The Economic Crisis: Is it the end?

[TremulousTetra]

I'd not agree with the emotional tag, but yes I think the market has responded well to their announcement (up a further 6% today). Do I think it will be up every day? Of course not. There will be ups and downs, but long term, say in 12 months, I do think that this month will mark the bottom of the market.


And I disagree, as long as countries avoid protectionism which seems to be the consensus.

You mean like there protectionism of America invading Iraq to protect their oil supplies, and outmaneuver competitors?

 

[TremulousTetra]

No this is not like 1991or 1979.

Its global and accompnaied by an unprecedented crises of collapasing banks.

The economy has been overinflated for years - mainly as a deliberate policy becasue it was making a few people very very rich. Now we have a very long way to fall. I'd certinly put money on a 30s style depression. The billions and billions thats been poured into the sysytem will have to be accounted for - and thats going to take decades and it us who will have to pay for it.

There will not be - and they're should not be - a return to 'business as usual'.
The choice is wether we carry trying to patch up failed economic model which only benefits the very rich or we fight for an econony based on sutainabilty and meeting peoples needs.

Our politicains and the bankers have spunked all our futures on a fucking housing boom.

in my opinion the finance and housing booms were like taking paracetamol to cure a kidney infection, they will alleviate the symptoms, but are not addressing the fundamental cause. The fundamental cause is the falling rate of profit, for which there is no 'new antibiotic'on the horizon.

Edited to add;

A depression after all is a refusal by those who control Investment Capital, to invest in the production of the fundamental needs of society, because not enough to return can be made on the investment. Now the paracetamol solutions, finance and housing booms, and no longer apply sink which is in workers' pockets to buy goods, workers are laid off. Which means there are less workers to buy goods, which lays of more workers, in a vicious spiral downwards.

 

[audiotech]

I do think that this month will mark the bottom of the market.

There's $61 trillion in derivitives alone to sort out - take more than a month.

 

[Carousel]

I think that the ideas of left and right look more and more outdated everytime something happens. the 'right' don't really self identify as right wing anymore because of the connotations of racism etc but the 'left' still think of themselves as left wing

I don't think that the principles of socialism or working class self determination are outdated at all, but the post war framework of left and right wing that much of the left operates within is very outdated

Quite right. Victorian deliberation on matters of social justice have been superseded by the logic of collective action and the provision of public goods.

Hello anyway.

 

[david dissadent]

A depression after all is a refusal by those who control Investment Capital, to invest in the production of the fundamental needs of society, because not enough to return can be made on the investment.

A depression is an extended period of negative growth. It can have a great many causes but one the only one in the previous centuary in the west was caused (in part) by overcapacity not lack of investment.

The current crisis has been caused (superficialy) by the huge losses incurred by financial institutions meaning that they began rapidly withdrawing available credit from the markets as they no longer had the capital requirements to offer the credit and had to make provisions for write downs (this is the very very short version; there are about 10 threads running from August last year that I have written what I think is the long reason).

 

[david dissadent]

There's $61 trillion in derivitives alone to sort out - take more than a month.

You seem to be a bit confused about derivatives. What you are suggesting is like adding up every single insurance policy written and publishing its size (which would be gargantuan) and claiming that all of that still has to work through.

 

[david dissadent]

The crisis is a result of a central bank, fiat currency monopoly and fractional reserve banking. I agree that the recovery might take a long time, but only if the state keeps attempting to prop up the system.

The alternative to fiat currency is a precious metal based currency. These currencies have also suffered huge economic problems as well, often being prone to deflationary crises.

 

[david dissadent]

The economy has been overinflated for years - mainly as a deliberate policy becasue it was making a few people very very rich. Now we have a very long way to fall.

How do you define 'overinflated' and what do you mean by this?

 

[david dissadent]

What a load of old bollocks. The economy will eventually recover and things will go on as they always have. The only debate is about when that recovery will come.

We have almost certainly reached peak crude and condisate production (oil), definently gone past peak light sweet production and will hit peak all liquids production soon (by 2012 by the estimate of Chris Skerbowski, many others are close enough), we are also very close to peak natural gas production (although I tend to think that tight gas, shale gas, coal bed methane and the like will help alot) and so we are pretty close to peak energy (within perhaps 7 years outside). In my opinion we also face a high percentage likelyhood of runnaway global warming in the next decade or so.

I believe we have begun the 'age of convergent catastrophies'. I dont think we are ever going back to how things were. I could be wrong but I've not heard a good counter argument yet.

that we are in an unprecedented crisis of capitalism, created by the the imbalances of the system and the idiocy of those who run it,

I disagree strongly. It is far from unprecendented other than perhaps 'in lving memory'.

the radical Left (taken in its very broadest sense, not just the organised far-Left/anarchism) is not only powerless to meaningfully intervene in it but bereft of answers also.

