[Marxism-Thaxis] The SWP and underconsumptionism
CeJ jannuzi CB:Just a general observation on Obama and the Obama administration doing things: Notice that a President has to get Congress to pass stuff to do any major move, and that there are enough rightwing Dems to thwart any major progressive moves. I know the left Obama skeptics/haters love to ignore this in order to blame Obama for betraying/failing the left and say I told you so , but... You mean like start WW III? No, actually he doesn't need Congress to do that. He needs Congress for an official declaration of war, I think. But de facto war, all it takes is a prez who embraces the imperium, and this one clearly has. You mean like send 30,000 more troops to Afghanistan? No, he doesn't need Congressional approval for that either. He needs to go to Congress periodically to get the required funding, whether regular, supplementary or covert budgets. ^^^ CB: I'm thinking of the moves that require Congressional approval ( Declaration of war is supposed to be by Congress, but the US is in a state of unconstitutional scofflaw on that issue) Yeah boo to Obama on 30,000 troops to Afghanistan ! Protest demonstration this Wednesday at the Federal building. Clearly embraced the imperium. More like cloudily siddled up to it. Hurrah on beginning the end of the war on Iraq, even if it's not good enough for CJ. It's a pass grade for Obama. Hurrah on stopping Star Wars ,a step away from WW III ^^^ What major piece of legislation has Obama gone to Congress with anyway? The Health Care bill(s) where he made statements that basically undercut any stance for universal coverage even before the process began? ^^ CB: Yeah , Health Care was the main example of Congress right wing Dems preventing better bills. Basically undercutting is in the same class as clearly embraced - putting things in a not quite accurate bad light. More stimulus is thwarted by Congress. The Congressional health care struggle seems to have moved employee free choice act to next year. Bailing out GM and Chrysler might have had better provisions for workers without rightwing members of Congress thwarting. ^ You mean close Gitmo? Well, he could order it closed and tell Gates to take money from the defense budgetS to get it done. He doesn't need Congress to close it. He could turn over all the detainees to the Hague, but the Amurkins wouldn't like them turning loose almost all of them for lack of evidence and lack of official charges. And Obama needs the Amurkins on his side. ^^^ CB: And like Executive Order permitting stem cell research, as important as closing Gitmo. Congress did passed the pay equity law. I don't know that O introduced it. Bush or McCain wouldn't have signed it. ^ Hey Amurkins, don't leave all that good work undone--SUPPORT OBAMA FOR PRESIDENT IN 2012! CJ ^^^ CB: Definitely support Obama in 2012 ! ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
Re: [Marxism-Thaxis] The SWP and underconsumptionism
CB:Just a general observation on Obama and the Obama administration doing things: Notice that a President has to get Congress to pass stuff to do any major move, and that there are enough rightwing Dems to thwart any major progressive moves. I know the left Obama skeptics/haters love to ignore this in order to blame Obama for betraying/failing the left and say I told you so , but... You mean like start WW III? No, actually he doesn't need Congress to do that. He needs Congress for an official declaration of war, I think. But de facto war, all it takes is a prez who embraces the imperium, and this one clearly has. You mean like send 30,000 more troops to Afghanistan? No, he doesn't need Congressional approval for that either. He needs to go to Congress periodically to get the required funding, whether regular, supplementary or covert budgets. What major piece of legislation has Obama gone to Congress with anyway? The Health Care bill(s) where he made statements that basically undercut any stance for universal coverage even before the process began? You mean close Gitmo? Well, he could order it closed and tell Gates to take money from the defense budgetS to get it done. He doesn't need Congress to close it. He could turn over all the detainees to the Hague, but the Amurkins wouldn't like them turning loose almost all of them for lack of evidence and lack of official charges. And Obama needs the Amurkins on his side. Hey Amurkins, don't leave all that good work undone--SUPPORT OBAMA FOR PRESIDENT IN 2012! CJ ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
Re: [Marxism-Thaxis] The SWP and underconsumptionism
CB: How are the big bourgeoisie making their money , as I assume they are ? I guess a minority of stocks and bonds could be doing well, while the majority suck. Or maybe I just don't understand that the real money is made in uhhh hedge funds and exotic financial instruments that aren't stocks and bonds ? I assume they get most of their money by inheriting it. How do they protect and invest that wealth? Looks like a lot of them have bet on Buffet to invest it for them. I don't know how 'protective' that is going to be in the next 5 years. Active investors seem to be caught up in leveraging and bubbles. First, they have cheap access to credit, which allows them to leverage/gear their bets. Second, they have advanced access to bubbles before the bubbles get too big, and they have adanced access to knowledge that allows them to exit early. Third, many have access to inside information--such as when a contract is going to be awarded, when an arm of a government somewhere is going to be privatized or float on a stock market, etc. It seems many right now are happy to get about 0% on their accumulated wealth because, hey, that's better than negative 'returns'. If you get deflation, that actually means you can make money (that has been the situation for the wealthiest of investors here in Japan). OTOH, if we see signs of inflation, there is going to be a 9-11 of bonds, just you wait and see. One class of active investor has all that I listed going for them plus this: they extract their share because they run funds. You know, guys like Bernie Madoff. CJ ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
