The point is that "demand management" is an ALTERNATIVE to emancipation, not a path to it.
On Wed, Oct 9, 2013 at 8:01 AM, Robert Naiman <[email protected]>wrote: > I don't get what the point of this is. Any government action to boost the > economy during a recession "rigs the market and boosts company profits" in > exactly the same way. Refusing to do this is Hoovernomics. > > > > > > > On Wed, Oct 9, 2013 at 9:19 AM, Louis Proyect <[email protected]> wrote: > >> On 10/9/13 9:48 AM, Robert Naiman wrote: >> > Woot! Another victory over the Rubin-Summers cabal. Keep interest rates >> > low until measured unemployment is 4%! >> > >> > >> http://thehill.com/blogs/on-the-money/budget/327359-obama-to-nominate-yellen-as-federal-reserve-chief >> > >> >> >> http://www.newstatesman.com/business/2013/09/quantitative-easing-has-rigged-market-boosting-company-profits >> >> New Statesman >> Quantitative easing has rigged the market, boosting company profits >> >> We can't go on like this... >> By Stewart Cowley >> Published 19 September 2013 >> >> In the history of industrial relations the clash between workers and >> management has always come down to: "How can we be paid more for less >> work?". This applies to both sides of the employment divide. The >> Tolpuddle Martyrs, the first union members, were created out of a strike >> to prevent a pay cut and ever since then all industrial disputes have >> had at their heart wages and hours worked. >> >> Karl Marx recognized the conflict and condensed it into the >> "‘Exploitation Rate" which essentially asks the question: ‘How many >> hours a day does it take for capitalism to make a profit?’ The more >> hours a day that a capitalist extracts from each worker in excess of >> what is needed to cover the cost of production, the greater the >> Exploitation Rate. Capitalists seek to maximize it, workers seek to >> minimize it. >> >> At least conceptually the Exploitation Rate is a useful way to frame >> your thoughts around the relationship between capital and labour. But >> also it’s actually possible to get an idea how it has changed over time >> especially since the onset of the recent financial crisis. Using >> averages of hours worked, people employed and the profits made by US >> companies as a whole you can get a handle on the time at which, on each >> working day, on average, America begins to make a profit. In 2006 it was >> about 12:30pm. But since then it has dropped to about 11:45am which >> might not sound like very much but in the context of the working day it >> is an 8 per cent increase in the Exploitation Rate. >> >> This effect has allowed American companies to start pumping out profits >> even in the midst of one of the worse recessions that the Western world >> has ever seen – the stock market has risen by over 90 per cent since its >> 2009 trough, while real wages have increased by only about 1.5 per cent. >> Workers now work longer and for less and the divisions between capital >> and labour have increased. >> >> We have a terrible tendency to believe that everything in economics >> reverts back to some kind of historic norm. This isn’t surprising given >> that our experience confirms this; all recessions are mere blips and >> normal service can be expected to resume after a brief period of time >> and we return to a path of enduring and rising prosperity. But something >> has changed in our economies; the nature of employment is fragile – >> underemployment through increased part-time working, zero-hour contracts >> and no-pay internships have fundamentally reduced the bargaining power >> of labour. Rising pay isn’t going to be the thing that starts to reduce >> the Exploitation Rate. >> >> So, if the Exploitation Rate is going to decline again, the only thing >> left is an increase in company costs. Western economies (particularly >> the US and UK) have benefited from ultra-low interest rates since 2008. >> Long-term borrowing costs have been kept low by the use of >> unconventional monetary policies like quantitative easing (QE). The >> markets have, effectively, been rigged in favour of stock owners and >> corporate bond borrowers and to the disadvantage of savers who receive a >> fixed income from the bond markets. It’s another factor that has >> increased the Exploitation Rate as interest payments haven’t eaten into >> profits. >> >> But this is set to change. The UK has stopped its QE program and the US >> is seeking an exit strategy from their Gargantuan pump-priming policy. >> So if there is a threat to company profits, and by extension the stock >> markets going forwards, it comes from the right-sizing of bond yields >> and not from the pay demands of workers. >> >> To reinforce this, the shock decision by Larry Summers to withdraw as a >> candidate for the top slot at the Federal Reserve caused bond yields to >> fall, the US dollar to weaken and stock markets to rally. Summers had >> been associated with stopping the process of QE earlier than his rival, >> the current deputy chair Janet Yellen. The episode only serves to >> reinforce the idea that we have a set of asset classes hopelessly >> dependent on the continuation of a policy that serves no purpose other >> than to perpetuate a collective desire to avoid reality. If I was Larry >> Summers I’d be pretty happy right now – at least I won’t now go down in >> history as the guy who bust the stock market. >> >> >> >> _______________________________________________ >> pen-l mailing list >> [email protected] >> https://lists.csuchico.edu/mailman/listinfo/pen-l >> > > > > -- > Robert Naiman > Policy Director > Just Foreign Policy > www.justforeignpolicy.org > [email protected] > > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > > -- Cheers, Tom Walker (Sandwichman)
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