Blimey, this when everyone and there neighbour is suddenly praising JM Keynes and calling for banks to be nationalised? Almost everyone has found a bit of radicalism left

People have for some time been speculating, not least on boards like this, on whether the radical Left's moment in history has truly been and gone,

Hmmmmm the left is alive and kicking in the rest of the world. It is only the Uk and US's where the left is really quiecsent

Will this be the end for radical Left ideas, and if not, what do they offer?

Blimey you seem to have read too much Fukuyama.

 

[Karamazov#1]

This isn't the end of capitalism not yet. George Soros believes that the financial system has totally collapsed. There is literally nothing left of it. It wasn't just dodgy US and UK mortgages it was everything it was the way that the whole captialist system has operated for thirty years and it finally ran out of juice. Though truth be told it had been running on empty for quite some time. The reason why nothing has happened in terms of goverments falling is that there is no radical left wing or right wing alternatives waiting in the wings. No mass movements for people to look to for answers. Certainly not here or in the USA anyhow.

 

[audiotech]

You seem to be a bit confused about derivatives. What you are suggesting is like adding up every single insurance policy written and publishing its size (which would be gargantuan) and claiming that all of that still has to work through.

My mistake it's $516 trillion and according to some it was a ticking time bomb a year ago.

The fact is, derivatives have become the world's biggest "black market," exceeding the illicit traffic in stuff like arms, drugs, alcohol, gambling, cigarettes, stolen art and pirated movies. Why? Because like all black markets, derivatives are a perfect way of getting rich while avoiding taxes and government regulations.

 

[david dissadent]

.... it was everything it was the way that the whole captialist system has operated for thirty years and it finally ran out of juice. Though truth be told it had been running on empty for quite some time.....

What are you trying to say? Since 1979 we have been inventing new technologies, creating new means of production, expanding markets and increasing wealth. How do you work out that it has been broken since then?

My mistake it's $516 trillion

Yes its your mistake. You dont seem to know what you are talking about.

 

[newbie]

There is no 'things going on as they always have'. The type of economy that's crumbling has only existed for a few decades, for instance. Economies change all the time, sometimes drastically.

However, the question asked in the opening post was not whether this is the end for the economy, but for the radical Left's (in all its forms, including left ideas as well as organisations) being able to purport to have answers.

The relative silence of the Left, despite a once-in-a-lifetime capitalist crisis, speaks volumes.

Looking on the bright side, nature abhors a vacuum and it seems plausible that that's as true of political thought and inspiration as it is of anything else.

 

[LLETSA]

Quote:
Originally Posted by LLETSA
that we are in an unprecedented crisis of capitalism, created by the the imbalances of the system and the idiocy of those who run it,

I disagree strongly. It is far from unprecendented other than perhaps 'in lving memory'.


Quote:
Originally Posted by LLETSA
the radical Left (taken in its very broadest sense, not just the organised far-Left/anarchism) is not only powerless to meaningfully intervene in it but bereft of answers also.

Blimey, this when everyone and there neighbour is suddenly praising JM Keynes and calling for banks to be nationalised? Almost everyone has found a bit of radicalism left



Quote:
Originally Posted by LLETSA
People have for some time been speculating, not least on boards like this, on whether the radical Left's moment in history has truly been and gone,

Hmmmmm the left is alive and kicking in the rest of the world. It is only the Uk and US's where the left is really quiecsent

Quote:
Originally Posted by LLETSA
Will this be the end for radical Left ideas, and if not, what do they offer?

Blimey you seem to have read too much Fukuyama.

Fair comment about it being the worst in living memory as opposed to the worst ever in its effects (so far), but I was getting at the fact that the primary causes and worldwide scope are unprecedented.

People might be praising Keynes and talking about nationalising banks, but in the opening post I did point out that those running the system itself are agreed on implementing policies traditionally associated with the left. Perhaps I should have added that they're doing this out of a perceived necessity, not radicalism.

Is it really only in the US and UK that the left (as in left politics and ideas, not just the organised left) is moribund? There are some parts of the world where it might, as you say, be alive and kicking, but there are few signs that it offers any alternative to capitalism. Unless I'm missing something.

Never read Fukuyama at all.

 

[newbie]

those running the system itself are agreed on implementing policies traditionally associated with the left. Perhaps I should have added that they're doing this out of a perceived necessity, not radicalism.

surely the left wants to take control of the levers of the economy, in this instance the banks, whereas our noble leaders are making it clear their notion of nationalisation in all but name leaves control with the bankers and simply pumps public money into their pockets.