[Marxism-Thaxis] The SWP and underconsumptionism
CeJ jannuzi I would say HH and FDR were birds of a capitalist feather. FDR ran on a campaign that criticized Hoover for his profligate spending, the result of budget increases that resulted in high deficits (at least up until that time), and his tax increases. In practice, both HH and FDR pursued both monetary and fiscal measures to address the perceived political crisis that was a result of an economic crisis (any time a politician has trouble get re-elected, the crisis becomes real to him). It's hard to liken Obama to either Hoover or FDR in terms of what he inherited. HH inherited a budget surplus and ran it into deficits. Obama inherits a deficit that is so enormous it is beyond human intelligence to comprehend. ^^^ CB: What is the US ( and Irish) national debt ? I recall that Reagan doubled the national debt from what it was accumulated from all Presidents before. ( Uh CB, there is google; smile) http://zfacts.com/p/318.html http://en.wikipedia.org/wiki/United_States_public_debt United States public debt U.S. debt from 1940 to 2008. Red lines indicate the public debt and black lines indicate the gross debt, the difference being that the gross debt includes funds held by the government (e.g. the Social Security Trust Fund). The second chart shows debt as a percentage of U.S. GDP or dollar value of economic production per year. Data from U.S. Budget historical tables at whitehouse.gov/omb and other tables listed when you click on the figure.The United States government debt, commonly called the public debt or the national debt, is the amount of money owed by the Federal government of the United States to holders of U.S. debt instruments. Gross Debt is the national debt plus intragovernmental debt obligations or debt held by trust funds like the Social Security Trust Fund. Types of securities sold by the government include, but are not limited to, Treasury Bills, Notes, Bonds, TIPS, United States Savings Bonds, and State and Local Government Series securities.[1] The annual government deficit refers to the difference between government receipts and spending. Logically, the deficit is equal to annual increase in the debt. However, there is certain spending (supplemental appropriations and the surplus tax receipts in the Social Security program) that add to the debt but are excluded from the deficit. For example, during 2008 the budget deficit was $455 billion but the national debt increased by $1 trillion, the first time it has done so in a single year.[2][3] The total debt has increased over $500 billion each year since FY 2003, considering both budgeted and non-budgeted spending.[4] Contents [hide] 1 History 2 Debt ceiling 3 Components 3.1 Public and government accounts 3.1.1 Estimated ownership 3.1.2 Fannie Mae and Freddie Mac obligations excluded 3.1.3 Guaranteed obligations excluded 3.2 Foreign ownership 3.3 Statistics and comparables 4 Risks and obstacles 4.1 Risks to the U.S. dollar 4.2 Long-term risks to financial health of federal government 4.2.1 Unfunded obligations 4.3 Recent additions to the public debt of the United States 4.4 Interest expense 5 Debt clocks 6 Calculating and projecting the debt 7 See also 8 References 9 External links ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
[Marxism-Thaxis] The SWP and underconsumptionism
Finally, hey it's almost time to organize to get Obama re-elected. I know what he can run on: Don't let all our good work go unfinished. CJ ^^^ CB: And don't forget : Palin is a fascist. ( no smiley face; pace Trotskyists' analysis) ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
Re: [Marxism-Thaxis] The SWP and underconsumptionism
JF: Charles [B] is right about that. Obama's policies more closely resemble those followed by Herbert Hoover rather than those followed by FDR. An unabashed Keynesian would criticize Obama for not directing enough of his spending to lower income people, who, according to Keynes, would have a higher propensity to consumption than more affluent people. I would say HH and FDR were birds of a capitalist feather. FDR ran on a campaign that criticized Hoover for his profligate spending, the result of budget increases that resulted in high deficits (at least up until that time), and his tax increases. In practice, both HH and FDR pursued both monetary and fiscal measures to address the perceived political crisis that was a result of an economic crisis (any time a politician has trouble get re-elected, the crisis becomes real to him). It's hard to liken Obama to either Hoover or FDR in terms of what he inherited. HH inherited a budget surplus and ran it into deficits. Obama inherits a deficit that is so enormous it is beyond human intelligence to comprehend. I would also say under a capitalist system there are a number of ways to hurt consumption. One would be to run deficits so high that government borrowing squeezes credit. Under the current US system, the idea appears to be to lower interest rates so much that it encourages borrowing. But this could be two sides of the same coin--or even the same side. You can slash interest rates to zero, that doesn't mean