Economic crisis
Jan 25 2008 08:59
#32
ernie wrote:
There is another point that is carefully played down in the media: the huge cost of Northern Rock. This cost is approaching the same amounts as the US government are pouring into the US economy.
oisleep wrote:
agree with everything you've said, but your way out on the northern rock/us fiscal thing by the way
I think he might mean in terms of respective GDP. The underwrite to Northern Rock is about 2% of UK GDP, I think.
Jan 25 2008 10:59
#33
Every now and again, when things look black a gift appears out of nowhere. For the economic propaganda of the bourgeoisie, Jerome Kerviel, couldn't have come at a better time. They're already pinning the blame for the financial turbulence of the last week on him.
Jan 25 2008 16:46
#34
Demogorgon303 wrote:
ernie wrote:
There is another point that is carefully played down in the media: the huge cost of Northern Rock. This cost is approaching the same amounts as the US government are pouring into the US economy.oisleep wrote:
agree with everything you've said, but your way out on the northern rock/us fiscal thing by the wayI think he might mean in terms of respective GDP. The underwrite to Northern Rock is about 2% of UK GDP, I think.
true but the support is of a completely different nature
the us fiscal thing is bottom line money out the door stuff of about $150bn(and that's not even counting the $4 trillion of accumulated tax cuts made by bush in 2001 & 2003, 37% of which went to the richest 1% of americans)
the northern rock stuff, however distasteful it is to see, is only taking on some contingent liabilities, the value of which are well covered by the assets on northern rock's books which the govt would have access to and in addition to that the bank of england lending is at market rate plus 1%, which is actually a transfer of value from private shareholders to the public purse
the guarantees that the govt will provide on the bond issuance dreamt up by goldman sachs however will probably end up being money out the door (which could be a few billion over the duration), as will be the £30m odd that goldman's will pocket for a few days work
don't get me wrong though, i'm not supportive of free marketers running to the govt to get support when it goes tits up and all the associated moral hazzard stuff, just when talking about these kind of things it's useful to be clear about what's happening so it can be criticised for the right reasons and with the right knowledge, and the message not lost by muddling up what's actually going on
Jan 25 2008 16:48
#35
The new package agreed by Bush and the Democrats amounts to giving money away. Capitalism doesn't work like this. This is an extremely short term and counter-productive measure. The Japanese state tried exactly the same thing several years ago and it did nothing to attenuate the crisis - au contraire.
The complete bankruptcy of the bourgeoise's explanations for the economic crisis is shown in the serious attempts to pin the worse effects of the recent crisis on poor old Jerome.
Jan 25 2008 17:20
#36
baboon wrote:
The new package agreed by Bush and the Democrats amounts to giving money away. Capitalism doesn't work like this. This is an extremely short term and counter-productive measure. The Japanese state tried exactly the same thing several years ago and it did nothing to attenuate the crisis - au contraire.
The complete bankruptcy of the bourgeoise's explanations for the economic crisis is shown in the serious attempts to pin the worse effects of the recent crisis on poor old Jerome.
surely it don't reflect to well on the bourgeoise that one chancer can send the economy down the shitter either.
Jan 25 2008 17:45
#37
As a dashing young bourgeois myself, I can safely say my reputation means nothing to me.
Jan 25 2008 17:51
#38
Carousel wrote:
As a dashing young bourgeois myself, I can safely say my reputation means nothing to me.
take me with you!
I'll sell my soul for a fast buck, fast woman and faster cars.
Jan 28 2008 15:19
#39
It doesn't reflect well on the bourgeoisie at all but it's not one chancer but the economic system as a whole that's going down the pan.
There's a lot of talk from the economic druids about "decoupling", ie the US economy is not primordial now given the economic "miracles" of China, India and the rest of Asia. This is nonsense. Who's going to buy all the products that these countries produce - their poverty-striken workers? And interest rates cuts in the US are extremely bad news for financial stability in Asia, China in particular.
