Is the economic crisis ending? If it is, does that mean that the threatened public service cuts won't come, or will be smaller? Probably not; and no.
Almost a year ago we wrote in Solidarity: "The big nationalisations and government bail-outs of financial firms have moved the sharp end of the crisis somewhat, to point at governments rather than banks".
Governments could, and chose to, bail out big banks (and manufacturing companies, like General Motors), and prevent further big collapses like that of Lehman Brothers in 2008. The question then was whether the crisis would move on to a string of collapses in government finances, with governments unable to meet payments due and unable to borrow fresh funds abroad.
In the event, only small states, small enough for the IMF to bail them out although at the cost of hardship for their people, have come to the brink of financial failure: Iceland, Latvia, Hungary, Ukraine.
Flush with big bail-outs, able to borrow money from central banks at almost zero interest and then lend it on at higher rates, banks are now doing well. According to the Financial Times, City bonuses this Christmas will be 50% up on 2008, and no politician is doing more than bleating about it.
Share prices have been rising again. The Dow Jones US Total Stock Market Index and the FTSE 100 index, in Britain, hit bottom in March and have been rising since then.
But many sober bourgeois analysts are still cautious. Wolfgang Munchau put it most worriedly on the Financial Times website on 18 October.
"This bubble will burst sooner [than previous ones]... The single reason for this renewed bubble is the extremely low level of nominal interest rates..." [i.e. not some real revival in overall business profits].
After a while - after 2010, Munchau reckons - central banks' drive to push easy credit into the banking system will start to bring inflation. "Central banks might be forced to switch towards a much more aggressive monetary policy [high interest rates, tight credit] relatively quickly... A short inflationary boom could be followed by another recession, another banking crisis, and perhaps deflation".
Martin Wolf, also in the FT, puts it similarly: "Trying to make financial systems safer has made them more perilous. Today... neither market discipline nor regulation is effective. There is a danger... that this rescue will lead to still greater risk-taking and an even worse crisis... in the not too distant future".
The underlying imbalances which triggered trouble from early 2007, and full-scale financial panic from September 2008, are largely still there. There are still unsustainable mountains of debt distributed across the world economy.
A year ago, everyone in government circles was insisting that there must be a comprehensive reshaping and re-regulation of financial markets, and soon. The recovery in the financial markets has quieted that talk. Most plutocrats have negotiated the crisis quite deftly. The Financial Times reports (22 September): "While significant numbers of people have lost homes, jobs or businesses, found themselves on lower pay or faced with crippling debts... wealthy people in the UK have managed to hold on to their money during the financial crisis, with two-thirds actually increasing their wealth or keeping it at the same level".
The power of inertia and vested interests seems well set to stymie or limit any reform.
Which means, of course, that everything remains set up for a repeat of the September 2008 chaos in the event of new and unpredicted shocks to the system. And maybe even soon.
The financial-markets revival is much faster than any rise in real profits. According to the latest report from the Office for National Statistics (7 October) the manufacturing profit rate in 2009 quarter 2 stood at 6.7%, down from 13.1% in 2007 quarter 4.
The Financial Times again (27 August): "Business investment has dropped more sharply over the course of the recession than in the downturns of the 1970s, 1980s or 1990s.... Spending fell by 10.4 per cent over the second quarter... 7.6 per cent... in the first quarter... Investments ranging from building work to vehicles and computer software purchases fell [year-on-year] by 18.4 per cent, the sharpest year-on-year decline in at least 43 years".
Even if a "real" upturn starts, such an upturn is much slower to "trickle down" than a downturn. In downturns, bosses push down wages and tighten their control on the workforce. The upturn tends to start with bosses being able to produce more, and more profitably, by using their existing capacity more fully and squeezing more out of existing workers.
Although unemployment is still rising in the USA, in Britain it was the same in September as in August, at 7.9%. But the odds are that it will continue high, or even increase, for some time, even if the capitalist recovery is relatively vigorous.
But a relatively quick capitalist recovery might mean that the threatened public service cuts don't come, or are much reduced? On the contrary.
If there is an obvious lurch back into depression before the general election, then even David Cameron and George Osborn may hesitate at drastic public-spending cuts which push economic activity down further.
If, on the other hand, the financial-markets revival is continuing, and there are some signs of productive revival, then such dangers as that of a fall in the British government's credit-rating in international markets will loom larger. They will be bolder about using the period when they are best able to do unpopular things - straight after winning a general election, and while lots of people are still resigned to bad things being "necessary because of the crisis" - to push through drastic cuts.