people and companies who actually produce something will want to borrow--expand their production or borrow in order to consume now. Moreover, if you have many people who rely, at least in part, on interest income, keeping interest rates low could discourage consumption. That would be people like pensioners or anyone who still saved money because it brought some return in interest on the account. Do any Americans do this? What is the reward doing it now with interest near zero? But bond investing look troubled and might I point out that overall if you hold stocks you haven't seen any overall gain since 2000. In fact, if you take a 15 year view of stocks and bonds, they both suck. Obama is unlike FDR in that the US he inherited never really got out of the mentality that got them through WW II. You could say, in that sense, he is the post-FDR president (since FDR's role was to save American capitalism while getting everyone to support WW II). Still, I like comparisons to Carter better (so far). Also, if Hoover gets slammed with being anti-free trade because of the Hoot-Smawley act passed while he was in office, you also have to point out that a world war isn't really a period of capitalist free trade or globalism (i.e., the FDR follow up), so it would be hard to call FDR an anti-thesis of Hoover on trade. The current policy, inherited from the Bushwaites, is apparently to EXPORT the US's economic crisis through monetary and fiscal policies that devalue the dollar. Yes, a cheap dollar is supposed to encourage exports because the goods are cheaper. But the problem is it saddles other economies with far worse economic crises of their own, thereby limiting any export boom. A good example would be Japan, now stuck with holding huge amounts of increasingly worthless dollars while having to export goods and services denominated in an increasingly high yen (while Japanese live in a country that has had near-zero interest rates for the last 15 years!). I would say much of the current crisis was caused by Bush's policies, many of them supported by, as usual, a Repug-Demoncrat consensus. War, huge deficits on war, high oil (most of all because Iraqi oil was taken off the world market, and that drove up the price of other high grade crudes, and plentiful high grade is what makes Iraq the envy of so many other countries). And then this 'need' to end trade deficits by cheapening the dollar (which in turn drove the oil pricing bubble). Finally, hey it's almost time to organize to get Obama re-elected. I know what he can run on: Don't let all our good work go unfinished. CJ -- Japan Higher Education Outlook http://japanheo.blogspot.com/ We are Feral Cats http://wearechikineko.blogspot.com/ ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
Re: [Marxism-Thaxis] The SWP and underconsumptionism
Does anyone here remember in the waning months of the Bushwa's last term how they sent out everyone a 300 dollar check for 'economic relief'? I think you got one if you filed your federal income tax returns properly. It wasn't in any way a tax refund (although I also remember Bush was a big tax cutter, which is one of the ways he raised the federal deficits so much--in addition to pouring over a trillion dollars a year on militarism in the name of 'security' and the 'war on terror'). That sounds like something postmo Keynesian might argue for, but it didn't seem to have much of an effect on consumption. At any rate, it doesn't look like those depending on interest income are going to spend more--that is because they have far less interest income to spend. Meanwhile, those in debt are trying to pay off debt and/or save, with the latter getting no returns. It looks like a 'critical mass' of people have hit the wall and can't borrow anymore. So it doesn't look like you are going to see any increase in consumption on their part. The Obama administration ought to give each household 1000 dollars and cut the military budgets by 500 billion dollars, starting NOW. That would do it. Of course, there would be a mlitary coup in answer to it (most likely with ironmaiden Clinton taking charge of things with Gen. Gates in a junta). But if that didn't happen, then the Obamaites ought to apologize to Iraqis in order to avoid war reparations and use the savings to provide health care and adequate nutrition to all Americans. Then I would be all for war crimes trials for Bush Cheney Rice etc. Seeing how much dignity they brought to the lynching of Saddam Hussein, Bush etc. could be executed on pay-per-view TV, with the profits going toward the national debt. Oops. I'm letting my fantasies carry me away. The real outrageous fantasy comes in saying that Obama would ever do such a thing as cut the military budgets. I'm glad the boys at the Pentagon taught him how to salute the gyrines and flyboys who ferry him around. It makes it look like he really is in charge in DC. Now if someone would only teach him that you bow to the emperor first and then shake his hand. You don't do both at the same time. For your edification: http://finance.yahoo.com/news/Americans-save-more-but-earn-apf-3318981277.html?x=0 excerpt: As banks pour money into U.S. Treasurys, it forces down interest rates and yields for people with money in government debt or bank deposits. On Friday, the three-month Treasury bill offered a return of 0.02 percent -- after falling as low as 0.005 percent Thursday. That's the lowest level since a year ago, in the throes of the financial crisis. Lower interest rates make it cheaper for people and companies to borrow, and they help sustain a weak economy. They also help keep mortgage rates low, which is key to turning the housing market around. And