posted July 9, 2010
Review of ‘Epic Recession: Prelude to Global Depression,’ by Alan Benjamin

by ALAN BENJAMIN, Unity & Independence Labor Newsletter, July 2010

Jack Rasmus is an economist, university professor, author, and activist who has worked closely with the San Francisco Labor Council and the Workers Emergency Recovery Campaign (WERC) to organize a workers’ fightback against the assault on workers’ rights, jobs and gains that is taking place in the name of the so-called “economic recovery.” In May 2010, his new book “Epic Recession: Prelude to Global Depression” hit the bookstores across the United States and Great Britain.

“Epic Recession” is a powerful book that is sure to provoke a widespread discussion in the U.S. labor movement about the need for independent political action by labor to defend jobs and prevent the onset of a Global Depression.

The jacket cover includes a statement praising the book by Chuck Mack, a longtime International Vice President of the Teamsters’ Union. Mack writes: “Extensive research, thoughtful analysis and articulate writing have created a great book. Jack Rasmus doesn’t just talk about the economic catastrophe of the last two years, he identifies the problems, the root causes of the problems and offers sound and insightful solutions.”

In an article published in Z Magazine (April 2010), Rasmus summarizes some of the main points covered in his new book. He writes:

“A year ago the Obama administration assured the nation that its $787 billion economic stimulus bill and three-part bank bailout plan would generate an economic recovery from the current economic crisis. A year later it is now abundantly clear that the Obama administration’s programs never intended to generate an economic recovery.

“These programs all were designed to simply put a floor under the escalating economic collapse at the time. The Obama strategy was designed simply to buy time to allow a market-driven recovery to take hold, led by the banks renewing lending once again. But the banks didn’t lend, market forces have been unable to generate a sustained recovery, and except for the big banks, big multinational companies, and the stock markets, the U.S. economy has been simply ‘moving sideways’ – neither collapsing further nor able to enter a sustained recovery. … Why is this?

“The current crisis is an Epic Recession, and thus quite unlike other ‘normal’ recessions in the post-1945 period in the United States. Epic Recessions are the consequence of major financial system implosions resulting from prior speculative investing excesses, which drive debt and asset-price inflation to dangerous levels. When the bust occurs, it produces greater than normal debt unwinding that leads to deflation and defaults.

“These forces are the consequence of escalating global income inequality, exploding global liquidity and the expanding ‘global money parade’ of speculators, their new shadow financial institutions, and new markets and financial instruments created for those markets (most notably derivatives). The global money parade, with more than $20 trillion on hand, drives the speculative boom, in the process creating a mountain of debt in the system.

“So what is to be done?

“Short of another financial-banking system implosion, which may originate anywhere globally given the now global nature of the capitalist financial system, the current economic crisis can go on for years, with short, unsustained recoveries and brief, equally unsustained economic relapses. This can go on for years until massive fiscal spending in the form of major government public investment and jobs creation occurs and appropriate structural reforms take place. These structural reforms will almost certainly have to address the banking-financial system, the tax system, and the serious income mal-distribution problem today in the U.S. economy.”

Rasmus goes on to explain that his new book contains 28 proposals for an alternative program needed to turn things around in the interests of the working-class majority. Among his proposals one can find the following:

” - Job Creation and Housing Stabilization: There can be no sustained recovery so long as jobless numbers remain in excess of 20 million (today roughly at 22-23 million when properly calculated) and so long as housing foreclosures, defaults and delinquencies continue to rise and prices and equity net worth continue to fall.