 

[david dissadent]

People might be praising Keynes and talking about nationalising banks, but in the opening post I did point out that those running the system itself are agreed on implementing policies traditionally associated with the left. Perhaps I should have added that they're doing this out of a perceived necessity, not radicalism.

Is it really only in the US and UK that the left (as in left politics and ideas, not just the organised left) is moribund? There are some parts of the world where it might, as you say, be alive and kicking, but there are few signs that it offers any alternative to capitalism. Unless I'm missing something.

Evo Morales and Hugo Chaves are good examples of left of center people in power, China is theoreticaly Marxist and comunist parties are parts of coalitions in various Indian states. In Europes various different stripes of left wing parties regularly make up parts of the government especialy in places like Italy.

One of the problems for the far left is that most people in the west have foudn their standards of living massively improved over the past 50 years or so. For many people the current crisis has come out of nowhere. I have been reading about a predicted crises caused by trade imbalances for about 7 years now, for me it is not unexpected but I did not get the ferocity till summer 07. This time last year I was being regularly laughed at for my predictions of econmic gloom, even after the death of Bear.

Here in the Uk, with the exception of the greens and the antiglobalisation, people had no real interest in alternative economic models. Does not mean they are dead, just people were not listening.

Never read Fukuyama at all.

Sorry it was a bit of a joke. Back in about 1992 he wrote a book called "The End of History and the Last Man Standing" which he basicaly said that liberal capitalist democracy had won the wars of ideas and was the last system left. It was a bit of a piss take on Marxs ideas about historical determinism. I thought it was a bit funnish that someone who identified themself as 'left' would almost seem to be taking his ideas.

 

[Karamazov#1]

What are you trying to say? Since 1979 we have been inventing new technologies, creating new means of production, expanding markets and increasing wealth. How do you work out that it has been broken since then?

What i was referring to was the way the British and, to a slightly lesser degree, the US economy have both been structured around debt. The consumerism that has become so prevalent in this country is underpinned by high levels of credit card debt/store card debt, the house price boom underpinned by people taking out mortgages that they can't afford and will most likely never pay off (combined with a shortage of housing). You've had the banks lending far more than their total deposits. That is partly how we reached this situation. But only partly. Of course there have been new innovations, new production methods instituted but the "knowledge economy" that Blair/Brown announced was going to be the future of the UK was always a mirage. It was never going to replace the actual manufacturing of commodities and wasn't going to correct the fact the UK economy had become dangerously unbalanced after the collapse of manufacturing in over the previous forty years.

 

[LLETSA]

People might be praising Keynes and talking about nationalising banks, but in the opening post I did point out that those running the system itself are agreed on implementing policies traditionally associated with the left. Perhaps I should have added that they're doing this out of a perceived necessity, not radicalism.

Evo Morales and Hugo Chaves are good examples of left of center people in power, China is theoreticaly Marxist and comunist parties are parts of coalitions in various Indian states. In Europes various different stripes of left wing parties regularly make up parts of the government especialy in places like Italy.

One of the problems for the far left is that most people in the west have foudn their standards of living massively improved over the past 50 years or so. For many people the current crisis has come out of nowhere. I have been reading about a predicted crises caused by trade imbalances for about 7 years now, for me it is not unexpected but I did not get the ferocity till summer 07. This time last year I was being regularly laughed at for my predictions of econmic gloom, even after the death of Bear.

Here in the Uk, with the exception of the greens and the antiglobalisation, people had no real interest in alternative economic models. Does not mean they are dead, just people were not listening.

Sorry it was a bit of a joke. Back in about 1992 he wrote a book called "The End of History and the Last Man Standing" which he basicaly said that liberal capitalist democracy had won the wars of ideas and was the last system left. It was a bit of a piss take on Marxs ideas about historical determinism. I thought it was a bit funnish that someone who identified themself as 'left' would almost seem to be taking his ideas.

All those parties might be in or near to power, but none of this really relates to the questions in my opening post.

I'm perfectly aware of what Fukuyama said, but I haven't said anything about liberal democracy having won the battle of ideas, either.