lower rates make it much cheaper for the government to borrow money to finance deficits. But the government's policy of stimulating the economy by cutting rates to try to get people to borrow and spend is essentially robbing the elderly of a vital income stream, argued Greg McBride, senior financial analyst at Bankrate.com. It takes money out of the pockets of senior citizens and anyone living on a fixed income and gives it to borrowers, many of whom are overly indebted, McBride said. It's as if Grandma stuffed an envelope full of cash, walked down the street and gave it to the guy with two new cars, a big-screen TV and who's behind on his mortgage. For some perspective on the rapid drop in CD interest rates, just look back a year. The interest rate for a one-year CD was 2.53 percent this time last year. Today, it earns just 0.88 percent. That means a retiree with $100,000 saved in a CD could have earned $2,530 in 2008, or about $211 a month. At current rates, that same $100,000 is earning just $880 year. The retiree's monthly income has sunk to about $73. Besides savers, low rates hurt investors in fixed-income assets like U.S. Treasurys. Demand for Treasury bonds has soared even as the government auctions off record amounts of new debt to finance record budget deficits. Interest rates aren't expected to rise anytime soon. The Federal Reserve seems determined to keep rates low as long as unemployment remains up and consumer spending is weak. Comments made by top Fed officials in recent days, including Federal Reserve Chairman Ben Bernanke, have convinced investors that any increase in rates is months away at the earliest. The Fed is not going to be tightening monetary policy for a long time, said Mark Zandi, chief economist at Moody's Economy.com. ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
Re: [Marxism-Thaxis] The SWP and underconsumptionism
Those Marxists like Michal Kalecki or Paul Sweezy (under the influence of Keynes) who embraced the underconsumptionist thesis did not hold that capitalist states would automatically adopt looser fiscal and monetary policies in order to stop or even to prevent economic downturns. On the contrary, they held that capital would be quite resistant to the general adoption of such policies because they would undermine the political power and the social status of capital. Kalecki, for instance, argued that under normal circumstances, capital would be resistant to the adoption of Keynesian-style full-employment policies, even if it was manifestly clear that such policies would boost business profits. That's because, according to Kalecki, such policies would less the social status of businessmen and weaken their political power. Capitalists, in Kalecki's opinion, feared the loss of social status and political power even more than they feared the loss of profits. Hence, their tendency to form political alliances with rentiers (whose incomes would be directly threatened by such policies) in order to oppose full-employment policies. See his famous 1943 paper, Political Aspects of Full Employment can be found online here. http://tinyurl.com/ykxusra Paul Sweezy echoed Kalecki's arguments in his early book, The Theory of Capitalist Development. Later on, both Kalecki and Sweezy pointed out how, what may be called, military Keyensianism provided a way to make Keynesianism work in a way that would be acceptable to capitalists. That of course is not to say that the underconsumptionists were necessarily correct, but rather to point out that Marxist underconsumptionists do not accept the thesis, that even if Keynesian economic analysis is basically correct, that we can ever expect capitalist states to use the tools of fiscal and monetary policy to balance out the business cycle. In their view, the class interersts of capital militate against this happening over the long term. Having said that it must be admitted that the Keynesian influence on Sweezy has always been a bone of contention for other Marxists. Back in the late 1960s, Paul Mattick wrote a critique of Keynesianism, in which Sweezy, was at least by implication, one of his targets. Marc Linder et al. in their book Anti-Samuelson, while primarily (as the title suggests) targeting Paul Samuelson's brand of Keynesianism, also took time out to critique Sweezy precisely for his Keynesianism. And more recently, James Heartfield has simiarly criticized Sweezy Jim Farmelant -- Original Message -- From: Paddy Hackett rashe...@eircom.net To: marxism-thaxis@lists.econ.utah.edu Subject: [Marxism-Thaxis] The SWP and underconsumptionism Date: Wed, 18 Nov 2009 09:50:38 - Myth 2: But the government has to borrow over ?20 billion and so cutbacks are necessary. If we don't take the 'hard medicine' now, it will be worse later. The huge government deficit is a symptom but not the cause of the crisis. Before 2007, for example, there was no deficit as government revenue was ?65.1 billion and spending was ?64.6. The economic crash has wiped out many tax revenues. VAT rates have fallen; PAYE taxes are down, property taxes tumbled and more is being spent on social welfare payments. But the cutbacks have made matters worse. You can see this easily through simple figures.In October 2008, the government claimed that the budget deficit would rise to 6.5 percent of GDP and that cutbacks were needed. But in January 2009, the budget deficit had risen to 9.5 percent - and so more cuts were demanded in an April budget.Yet, after all these rounds of cutbacks, the budget deficit has now risen to 13 percent. In other words, all the sacrifices have been wasted because the debt is even higher. The reason why this occurs is simple. If personal consumption