Stock markets in the US and Europe have bounced up during August. Indeed, after reaching a new low on July 24, they've now recovered by 20%. It seems that there is some renewed optimism that capitalism is not going to slip into recession after all, but can make a steady recovery. But beneath all the hype the cruel realities of the economic data in America, Europe and Japan remain unchanged.
The mood of optimism about the world economy that arose during the summer months has now dissipated. The talk now is that there is a real risk of the US slipping back into an economic recession, taking the rest of the world with it. World stock markets are still pricing in the scenario of a quick victory in Iraq. But even if this were to happen, it might briefly improve "confidence" but it won't get businesses out of debt and it won't create jobs. Bush's Iraqi adventure is no way out for world capitalism at best, and it could be the tipping point for a world economic depression at worst.
On the one hand, Blair prepares to send troops into Iraq behind the coattails of the Americans to overthrow Saddam. On the other hand, he and 'two Jags' Prescott prepare to send in troops to break the picket lines of the firefighters. If you adopt the policies of capitalism abroad, inevitably you will adopt them in domestic policy.