Doug Henwood wrote:
... I notice that a while back, you and other fans of "unfolding
crisis" were citing bourgeois sources for support. Now that most
bourgeois sources think that the worst of the financial crisis is
probably over, you're not citing bourgeois sources any more, eh?
Doug, let's review this tired debate now:
a) there is a certain tendency shared by you and other dear friends like
Leo and Sam, to poohpooh capitalism's deep-rooted, underlying crisis
tendencies;
b) the bourgeois press and sharpies like George Soros pick up on the
*short-term manifestations* of crisis, which some of others of us like
to point out to you when you call us chicken-littles, and which we'll
continue to do as the bubbles continue going pop;
c) when the bubbles stop popping for a little while, then guys like
Soros - to be sure, an intellectually honest liberal - proclaim the
crisis is "over", as you see below he did in December 1998;
d) but then we'd reply, underlying problems of overaccumulation and its
displacement(s) - including stressed financial markets and accumulation
through dispossession - continue, until some sort of more profound
resolution (the last being the Depression and World War II) occurs
through widespread devalorization and the restructuring of social
relations, leading to a new round of accumulation.
Louis Proyect recently called this argument 'millenarian' but I think it
is a reasonable way of looking at the world economy. (A longer version
is here: http://www.nu.ac.za/ccs/files/Bond%20SANPAD%20paper.pdf ) So
let's skip the trivial back-and-forth tit-for-tat... and below, tell us
something we don't know about the next surface appearance, ok? You watch
this much more closely than I do, and although you're probably right
that the FT writers aren't as frightened today as they were a month or
two ago, I remember how you recently also misread the FT lads on their
view of the SA economy (way too rosy). So let's keep their
pronouncements in perspective, ok?
Soros Expects U.S., UK Slump
2008-05-21 19:19:55 Chinadaily.com.cn/Agencies
Billionaire investor George Soros said the "acute phase" of the global
credit crisis is over, and the fallout will lead to recessions in the
United Kingdom and the United States.
"Financial institutions have been severely damaged and we are currently
in a situation that will probably, I think almost inevitably, result in
a recession certainly in the United States and most likely in England
also," he said in an interview with BBC Radio.
Policymakers in the U.S. and the UK have cut interest rates to protect
their economies from falling house prices, and banking losses from the
subprime mortgage collapse that now total $379 billion.
The Bank of England said last month that the credit crisis may abate,
and Governor Mervyn King says the economy may face "an odd quarter or
two" of contraction.
"We've had a pretty serious crunch, but the acute phase is behind us,"
Soros said.
"Now we have to feel the effects. In the case of the UK, you've had a
housing bubble that in terms of price increases has been greater than in
the US."
UK house prices had their first annual decline since 1996 in April after
tripling in the past decade, reports by HBOS Plc and Nationwide Building
Society have showed.
Home prices in 20 U.S. metropolitan areas fell in February by the most
on record. The S&P/Case-Shiller home-price index dropped 12.7 percent
from a year earlier, the most since the figures were first published in
2001. The gauge has fallen every month since January 2007.
Soaring interbank borrowing costs led to the collapse of Bear Stearns &
Cos. earlier this year and sparked a run on Newcastle, England-based
mortgage lender Northern Rock Plc in September.
European Central Bank President Jean-Claude Trichet refrained from
saying that the worst of the credit crisis is over, in an interview with
the BBC Radio, broadcast on Monday.
He said the world faces "an ongoing, very serious market correction".
"We're entering a period of much greater instability because we've got
the threat of recession and at the same time the threat of inflation,"
Soros said.
***
Soros says the crisis is over but bear market will persist
Independent, The (London), Dec 8, 1998 by Diane Coyle Economics Editor
GEORGE SOROS, the superstar financier and pessimist about the financial
markets in which he made his fortune, said yesterday he thought the
global crisis was over.
But he warned that there would be after-shocks and further weakness in
the markets. "I still think we are in a bear market," Mr Soros said at
the London launch of his new book, The Crisis of Global Capitalism.
"The shock is probably behind us; it is the after-effects that are going
to affect markets and economies," he said, adding that prospects look
much brighter now than two months ago.
"The financial markets have staged a remarkable recovery. I did not
anticipate the extent of the recovery." Indeed, Mr Soros started his
presentation with great modesty, stating: "I'm very often wrong."
