A doomsday look at 2012

Many of the major institutions and
economic relations which were cause and consequence of world and regional
capitalist expansion over the past three decades are in the process of
disintegration and disarray. The previous economic engines of global expansion,
the US and the European Union, have exhausted their potentialities and are in
open decline. The new centers of growth, China, India, Brazil, Russia, which for
a ‘short decade’ provided a new impetus for world growth have run their course
and are de-accelerating rapidly and will continue to do so throughout the new
year.

The Collapse of the European
Union

Specifically, the crises-wracked European
Union will break up and the de facto multi-tiered structure will turn into a
series of bilateral/multi-lateral trade and investment agreements. Germany,
France, the Low and Nordic countries will attempt to weather the downturn.
England – namely the City of London, in splendid isolation, will sink into
negative growth, its financiers scrambling to find new speculative opportunities
among the Gulf petrol-states and other ‘niches’. Eastern and Central Europe,
particularly Poland and the Czech Republic, will deepen their ties to Germany
but will suffer the consequences of the general decline of world markets.
Southern Europe (Greece, Spain, Portugal and Italy) will enter into a deep
depression as the massive debt payments fueled by savage assaults on wages and
social benefits will severely reduce consumer demand.

Depression level unemployment and
under-employment running to one-third of the labor force will detonate year-long
social conflicts, intensifying into popular uprisings. Eventually a break-up of
the European Union is almost inevitable. The euro as a currency of choice will
be replaced by or return to national issues accompanied by devaluations and
protectionism. Nationalism will be the order of the day. Banks in Germany,
France and Switzerland will suffer huge losses on their loans to the South.
Major bailouts will become necessary, polarizing German and French societies,
between the tax-paying majorities and the bankers. Trade union militancy and
rightwing pseudo-‘populism’ (neo-fascism) will intensify the class and national
struggles.

A depressed, fragmented and polarized
Europe will be less likely to join in any Zionist inspired US-Israeli military
adventure against Iran (or even Syria). Crisis ridden Europe will oppose
Washington’s confrontationalist approach to Russia and China.

The US: The Recession Returns
with a Vengeance

The US economy will suffer the
consequences of its ballooning fiscal deficit and will not be able to spend its
way out of the world recession of 2012. Nor can it count on ‘exporting’ its way
out of negative growth by turning to previously dynamic Asia, as China, India,
and the rest of Asia are losing economic steam. China will grow far below its 9%
moving average. India will decline from 8% to 5% or lower. Moreover, the Obama
regime’s military policy of ‘encirclement’, its economic policy of exclusion and
protectionism will preclude any new stimulus from China.

Militarism Exacerbates the
Economic Downturn

The US and England will be the biggest
losers from the Iraqi post war economic reconstruction. Of $186 billion dollars
in infrastructure projects, US and UK corporations will gain less than 5%
(Financial Times, 12/16/11, p 1 and 3). A similar outcome is likely in
Libya and elsewhere. US imperial militarism destroys an adversary, plunging into
debt to do so, and non-belligerents reap the lucrative post-war economic
reconstruction contracts.

The US economy will fall into recession
in 2012, and the “jobless recovery of 2011” will be replaced by a steep increase
of unemployment in 2012. In fact, the entire labor force will shrink as people
losing their unemployment benefits will fail to register.

Labor exploitation (“productivity”) will
intensify as capitalists force workers to produce more, for less pay, thus
widening the income gap between wages and profits.

The economic downturn and growth of
unemployment will be accompanied by savage cuts in social programs to subsidize
financially troubled banks and industries. The debates among the parties will be
over how large the cuts to workers and retirees will be to secure the
‘confidence’ of the bondholders. Faced with equally limited political choices,
the electorate will react by voting out incumbents, abstaining and via
spontaneous and organized mass movements, such as the “occupy Wall Street”
protest. Dissatisfaction, hostility, and frustration will pervade the culture.
Democratic Party demagogues will scapegoat China; the Republican Party
demagogues will blame the immigrants. Both will fulminate against “the
Islamo-fascists” and especially against Iran.

New Wars in the Midst of Crises:
Zionists Pull the Trigger

The “52 Presidents of the Major American
Jewish Organizations” and their “Israel First” followers in the US Congress,
State Department, Treasury, and the Pentagon will push for war with Iran. If
they are successful it will result in a regional conflagration and world
depression. Given the extremist Israeli regime’s success in securing blind
obedience to its war policies from the US Congress and White House, any doubts
about the real possibility of a major catastrophic outcome can be set
aside.

China: Compensatory Mechanisms in
2012

China will face the global recession of
2012 with several possibilities of ameliorating its impact. Beijing can shift
toward producing goods and services for the 700 million domestic consumers
currently out of the economic loop. By increasing wages, social services, and
environmental safety, China can compensate for the loss of overseas markets.
China’s economic growth, which is largely dependent on real estate speculation,
will be adversely affected when the bubble is burst. A sharp downturn will
result, leading to job losses, municipal bankruptcies and increased social and
class conflicts. This can result in either greater repression or gradual
democratization. The outcome will profoundly affect China’s market-state
relations. The economic crisis will likely strengthen state control over the
market.

Russia Faces the
Crisis

Russia’s election of President Putin will
lead to less collaboration in backing US promoted uprisings and sanctions
against Russian allies and trading partners. Putin will turn toward greater ties
with China and will benefit from the break-up of the EU and the weakening of
NATO.

The western media backed opposition will
use its financial clout to erode Putin’s image and encourage investment boycotts
though they will lose the Presidential elections by a big margin. The world
recession will weaken the Russian economy and will force it to choose between
greater public ownership or greater dependency on state funds to bail out
prominent oligarchs.