“A new federal housing agency, a ‘Home Owners-Small Business Loan Corp.’, or HSBLC, is needed to provide direct lending to homeowners and small businesses. … The initial task of the HSBLC is to purchase existing mortgages in foreclosure and resetting rates and principal. Thereafter, it would extend mortgage financing to all potential home financing in the future. The HSBLC is the primary agency administering a nationalized residential mortgage and small business property markets. …

“A one-year moratorium on residential and small business property foreclosures is needed to prevent further consumption collapse estimated from 4-5 million new foreclosures projected to occur. The moratorium will allow necessary time for the organization of the HSBLC. …

“- $800 Billion for Job Creation and Retention: An effective alternative jobs program must carefully consider the composition of employment generation. The quickest way to retain and grow jobs is within existing industries and businesses, not primarily by creating new industries from scratch. A quick path to jobs creation is direct hiring by government, in particular state and local government and school districts. A third fast path is promoting hiring in those industries having shown in the past high job growth rates, and thus potential for high job growth, such as health care. With these caveats in mind, job creation and retention program must target $300 billion for infrastructure jobs, $300 billion for public sector jobs, $100 billion for growth sector jobs like health care, and $100 billion for relocating manufacturing jobs back to the United States.

“- Tax Restructuring and Programs Financing: Capital Incomes Tax Cuts Rollbacks: There are approximately 114 million taxpaying households in the U.S., and the wealthiest 1%, or 1.1 million, have increased their share of IRS reported income from 8% in 1978 to more than 24% in 2007. This 24% share is equivalent to that which existed for the wealthiest 1% in 1928. No long-term recovery is therefore possible without a basic re-restructuring of the tax system in the U.S., starting with capital incomes taxation. It is necessary to roll back tax cuts on capital incomes – i.e. capital gains, dividends, interest and rental incomes for business – to 1981 levels, not 1993 levels, that is, back to that point at which the major tax restructuring began in the United States on behalf of earners of capital incomes at the expense of earners of wage incomes.

“80% Coverage Single Payer Health Care: There can be no long-term solution to the health care crisis in America (measured as deteriorating coverage, rising costs, and declining quality of care for the majority) so long as the Insurance companies remain a primary player in the system. Therefore, as an interim step toward a Universal Single Payer system, it is necessary to set up an Interim Single Payer system initially for the 91 million households earning less than $160,000 per year. Households earning above $160,000 (households within the top 20% income distribution) would be exempt, but could participate for a fee that would scale up with their income level.

“Re-Unionization of the Private Sector Workforce: A long-term program for restoring income to the bottom 80% households includes policies and measures to restore the unionization rate to at least the 22% level of 1980. The first step toward re-unionization must include reforms to level the playing field between workers, their unions, and management at the level of legal rights. This begins with implementation of the Employee Free Choice Act, or EFCA, which permits a more fair process for union organizing.”

Rasmus summarizes his solutions as follows: “The only way to prevent the onset of Depression is to radically restructure the economy through a massive jobs-creation program, nationalizations, a fundamentally new kind of banking structure and a long-term redistribution of income through better healthcare and benefit systems.”

Rasmus provides ample facts and figures to back up his 28 proposals. But he does not explain what it will take to ensure that these policies can become the law of the land – no doubt, he might say, because such an undertaking is beyond the purview of this book.

Possibly. But the question is posed from the beginning pages of his book. Millions of people voted for Barack Obama because they wanted “change they can believe in.” They wanted jobs, peace and justice – all of which are impossible to obtain so long as the Obama administration continues to bail out Wall Street at the expense of Main Street.

Promoting an independent Workers Emergency Recovery Campaign – including a massive jobs-creation program – will require that the U.S. labor movement act independently of the Democratic Party and fight in the streets and in the halls of Congress for its own agenda, through its own Labor Party.

Rasmus has made this task a bit easier by publishing a book that provides us with an analysis that is sound and a set of proposals that are reasonable and winnable – provided, of course, there is the political will in the house of labor to act independently of the twin parties of capitalism.

(For bulk order information, contact or

Sunday, May 28, 2017 8:27 am | login | xhtml
WHAT REVIEWERS SAY ABOUT THE PLAY 'FIRE ON PIER 32'
"In 'Fire on Pier 32' playwright Jack Rasmus uses Epic and American Musical Theater traditions and historic photo montage to wonderfully capture the conflict..."

Jack Rasmus Productions
211 Duxbury Court
San Ramon, CA 94583
drjackrasmus@gmail.com
925-999-9789