When asked to justify his description on the book cover as "an authentic
financial genius" by predicting where the FTSE 100 index would be at the
end of next year, he joked: "I know the number exactly, but I'm not at
liberty to disclose it."
However, he did not entirely disappoint those looking for out-and- out
pessimism. Mr Soros, reputed to have made pounds 1bn forcing sterling
out of the European Exchange Rate Mechanism in September 1992, warned
that the pound would be vulnerable to speculation if the UK stayed out
of the euro.
He added that the UK would also face risks if it stayed out. Mr Soros
reserved his greatest bearishness for the state of the world economy,
arguing that there are strong deflationary pressures caused by
overproduction. For the core stockmarkets that meant severe pressure on
profit margins. While lower interest rates were welcome, it might not be
enough to prevent a downturn, he said. The compelling interest of his
new book is, of course, that it is essentially a confession. A man who
has made billions in the markets has concluded that they must as a
matter of urgency be reformed. Capital flows from `core' countries such
as the US and UK to emerging markets have dried up, and Mr Soros said a
new system of credit insurance was needed to rebuild the global economic
link. The crisis had also revealed the need for more international co-
operation between national regulators. However, he defended speculative
hedge funds against charges that they caused the near-meltdown this
summer. "I don't think they can or should be singled out," he said, just
a touch impatiently.
Is it pollyanna-ish to say that while the risk of total financial
implosion is shrinking, if not to zero, the U.S. economy probably
faces years of trouble? If it is, I plead guilty, but that doesn't
sound too giddy to me.
Doug, since "total financial implosion" is as much a risk as an invasion
from Mars, let's talk about something interesting, like how the vast
systems of crisis-contagion and crisis-displacement and devalorization
of overaccumulated fictitious capital now react. Who gets screwed next?
At the conference in honour of Jane D'Arista at U.Mass a few weeks ago,
she thought the commodity markets were the next bubble; my sense is that
carbon markets could be run up to $1 trillion soon enough, as another
site for reckless financial gambles (backed by cap-'n-traders from
U.Chicago to Washington enviro NGOs). If you're sitting near Wall
Street, what are you hearing about how fast money's moving? When will
the US$ really take its overdue pounding?
So let's not talk about crisis if it gets your nose out of joint, but do
tell us something new, comrade.
And Max, this reply is unworthy of you. Your defense of the Brookings
liberals is way too nuanced for me - or maybe, if you've not read Ben
Fine on the "post"-Wash Con, not nuanced enough.
-------- Original Message --------
Subject: Re: [Pen-l] Naomi Klein: Beware of Obama's Chicago School of
Economics boys
Date: Sat, 14 Jun 2008 15:36:54 -0400
From: Max B. Sawicky <[EMAIL PROTECTED]>
To: [EMAIL PROTECTED], Progressive Economics <pen-l@lists.csuchico.edu>
References: <[EMAIL PROTECTED]>
<[EMAIL PROTECTED]>
<[EMAIL PROTECTED]>
<[EMAIL PROTECTED]>
You saw nuance, I saw drivel.
I've explained the vacuousness of the "Chicago" theme in re: Obama.
For details, check my posts.
The real thrust of NK's column is that BHO is not a socialist. That's
as far as she gets by way of negative description. This is not a newsflash,
nor a useful observation in the context of U.S. politics.
Here's another example, typical of the fact-free, nuance-free wave of
assertions:
"Furman, a Rubin disciple, was chosen to head the Brookings
Institution's Hamilton Project,
the thinktank Rubin helped found to argue for the free trade agenda."
The HP is not a "think tank." It's a project with a number of published
papers.
It does not argue for "the free trade agenda." It favors liberal trade
policies among
a myriad of other interests. It is not advocacy-oriented; it has
produced a raft of
papers. You could say they are planning policies for the next
administration (they
stayed out of the primaries). Rubin himself as I've noted in the past
is not in the same
place as he was in 1992 on trade.
I'm sorry, she's just babbling. Somebody could do better. Others have
done better.
I am jealous. I'd like to make nice money pontificating without the
need for tedious
research or the obligation to assemble a logical, substantive argument.
It's a great gig.
Patrick Bond wrote:
> Isn't that her point? Why not unite, rather than kvetch? And Max,
what's
your apparently malevolent agenda here, comrade? Y'all are sounding like
jealous bullies.
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