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 Yoza rated 8 months ago - I find it a little strange that I am the first to give this piece the thumbs up. This article is an excellent analysis of the problems underlying the current economic meltdown, most poignantly:"...One financial corporation chief writing in the Financial Times captured the basic problem running ...
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5 Reviews
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- del35 rated 7 months ago
- This is an important article for any person interested in a glimpse of the horrors that threaten the global economy.The conclusion of the linked article is the following: "Yes, global capitalism may be resilient. But it looks like its options are increasingly limited. The forces making for the long-term stagnation of the global capitalist economy are now too heavy to be easily shaken off by the economic equivalent of mouth-to-mouth resuscitation."
- WAYN rated 7 months ago
- From the page: \"Capitalism in an Apocalyptic Mood\" I can only think of one word to describe the future of the American economy, KABOOM
- Yoza rated 8 months ago
- I find it a little strange that I am the first to give this piece the thumbs up. This article is an excellent analysis of the problems underlying the current economic meltdown, most poignantly:"...One financial corporation chief writing in the Financial Times captured the basic problem running through these speculative manias, perhaps unwittingly, when he claimed that "there has been an increasing disconnection between the real and financial economies in the past few years. The real economy has grown...but nothing like that of the financial economy, which grew even more rapidly - until it imploded." What his statement does not tell us is that the disconnect between the real and the financial is not accidental, that the financial economy expanded precisely to make up for the stagnation of the real economy.
The stagnation of the real economy stems is related to the condition of overproduction or over-accumulation that has plagued the international economy since the mid-1970s. Stemming from global productive capacity outstripping global demand as a result of deep inequalities, this condition has eroded profitability in the industrial sector. One escape route from this crisis has been "financialization," or the channeling of investment toward financial speculation, where greater profits could be had. This was, however, illusory in the long run since, unlike industry, speculative finance boiled down to an effort to squeeze out more "value" from already created value instead of creating new value. ".
It should come as no surprise to anyone, not affected by neo-liberal 'newspeak', that the various financial institutions which infest this planet do not create wealth but actually usurp wealth in return for the unsustainable illusion of 'growth'.
The article makes the point that the dot.com bubble ameliorated the effects of the Asian crisis and the bursting of the dot.com bubble was ameliorated by the property speculation bubble which was the result of Greenspan dropping the Federal Reserve interest rate to %1 in 2003. Begging the question: What will ameliorate the consequences of the bursting of the real estate bubble? This is where it starts to get real ugly: "For instance, the U.S. government might pull the economy out of the jaws of recession through military spending. And, indeed, the military economy did play a role in bringing the United States out of the 2002 recession, with defense spending in 2003 accounting for 14% of GDP growth while representing only 4% of the overall U.S. GDP. According to estimates cited by Chalmers Johnson, defense-related expenditures will exceed $1 trillion for the first time in history in 2008.
Stimulus could also come from the related "disaster capitalism complex" so well studied by Naomi Klein: the "full fledged new economy in home land security, privatized war and disaster reconstruction tasked with nothing less than building and running a privatized security state both at home and abroad." Klein says that, in fact, "the economic stimulus of this sweeping initiative proved enough to pick up the slack where globalization and the dot.com booms had left off. Just as the Internet had launched the dot.-com bubble, 9/11 launched the disaster capitalism bubble." This subsidiary bubble to the real-estate bubble appears to have been relatively unharmed so far by the collapse of the latter. "
- Reasonablib rated 8 months ago
- "Global finance capital, however, resisted any return to state regulation. Nothing came of the proposals for Tobin taxes. The banks killed even a relatively weak "sovereign debt restructuring mechanism" akin to the U.S. Chapter Eleven to provide some maneuvering room to developing countries undergoing debt repayment problems, even though the proposal came from Ann Krueger, the conservative American deputy managing director of the IMF. Instead, finance capital promoted what came to be known as the Basel II process, described by political economist Robert Wade as steps toward global economic standardization that "maximize [global financial firms'] freedom of geographical and sectoral maneuver while setting collective constraints on their competitive strategies." The emphasis was on private sector self-surveillance and self-policing aimed at greater transparency of financial operations and new standards for capital. Despite the fact that it was finance capital from the industrialized countries that triggered the Asian crisis, the Basel process focused on making developing country financial institutions and processes transparent and standardized along the lines of what Wade calls the "Anglo-American" financial model."
- scrabbleddie rated 8 months ago
- The world economy is artificially supported by the Chinese and the U.S. is falling into a war based economy to postpone our financial meltdown.
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