Jan 28 2008 16:06
#40
But baboon, the whole economic system goes down the pan every so often. Print money in the 70's, fiscal restraint in the 80's, emerging markets in the 90's, dot com bust in the 00's, decoupling in the 10’s. Each wave has pushed communism further into the margins, rather than driven the working class more deeply into its embrace. The “crisis” is just a melodramatic word for austerity, and there’s no level of suffering achievable that’ll render communism either necessary or desirable.
Jan 29 2008 11:03
#41
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But baboon, the whole economic system goes down the pan every so often.
All too true. It's the ability of the system to get out of said pan that's the problem.
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Print money in the 70's, fiscal restraint in the 80's, emerging markets in the 90's, dot com bust in the 00's, decoupling in the 10’s.
Why did all these things happen?
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Each wave has pushed communism further into the margins, rather than driven the working class more deeply into its embrace.
Depends how you define communism. If you mean allegiance to the CP or a programme, perhaps yes. If you're talking about the ability of the working class to organise itself and fight back this made both advances and retreats throughout the 70s and 80s. We've just come out of a very long and deep period of retreat, but there are plenty of reasons to be optimistic.
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The “crisis” is just a melodramatic word for austerity, and there’s no level of suffering achievable that’ll render communism either necessary or desirable.
Austerity is a result of the crisis - it's not the crisis itself. As for the other comment, no-one claims there is a mechanical link between the degree of suffering and the movement towards communism. The level of suffering in WW2 was horrific but didn't produce a significant proletarian response. The situation in the 60s was comparatively prosperous but the economic dip in 67-68 provoked a wave of massive struggles across the globe.
Jan 29 2008 17:50
#42
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but there are plenty of reasons to be optimistic.
what are these reasons?
Jan 29 2008 18:01
#43
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Why did all these things happen?
Social preference.
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austerity is a result of the crisis - it's not the crisis itself.
Nonsense. If there was no suffering, it would hardly remain a crisis in the communist sense. Indeed, it would only be a crisis for communism.
Jan 30 2008 08:38
#44
oisleep wrote:
what are these reasons?
The fact that the working class exists with its revolutionary potential intact. The fact that it is, albeit slowly, beginning to get off its knees and rediscover the path of struggle. The fact that it is struggling to develop its consciousness, as shown by the appearance of political groups around the world, the existence of sites like libcom and the discussions taking place here.
Jan 30 2008 10:59
#45
Demogorgon303 wrote:
Quote:
Each wave has pushed communism further into the margins, rather than driven the working class more deeply into its embrace.Depends how you define communism. If you mean allegiance to the CP or a programme, perhaps yes. If you're talking about the ability of the working class to organise itself and fight back this made both advances and retreats throughout the 70s and 80s. We've just come out of a very long and deep period of retreat, but there are plenty of reasons to be optimistic.
My word Demo, that actually sounds...libertarian. 
Jan 30 2008 11:06
#46
Quote:
My word Demo, that actually sounds...libertarian.
You sound surprised?
Jan 30 2008 11:14
#47
Apologies, comrade!
Jan 30 2008 11:26
#48
By the way, has anyone noticed that the IMF has made the astonishing demand that governments think about using fiscal stimuli to get the world economy out its current hole?
Leaving aside the total hypocrisy of the western bourgeoisie towards their weaker siblings (who are always told to cut, cut, cut) this about-face in official economic policy shows the level of fear that's beginning to grip the bourgeoisie.
Jan 30 2008 11:50
#49
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the level of fear that's beginning to grip the bourgeoisie.
As a dashing young bourgeois myself, I can safely say my already minuscule level of fear continues to decrease daily.
Jan 30 2008 12:51
#50
Carousel, who I understand is Lazy Rider in disguise, is one the proponents of the reactionary "it's always been like this" argument - the "nothing's changed, what's new" concept. But note how in this case he keeps to the last 30 years of capitalism's 200 odd years history.
