Industry, still pagued with too much productive capacity, means there's more cuts to come

Marx explained that an inherent and insoluble problem of the capitalist system is overproduction, or what is also referred to as overcapacity.  Capitalism produces too much.  He explained that this is due to the private ownership of the means of production, that it is impossible for workers to buy back what we produce as we produce more in value than we are paid in wages with the surplus going to the capitalist.  The incredible growth and productive power of the means of production only makes this problem worse.

These crisis are evident to all of us but the most recent one is of historic proportions.  Things will not be the same as this crisis transforms the economic landscape and along with it, the consciousness of its victims.  The auto industry bosses for example, have used this economic crisis to reduce the overcapacity in the auto industry.  For years, the auto bosses, like those in all of industry, have been cutting back, reducing workers and closing plants.  There were to many auto plants in the US, and the same scenario is playing itself out in China where overproduction/overcapacity in this industry as well as real estate is already a problem. 

The US Federal Reserve reported Friday that the US cut manufacturing capacity by 0.1% in April.  The Wall Street Street Journal reports that it is a "distinct feature of the recent downturn" that since 1948 this is only the second time that the US has "shed manufacturing capacity on a net basis."

The problem is that US manufacturing is still burdened with excess capacity.  "Manufacturers around the US are still sitting on a surplus of idled machines and assembly lines.", adds the Journal.  What waste.  Even in the best of times manufacturing capacity is around 80%; it was at 70% in April and only 65.1% last June. 

The Journal gives the example of a shipyard in the port of Mobile Alabama that just went bankrupt and auctioned off its equipment.  2000 people worked at the shipyard two years ago and there are 180 there today.  But, as one manager points out,, "We have plenty of tools to employ up to 1000 people".
Millions homeless and millions of vacant homes.  Millions out of work amid empty factories and idle machinery.  This is the insanity of the market, of the private ownership of the means of production.

No one describes it better than Marx described it over 150 years ago in the Communist Manifesto:

"It is enough to mention the commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilization, too much means of subsistence, too much industry, too much commerce."
The only solution to this is the socialization of production.  The rational and planned allocation of capital and a democratic socialist plan of production.

Surely, the catastrophe in the gulf of Mexico alone is proof of that.  The capitalist class have no right to govern society.