The result of California's deregulation of electricity came first. Another crisis was the swoon of the stock market. But Wall Street's rise was a triumph of myth over reality, of share prices out of ratio to corporate earnings. In the meantime, the mainstream misses the story when it comes to the force driving economic crises. One result is that industry after industry has produced more than can be profitably sold to workers.
Business inventories rise and retail sales fall.
U.S. exports and imports decline. Workers get pay cuts and layoffs. President Bush has suggested that the U.S. economy may be facing a recession. But over 150 years ago, Karl Marx and his friend Friedrich Engels called a recession a crisis of overproduction. They showed how overproduction caused workers' buying power to fall relative to the prices of the goods and services their labor produced.