The position of the ICC on the economic crisis is that it came back with force in the early 70s and each recession since then - there's been about five - have got measurably worse. The mechanisms of state capitalism have succeeded in staving off the worse effects of the immediate crisis only to pile up the contradictions which we are beginning to see emerging now.
Jan 30 2008 13:05
#51
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one the proponents of the reactionary "it's always been like this" argument - the "nothing's changed, what's new" concept
Entertaining this thought for a moment, it raises the question of what is reactionary, and what is it’s opposite? Communism is nothing without “capital”. So much so that it really props it up, it is integrated as another decadent, crisis ridden, bourgeois institution. It is as reactionary as its own negation. In the prevailing situation, the choice is between remaining a revolutionary and remaining a communist.
Jan 31 2008 12:32
#52
Yes, everything is nothing and nothing is everything
Feb 17 2008 17:52
#53
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/02/13/cnusa113.xml
According to this article, defaults are now spreading from the "sub-prime" market into the "normal" market. It's no longer limited to housing, "It is spreading to credit card debt, auto debt, and now student loans. On top of that we think corporate defaults will rise from 1.1pc to between 5pc and 9pc over the next 12 months".
Things aren't looking good for Japan either as the global financial community begin to suspect a hidden time bomb of bad debt in the Japanese financial structure. There are also worries that contraction in Japan and other Far East economies will combine with an American retrenchment to hit China hard.
Nasty!
Feb 26 2008 23:36
#54
I'm surprised this week’s 50% hikes in food prices haven't drawn the usual set of clucks from the chicken-littleists staring upwards at capitalism collapsing like the proverbial sky falling in. The adjustment to the post-fossil fuel world, it’s a crisis in so far as it marks a turning point, but is that all that’s meant by “crisis” when the aficionados of decadence chant their incantations?
Feb 28 2008 09:01
#55
Today's Telegraph carries a warning that the soaring Euro is going to seriously damage the Eurozone economy. In an apparent taste of what's to come, BMW are reportedly laying off up to 6000 jobs. The collapse of the dollar is turning into an old-fashioned devaluation and is effectively forcing the rest of the world to pay for America's crisis.
Mar 4 2008 08:45
#56
This interesting article in the Telegraph warns that the current explosion in the commodity markets (which is one of the main drivers behind consumer price inflation) is at least partially based on speculation.
Mar 4 2008 11:44
#57
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is at least partially based on speculation
As opposed to what? I speculate the price of agricultural land will rise as it is turned over to production of fuel, so much for your commercial property crash comrade. Tell us what commodity prices are normally based on Demo, or is your analysis limited to what the papers say is “interesting”?
Mar 4 2008 12:20
#58
Lazy, the commercial property crash has got nothing to with agricultural land, it refers primarily to urban office space and the like. That's why the UK's biggest property fund had to close its exit doors after investors started to flee after the downturn last year.
My point is that the normal presentation of commodity price inflation in the press (and on the television news, when it bothers to mention it) is due to supply constraints. While oil has been rising for a while, the spikes in many other commodities started last year at the same time as the credit crunch started to drive people out of shares. Hence the commodity bubble described in the article I linked to above.
Mar 4 2008 12:40
#59
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the commercial property crash has got nothing to with agricultural land
Yeah mate. Like inflation’s got nothing to do with house prices.
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the normal presentation of commodity price inflation in the press (and on the television news, when it bothers to mention it) is due to supply constraints
No it's not. It’s notoriously speculative, but then, demo, what do you think they’re speculating on? You guessed it - future supply and demand. Have you never seen “Trading Places” with Eddie Murphy? It’s where all the Telegraph journos get their interesting insights from.
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Commercial property values, especially in the City of London office market, have dived amid fears of a recession brought on by the global credit crunch.
Ha ha. The Guardian strikes again. Perhaps you could give an example of a particular piece of commercial property in the City of London that’s going for a song. Once again the reports of amateurs, to amateurs, in the Guardian and the experience of those actually in the market is entirely different.
agree with everything you've said, but your way out on the northern rock/us fiscal thing by the way