 

[Dr Jon]

From the Caves, to the Moon, to the Caves

 

[goebfwai]

"Here in the Uk, with the exception of the greens and the antiglobalisation, people had no real interest in alternative economic models. Does not mean they are dead, just people were not listening. "

They are certainly listening now. The scientists and Stern's speech at Copenhagen is getting some pretty comprehensive coverage in the print media. I am starting to veer towards thinking it is roughly 50/50 now as to whether (1) the world bounces out of the recession as quickly as it entered it starting late 2009/early 2010 or (2) whether a decade long stagflation sets in. The risk of (2) all depends on the nature of the stimulus packages. Globalisation and speed of capital movements, information and news augers well for (1). The same forces that caused global trade to contract so quickly so deep, probably favours well a rapid bounce out. I think if governments could announce some sort of programme amidst a fanfare of publicity it would help. Massive 'green new deal' public works projects to defend coast lines and towns from rising sea levels, storm surge risks etc. Was reading in the Europe edition of the Wall Street Journal that The Netherlands are going to spend 1bnEuros a year this century to defend coastline against a metre. Civilian Conservation Corps style programmes to counteract climate change effects and promote food and energy security and resiliance. They need to promote more practical subjects like farming, building, engineering and science and entrepreneurial spirit in schools and colleges. Too many people chasing too few jobs these days. If everyone wanted to be an employee rather than an employee there would be no private sector jobs whatsoever. There need to be more people working at identifying opportunities and creating jobs for themselves and others, otherwise there will be no private sector left - can't have an entirely state run economy, what fun would that be!

 

[TremulousTetra]

I just mean that a lot of people seem to look back to pre-thatcher/neocon england rather than forwards for a model

This response is going to sound worse that it is meant to, but usually that kind of argument is a load of bollocks. It usually ends up with something like the IWCA, which on one hand I have a lot of respect for, but on the other I'd find it parochial and politically vacuous. I find it airy fairy, without substance, for example what is this model we should look forwards to?

I will hold my hands up, I'd do look backwards. I look backwards to the model of the social system of capitalism Marx developed, because it remains true today, does it not?

 

[Fruitloop]

Capitalism is in no kind of crisis, the ruling class are fucking the workers up the arse, and the workers are bending over and lubing up for it.

 

[TremulousTetra]

A depression is an extended period of negative growth. It can have a great many causes but one the only one in the previous centuary in the west was caused (in part) by overcapacity not lack of investment.

SPOT ON!!!! All depressions are caused by over investment, capital seeks investment veraciously. It is the over investment that triggers " The Tendency For The Rate Of Profit To Fall". They are to side's of the same coin. [that's why Keynes was wrong, he only understood half the problem.

The current crisis has been caused (superficialy) by the huge losses incurred by financial institutions meaning that they began rapidly withdrawing available credit from the markets as they no longer had the capital requirements to offer the credit and had to make provisions for write downs (this is the very very short version; there are about 10 threads running from August last year that I have written what I think is the long reason).

can you copy and paste a synopsis of the long reason?

 

[TremulousTetra]

Capitalism is in no kind of crisis, the ruling class are fucking the workers up the arse, and the workers are bending over and lubing up for it.

I have several groups of workers I come into contact with, who constantly complain to me. I listen very carefully, I think carefully about what they had said, and I'd make constructive suggestions, but they don't seem to do anything, so I understand your sentiment.

 

[Fruitloop]

I sympathise with both them and you. The costs of sticking your head above the parapet these days are so high, and the battles both practical and ideological are loooking pretty one-sided at the moment.
Hubris may yet be the downfall of our lords and masters though.

God I hope so.

 

[TremulousTetra]

What are you trying to say? Since 1979 we have been inventing new technologies, creating new means of production, expanding markets and increasing wealth. How do you work out that it has been broken since then?

I think his comments have to be placed in the context of the postwar boom, compared to that the last 37 years, have been broken. However, that is a mistake. For what we have experienced in the last 37 years, and more recently, is the norm. Slump is as inherent to capitalism as boom. Broken capitalism, is normal capitalism. It is inherently constructive and destructive.

 

[Fruitloop]

There's a psychological point here; the symptom is not simply an aberration from the normal functioning, rather it reveals the truth of the ‘normal’ order of things.

 

[TremulousTetra]

I sympathise with both them and you. The costs of sticking your head above the parapet these days are so high, and the battles both practical and ideological are loooking pretty one-sided at the moment.
Hubris may yet be the downfall of our lords and masters though.

God I hope so.

Yeah, I understand what you're saying. I do have empathy that I don't have to go through what they do, but is so frustrating. We are so many, they are so few, if we all spat at once we could drowned the bastards.

 

[TremulousTetra]

Looking on the bright side, nature abhors a vacuum and it seems plausible that that's as true of political thought and inspiration as it is of anything else.

and stasis.

 

[Carousel]

I look backwards to the model of the social system of capitalism Marx developed, because it remains true today, does it not?

Truth is measured in the advantages enjoyed by those who believe it.