is already depressed through unemployment and wage cuts, reductions in government spending only add to the slow down in the economy. There is even less money to go around and a spiral of economic depression sets in. So instead of digging a deeper hole, we need to embark on a jobs programme that puts people back to work The above argument was recently written by Kieran Allen and published by the SWP. It is based on underconsumptionist assumptions. The underconsumptionist ideology suggests that economic downturns are caused by a lack of demand. This means that the solution to the problem are increases in demand and thereby consumption. This, it is believed, increases demand which in turn leads to increased commodity production. Increased production means an increase, generally speaking, in the creation of value and thereby economic growth. If this theory is correct it means that capitalism never need experience economic downturns. To prevent recessions all that is needed is continuous increases in demand (or consumption). If this theory is correct there is no need to abolish
Re: [Marxism-Thaxis] The SWP and underconsumptionism
On 11/18/09, -clip- And more recently, James Heartfield has simiarly criticized Sweezy Jim Farmelant ^^^ CB: James H. and I argued about this point of underconsumptionism here on Thaxis in about 1999 or so. ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
Re: [Marxism-Thaxis] The SWP and underconsumptionism
I should point out that many conservative economists would agree with the portion of Paddy's piece down below. Right-wing critics of Keynes (both in his day and our own) argued that attempts to deal with economic downturns through the loosening of fiscal and monetary policy would most likely result in inflation rather than in renewed economic growth. Such were the arguments of critics like Friedrich Hayek, Ludwig von Mises. They, of course, did not use that to argue for the abolition of capitalism. Jim Farmelant -- Original Message -- From: Paddy Hackett rashe...@eircom.net To: marxism-thaxis@lists.econ.utah.edu Subject: [Marxism-Thaxis] The SWP and underconsumptionism Date: Wed, 18 Nov 2009 09:50:38 - In an economic crash when profitability has falling artificially increasing demand cannot solve the problem. Printing more paper money as a means of increasing consumer demand abjectly under downturn economics. The result is merely inflation. The more paper that is injected into the economy the more inflation rises. Rising inflation means that real demand has not increased. On the other hand if the government can freely borrow money as a means of making up for the budget deficit then the upshot is that crashes are superfluous. If this argument is correct then the conclusion is that not excessive credit, but the lack of it, is the cause of the current crash in Ireland. Borrowing, credit, is now the panacea for all economic ills. This being so capital need no longer be concerned over both rising wages and costs. Class struggle is thereby rendered unnecessary and the objective conditions necessary for communism cease to exist. Instant Health Insurance Get fast, free health insurance quotes online now in 2 minutes. http://thirdpartyoffers.juno.com/TGL2141/c?cp=tEDlXYC68EpV7ZvH4kxnywAAJ1AP8ttsZd_TbiVxkZxsC3mBAAQFAAjMHj4AAANSABI4JwA= ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
Re: [Marxism-Thaxis] The SWP and underconsumptionism
Obama, the Fed and the Treasury are underconsumptionist as is, to a degree, Western Europe. The massive injection of billions of dollars into the economy is an expression of underconsumptionist ideology. But this merely helps postpone the judgment day. The capitalist needs an unprecedentedly deep slump. By these unprecedented injections the slump has been postponed. But the problem has not been solved. Washington has created another bubble type phenomenon. The problem is that there may not be enough gas to blow up to the previous dimensions --a floppy bubble. This is something I am not qualified to answer. Washington has simply done what the Fed was doing under its last boss. Propping up the system artificially by providing more apparent spend. Those Marxists like Michal Kalecki or Paul Sweezy (under the influence of Keynes) who embraced the underconsumptionist thesis did not hold that capitalist states would automatically adopt looser fiscal and monetary policies in order to stop or even to prevent economic downturns. On the contrary, they held that capital would be quite resistant to the general adoption of such policies because they would undermine the political power and the social status of capital. Kalecki, for instance, argued that under normal circumstances, capital would be resistant to the adoption of Keynesian-style full-employment policies, even if it was manifestly clear that such policies would boost business profits. That's because, according to Kalecki, such policies would less the social status of businessmen and weaken their political power. Capitalists, in Kalecki's opinion, feared the loss of social status and political power even more than they feared the loss of profits. Hence, their tendency to form political alliances with rentiers (whose incomes would be directly threatened by such policies) in order to oppose full-employment policies. See his famous 1943 paper, Political Aspects of Full Employment can be found online here. http://tinyurl.com/ykxusra Paul Sweezy echoed Kalecki's arguments in his early book, The Theory of Capitalist Development. Later on, both Kalecki and Sweezy pointed out how, what may be called, military Keyensianism provided a way to make Keynesianism work in a way that would be acceptable to