The Transition 2011-2012: From
Regional Stagnation and Recession to World Crises

The year 2011 laid the groundwork for the
breakdown of the European Union. The crises began with the demise of the Euro,
stagnation in the US and the outbreak of mass protests against the obscene
inequalities on a world scale. The events of 2011 were a dress rehearsal for a
new year of full scale trade wars between major powers, sharpening
inter-imperialist struggles and the likelihood of popular rebellions turning
into revolutions. Moreover, the escalation of Zionist-orchestrated war fever
against Iran in 2011 promises the biggest regional war since the US-Indo-Chinese
conflict. The electoral campaigns and outcomes of Presidential elections in the
US, Russia and France will deepen the global conflicts and economic
crises.

During 2011 the Obama regime announced a
policy of military confrontation with Russia and China and policies designed to
undermine and degrade China’s rise as a world economic power. In the face of a
deepening economic recession and with the decline of overseas markets,
especially in Europe, a major trade war will unfold. Washington will
aggressively pursue policies limiting Chinese exports and investments. The White
House will escalate its efforts to disrupt China’s trade and investments in
Asia, Africa and elsewhere. We can expect greater US efforts to exploit China’s
internal ethnic and popular conflicts and to increase its military presence off
China’s coastline. A major provocation or fabricated incident in this context is
not to be excluded. The result in 2012 could lead to rabid chauvinist calls for
a costly new ‘Cold War’. Obama has provided the framework and justification for
a large-scale, long-term confrontation with China. This will be seen as a
desperate effort to prop up US influence and strategic positions in Asia. The US
military “quadrangle of power” – US-Japan-Australia-South Korea – with satellite
support from the Philippines, will pit China’s market ties against Washington’s
military build-up.

Europe: Deeper Austerity and
Intensified Class Struggle

The austerity programs imposed in Europe,
from England to Latvia to southern Europe will really take hold in 2012. Massive
public sector firings and reduced private sector salaries and job opportunities
will lead to a year of permanent class warfare and regime challenges. The
‘austerity policies’ in the South, will be accompanied by debt defaults
resulting in bank failures in France and Germany. England’s financial ruling
class, isolated from Europe, but dominant in England, will insist that the
Conservatives ‘repress’ labor and popular unrest. A new tough neo-Thatcherite
style of autocratic rule will emerge; the Labor-trade union opposition will
issue empty protests and tighten the leash on the rebellious populace. In a
word, the regressive socio-economic policies put in place in 2011 have set the
stage for new police-state regimes and more acute and possibly bloody
confrontations with workers and unemployed youth with no future.

The Coming Wars that End America
“As We Know It”

Within the US, Obama has laid the
groundwork for a new and bigger war in the Middle East by relocating troops from
Iraq and Afghanistan and concentrating them against Iran. To undermine Iran,
Washington is expanding clandestine military and civilian operations against
Iranian allies in Syria, Pakistan, Venezuela, and China. The key to the US and
Israeli bellicose strategy toward Iran is a series of wars in neighboring
states, worldwide economic sanctions, cyber-attacks aimed at disabling vital
industries, and clandestine terrorist assassinations of scientists and military
officials. The entire push, planning, and execution of the US policies leading
up to war with Iran can be empirically and without a doubt attributed to the
Zionist power configuration occupying strategic positions in the US
Administration, mass media and ‘civil society’. A systematic analysis of
American policymakers designing and implementing economic sanctions policy in
Congress finds prominent roles for such mega-Zionists (Israel-Firsters) as
Ileana Ros-Lehtinen and Howard Berman, Dennis Ross in the White House, Jeffrey
Feltman in the State Department, and Stuart Levy, and his replacement David
Cohen, in the Treasury. The White House is totally beholden to Zionist fund
raisers and takes its cue from the 52 Presidents of the Major American Jewish
Organization.

The Israeli-Zionist strategy is to
encircle Iran, weaken it economically and attack its military. The Iraq invasion
was the US’s first war for Israel; the Libyan war the second; the current proxy
war against Syria is the third. These wars have destroyed Israel’s adversaries
or are in the process of doing so. During 2011, economic sanctions, which were
designed to create domestic discontent in Iran, were the principle weapon of
choice. The global sanctions campaign engaged the entire energies of the major
Jewish-Zionist lobbies. They have faced no opposition from the mass media,
Congress or the White Office. The Zionist Power Configuration (ZPC) has been
virtually exempt from criticism by any of the progressive, leftist and socialist
journals, movements or grouplets – with a few notable exceptions.

The past year’s re-positioning of US
troops from Iraq to the borders of Iran, the sanctions and the rising Big Push
from Israel’s Fifth Column in the US means expanded war in the Middle East. This
likely means a “surprise” aerial and maritime missile attack by US forces. This
will be based on a concocted pretext of an “imminent nuclear attack” concocted
by Israeli Mossad and faithfully transmitted by the ZPC to their lackeys US
Congress and White House for consumption and transmission to the world. It will
be a destructive, bloody, prolonged war for Israel; the US will bear the direct
military cost by itself and the rest of the world will pay a dear economic
price. The Zionist-promoted US war will convert the recession of early 2012 into
a major depression by the end of the year and probably provoke mass
upheavals.

Conclusion

All indications point to 2012 being a
turning point year of unrelenting economic crisis spreading outward from Europe
and the US to Asia and its dependencies in Africa and Latin America. The crisis
will be truly global. Inter-imperial confrontations and colonial wars will
undermine any efforts to ameliorate this crisis. In response, mass movements
will emerge moving over time from protests and rebellions, and hopefully to
social revolutions and political power.

James Petras, a
former Professor of Sociology at Binghamton University, New York, owns a 50-year
membership in the class struggle, is an adviser to the landless and jobless in
Brazil and Argentina, and is co-author of Globalization
Unmasked