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(2) the massive expansion of real estate speculation;
(3) debt-financed consumer-based growth;
(4) the stimulation of Asian manufacturing growth and exports; and
(5) the boom in commodity production, exports and prices in Latin America."
Combined, the above factors fueled growth until 2007, followed by the subsequent collapse and deepening recession. America has been especially hard hit, and few prospects promise relief. All economic indicators point down, and households are so over-indebted they've been forced to curb their spending for the first time in decades. A combination of "Unemployment, bankruptcy, credit freeze, corporate losses and debt - a general depression - has devastated the domestic US economy" and spilled over into the rest of the world. Monetary and fiscal measures have been so misdirected they've failed.
All major banks are insolvent. Industry is flat on its back. Small and larger businesses are vulnerable to collapse. As economist Rick Wolff explains, "capitalism hit the fan." The entire system broke down and "no longer performs its most basic functions....to produce, lend, employ, consume, trade and house." Like other world regions, Latin America has been greatly impacted by weakened export markets, frozen credit, capital flight, and overall economic malaise.
All regional economies have felt the full brunt of the crisis - in terms of declining "trade, domestic production, investment, employment, state revenues and income. (As a result), bankruptcies will proliferate and state spending on social services will decline." Propping up banks and key businesses takes precedence. Public and private unemployment will thus grow. Wages and benefits will be cut. Latin America's "entire socio-economic class configuration (on which its growth model is based), is headed for a long-term, large scale transformation."
Trade unionists and social movements must act or lose relevance. With dominant business sectors needing state subsidies and debt relief, "workers, employees, small farmers and (common) businesspeople" are bearing the recession's brunt on their backs - through lower wages, reduced social services and state repression ready to crush resistance.
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