capitalists. That of course is not to say that the underconsumptionists were necessarily correct, but rather to point out that Marxist underconsumptionists do not accept the thesis, that even if Keynesian economic analysis is basically correct, that we can ever expect capitalist states to use the tools of fiscal and monetary policy to balance out the business cycle. In their view, the class interersts of capital militate against this happening over the long term. Having said that it must be admitted that the Keynesian influence on Sweezy has always been a bone of contention for other Marxists. Back in the late 1960s, Paul Mattick wrote a critique of Keynesianism, in which Sweezy, was at least by implication, one of his targets. Marc Linder et al. in their book Anti-Samuelson, while primarily (as the title suggests) targeting Paul Samuelson's brand of Keynesianism, also took time out to critique Sweezy precisely for his Keynesianism. And more recently, James Heartfield has simiarly criticized Sweezy Jim Farmelant -- Original Message -- From: Paddy Hackett rashe...@eircom.net To: marxism-thaxis@lists.econ.utah.edu Subject: [Marxism-Thaxis] The SWP and underconsumptionism Date: Wed, 18 Nov 2009 09:50:38 - Myth 2: But the government has to borrow over ?20 billion and so cutbacks are necessary. If we don't take the 'hard medicine' now, it will be worse later. The huge government deficit is a symptom but not the cause of the crisis. Before 2007, for example, there was no deficit as government revenue was ?65.1 billion and spending was ?64.6. The economic crash has wiped out many tax revenues. VAT rates have fallen; PAYE taxes are down, property taxes tumbled and more is being spent on social welfare payments. But the cutbacks have made matters worse. You can see this easily through simple figures.In October 2008, the government claimed that the budget deficit would rise to 6.5 percent of GDP and that cutbacks were needed. But in January 2009, the budget deficit had risen to 9.5 percent - and so more cuts were demanded in an April budget.Yet, after all these rounds of cutbacks, the budget deficit has now risen to 13 percent. In other words, all the sacrifices have been wasted because the debt is even higher. The reason why this occurs is simple. If personal consumption is already depressed through unemployment and wage cuts, reductions in government spending only add to the slow down in the economy. There is even less money to go around and a spiral of economic depression sets in. So instead of digging a deeper hole, we need to embark on a jobs programme that puts people back to work The above argument
Re: [Marxism-Thaxis] The SWP and underconsumptionism
Yes, however they are not _Marxist_ underconsumptionists (smile) Also, they gave a lot more to Wall Street, which is supply-side. On 11/18/09, Paddy Hackett rashe...@eircom.net wrote: Obama, the Fed and the Treasury are underconsumptionist as is, to a degree, Western Europe. The massive injection of billions of dollars into the economy is an expression of underconsumptionist ideology. But this merely helps postpone the judgment day. The capitalist needs an unprecedentedly deep slump. By these unprecedented injections the slump has been postponed. But the problem has not been solved. Washington has created another bubble type phenomenon. The problem is that there may not be enough gas to blow up to the previous dimensions --a floppy bubble. This is something I am not qualified to answer. Washington has simply done what the Fed was doing under its last boss. Propping up the system artificially by providing more apparent spend. Those Marxists like Michal Kalecki or Paul Sweezy (under the influence of Keynes) who embraced the underconsumptionist thesis did not hold that capitalist states would automatically adopt looser fiscal and monetary policies in order to stop or even to prevent economic downturns. On the contrary, they held that capital would be quite resistant to the general adoption of such policies because they would undermine the political power and the social status of capital. Kalecki, for instance, argued that under normal circumstances, capital would be resistant to the adoption of Keynesian-style full-employment policies, even if it was manifestly clear that such policies would boost business profits. That's because, according to Kalecki, such policies would less the social status of businessmen and weaken their political power. Capitalists, in Kalecki's opinion, feared the loss of social status and political power even more than they feared the loss of profits. Hence, their tendency to form political alliances with rentiers (whose incomes would be directly threatened by such policies) in order to oppose full-employment policies. See his famous 1943 paper, Political Aspects of Full Employment can be found online here. http://tinyurl.com/ykxusra Paul Sweezy echoed Kalecki's arguments in his early book, The Theory of Capitalist Development. Later on, both Kalecki and Sweezy pointed out how, what may be called, military Keyensianism provided a way to make Keynesianism work in a way that would be acceptable to capitalists. That of course is not to say that the underconsumptionists were necessarily correct, but rather to point out that Marxist underconsumptionists do not accept the thesis, that even if Keynesian economic analysis is basically correct, that we can ever expect capitalist states to use the tools of fiscal and monetary policy to balance out the business cycle. In their view, the class interersts of capital militate against this happening over the long term. Having said that it must be admitted that the Keynesian influence on Sweezy has always been a bone of contention for other Marxists. Back in the late 1960s, Paul Mattick wrote a critique of Keynesianism, in which Sweezy, was at least by implication, one of his targets. Marc Linder et al. in their book Anti-Samuelson, while primarily (as the title suggests) targeting Paul Samuelson's brand of Keynesianism, also took time out to critique Sweezy precisely for his Keynesianism. And more recently, James Heartfield has simiarly criticized Sweezy Jim Farmelant -- Original Message -- From: Paddy Hackett rashe...