantage over his BPIF competitors.

As the print bosses lick their wounds, the CB last week scrapped its much-heralded plans for a strike insurance fund.

Out of 4,000 CBI member firms only 400 replied to a questionnaire on the scheme: 30 The most obvious task to be tackled by human initiative in the next period is to rid the British working class of the Thatcher/Joseph government that is laying waste the most Wednesday 1980 said "no way"; 170 said "no"; and only 200, under considerable pressure, agreed to take part.

Larger firms in particular were reluctant to get involved in an open-ended gamble which, in a year of widespread strikes, could have involved them in repeated payments of "premiums" running into tens of thousands of pounds.

The CBI estimated that some £50 million a year would have been needed to run. the insurance scheme. Now, just like the earlier CBI plan for firms to band together when hit by strikes, the plans have wound up in the waste bin.

But this would be much more encouraging for workers if their trade union and Labour leaders were half as energetic in fighting for joint action against the Tories as the bosses are keen to mobilise joint action against the unions.