@eircom.net To: marxism-thaxis@lists.econ.utah.edu Subject: [Marxism-Thaxis] The SWP and underconsumptionism Date: Wed, 18 Nov 2009 09:50:38 - Myth 2: But the government has to borrow over ?20 billion and so cutbacks are necessary. If we don't take the 'hard medicine' now, it will be worse later. The huge government deficit is a symptom but not the cause of the crisis. Before 2007, for example, there was no deficit as government revenue was ?65.1 billion and spending was ?64.6. The economic crash has wiped out many tax revenues. VAT rates have fallen; PAYE taxes are down, property taxes tumbled and more is being spent on social welfare payments. But the cutbacks have made matters worse. You can see this easily through simple figures.In October 2008, the government claimed that the budget deficit would rise to 6.5 percent of GDP and that cutbacks were needed. But in January 2009, the budget deficit had risen to 9.5 percent - and so more cuts were demanded in an April budget.Yet, after all these rounds of cutbacks, the budget deficit has now risen to 13 percent. In other words, all the sacrifices have been wasted because the debt is even higher. The reason why this occurs is simple. If personal consumption is already depressed through unemployment and wage cuts, reductions
Re: [Marxism-Thaxis] The SWP and underconsumptionism
Charles is right about that. Obama's policies more closely resemble those followed by Herbert Hoover rather than those followed by FDR. An unabashed Keynesian would criticize Obama for not directing enough of his spending to lower income people, who, according to Keynes, would have a higher propensity to consumption than more affluent people. All this would seem consistent with Kalecki's political economic analysis, according to which we would expect government spending to follow this course it has been, so far, under the Obama Administration. Presumably, things are not likely to change much unless the Federal government begins to feel the heat of working class insurgency as was the case in the US by the time that FDR became president. Jim F. -- Original Message -- Yes, however they are not _Marxist_ underconsumptionists (smile) Also, they gave a lot more to Wall Street, which is supply-side. On 11/18/09, Paddy Hackett rashe...@eircom.net wrote: Obama, the Fed and the Treasury are underconsumptionist as is, to a degree, Western Europe. The massive injection of billions of dollars into the economy is an expression of underconsumptionist ideology. But this merely helps postpone the judgment day. The capitalist needs an unprecedentedly deep slump. By these unprecedented injections the slump has been postponed. But the problem has not been solved. Washington has created another bubble type phenomenon. The problem is that there may not be enough gas to blow up to the previous dimensions --a floppy bubble. This is something I am not qualified to answer. Washington has simply done what the Fed was doing under its last boss. Propping up the system artificially by providing more apparent spend. Those Marxists like Michal Kalecki or Paul Sweezy (under the influence of Keynes) who embraced the underconsumptionist thesis did not hold that capitalist states would automatically adopt looser fiscal and monetary policies in order to stop or even to prevent economic downturns. On the contrary, they held that capital would be quite resistant to the general adoption of such policies because they would undermine the political power and the social status of capital. Kalecki, for instance, argued that under normal circumstances, capital would be resistant to the adoption of Keynesian-style full-employment policies, even if it was manifestly clear that such policies would boost business profits. That's because, according to Kalecki, such policies would less the social status of businessmen and weaken their political power. Capitalists, in Kalecki's opinion, feared the loss of social status and political power even more than they feared the loss of profits. Hence, their tendency to form political alliances with rentiers (whose incomes would be directly threatened by such policies) in order to oppose full-employment policies. See his famous 1943 paper, Political Aspects of Full Employment can be found online here. http://tinyurl.com/ykxusra Paul Sweezy echoed Kalecki's arguments in his early book, The Theory of Capitalist Development. Later on, both Kalecki and Sweezy pointed out how, what may be called, military Keyensianism provided a way to make Keynesianism work in a way that would be acceptable to capitalists. That of course is not to say that the underconsumptionists were necessarily correct, but rather to point out that Marxist underconsumptionists do not accept the thesis, that even if Keynesian economic analysis is basically correct, that we can ever expect capitalist states to use the tools of fiscal and monetary policy to balance out the business cycle. In their view, the class interersts of capital militate against this happening over the long term. Having said that it must be admitted that the Keynesian influence on Sweezy has always been a bone of contention for other Marxists. Back in the late 1960s, Paul Mattick wrote a critique of Keynesianism, in which Sweezy, was at least by implication, one of his targets. Marc Linder et al. in their book Anti-Samuelson, while primarily (as the title suggests) targeting Paul Samuelson's brand of Keynesianism, also took time out to critique Sweezy precisely for his Keynesianism. And more recently, James Heartfield has simiarly criticized Sweezy Jim Farmelant -- Original Message -- From: Paddy Hackett rashe...@eircom.net To: marxism-thaxis@lists.econ.utah.edu Subject: [Marxism-Thaxis] The SWP and underconsumptionism Date: Wed, 18 Nov 2009 09:50:38 - Myth 2: But the government has to borrow over ?20 billion and so cutbacks are necessary. If we don't take the 'hard medicine' now, it will be worse later. The huge government deficit is a symptom but not the cause of the crisis. Before 2007, for example, there was no deficit as government revenue was ?65.1 billion and spending was ?64.6. The economic crash has
Re: [Marxism-Thaxis] The SWP and underconsumptionism
On 11/18/09, farmela...@juno.com farmela...@juno.com wrote: Charles is right about that. Obama's policies more closely resemble those followed by Herbert Hoover rather than those followed by FDR. ^ CB: True, although I don't think Hoover bailed out Wall Street. He tightened monetarily or something. ^ An unabashed Keynesian would criticize Obama for not directing enough of his spending to lower income people, who, according to Keynes, would have a higher propensity to consumption than more affluent people. All this would seem consistent with Kalecki's political economic analysis, according to which we would expect government spending to follow this course it has been, so far, under the Obama Administration. Presumably, things are not likely to change much unless the Federal government begins to feel the heat of working class insurgency as was the case in the US by the time that FDR became president. Jim F. -- Original Message -- Yes, however they are not _Marxist_ underconsumptionists (smile) Also, they gave a lot more to Wall Street, which is supply-side. On 11/18/09, Paddy Hackett rashe...@eircom.net wrote: Obama, the Fed and the Treasury are underconsumptionist as is, to a degree, Western Europe. The massive injection of billions of dollars into the economy is an expression of underconsumptionist ideology. But this merely helps postpone the judgment day. The capitalist needs an unprecedentedly deep slump. By these unprecedented injections the slump has been postponed. But the problem has not been solved. Washington has created another bubble type phenomenon. The problem is that there may not be enough gas to blow up to the previous dimensions --a floppy bubble. This is something I am not qualified to answer. Washington has simply done what the Fed was doing under its last boss. Propping up the system artificially by providing more apparent spend. Those Marxists like Michal Kalecki or Paul Sweezy (under the influence of Keynes) who embraced the underconsumptionist thesis did not hold that capitalist states would automatically adopt looser fiscal and monetary policies in order to stop or even to prevent economic downturns. On the contrary, they held that capital would be quite resistant to the general adoption of such policies because they would undermine the political power and the social status of capital. Kalecki, for instance, argued that under normal circumstances, capital would be resistant to the adoption of Keynesian-style full-employment policies, even if it was manifestly clear that such policies would boost business profits. That's because, according to Kalecki, such policies would less the social status of businessmen and weaken their political power. Capitalists, in Kalecki's opinion, feared the loss of social status and political power even more than they feared the loss of profits. Hence, their tendency to form political alliances with rentiers (whose incomes would be directly threatened by such policies) in order to oppose full-employment policies. See his famous 1943 paper, Political Aspects of Full Employment can be found online here. http://tinyurl.com/ykxusra Paul Sweezy echoed Kalecki's arguments in his early book, The Theory of Capitalist Development. Later on, both Kalecki and Sweezy pointed out how, what may be called, military Keyensianism provided a way to make Keynesianism work in a way that would be acceptable to capitalists. That of course is not to say that the underconsumptionists were necessarily correct, but rather to point out that Marxist underconsumptionists do not accept the thesis, that even if Keynesian economic analysis is basically correct, that we can ever expect capitalist states to use the tools of fiscal and monetary policy to balance out the business cycle. In their view, the class interersts of capital militate against this happening over the long term. Having said that it must be admitted that the Keynesian influence on Sweezy has always been a bone of contention for other Marxists. Back in the late 1960s, Paul Mattick wrote a critique of Keynesianism, in which Sweezy, was at least by implication, one of his targets. Marc Linder et al. in their book Anti-Samuelson, while primarily (as the title suggests) targeting Paul Samuelson's brand of Keynesianism, also took time out to critique Sweezy precisely for his Keynesianism. And more recently, James Heartfield has simiarly criticized Sweezy Jim Farmelant -- Original Message -- From: Paddy Hackett rashe...@eircom.net To: marxism-thaxis@lists.econ.utah.edu Subject: [Marxism-Thaxis] The SWP and underconsumptionism Date: Wed, 18 Nov 2009 09:50:38 - Myth 2: But the government has to borrow over ?20
