Re: [PEN-L] No recession
In fact, where has there been a recession anywhere in the world lately ? Is the business cycle obsolete ? Charles
Re: [PEN-L] No recession
Greetings Economists, On Nov 18, 2007, at 6:25 AM, Charles Brown wrote: In fact, where has there been a recession anywhere in the world lately ? Is the business cycle obsolete ? Doyle, Iraq. Like you wrote before there are spots. The question before us is systemic recession. As Roubini points out, the likelihood of a U.S. recession is near certain now, the debate is about depth. I want to go back a way to 1973. That recession formed the political background to my adult life. The left motion I knew resisted what happened into the early eighties. And then resistance faded away. I think the fade away has to do with the general decline of catastrophism that guided people from 1917 onward. The rootedness in struggle that taught people how to organize, I mean how tens of millions schooled in war thought about organization couldn't work in 1973 to about 1984. Suppose we have a significant deep recession now? More so than 1973? Where all the wealth accumulated in the safety net has been spent for profits? Where people don't trust each other enough to unite in the face of survival against loss? We will not turn to what war teaches working people. A generalized war would be a high tech war in which cities would be military targets. How then could people unite? Does a severe recession teach us lessons we can use that lack a generalized war to teach struggle to people on a mass scale? Surely hungry desperate people die. Homeless people suffer. But they face an enormous state. Walled cities with gates are everywhere. Gangsters control the streets where police don't go. That sounds like China in the 1920s to me, but the same sorts of institutions are paramount now in the U.S. long before Roubini's catastrophe strikes. Argentina teaches us that the neo- liberals collapse politically like a house of cards, but our ability to unite into powerful groups to seize power is lacking. No Lenin emerged in Argentina, nor Turkey. We watch Islam provide social programs in Lebanon and their ability to fight off the modern war machine of Israel. That warfare teaches them how to cope with catastrophe, but a collapse in the U.S. has no war machine to correct the failure. The war machine can't correct Iraq. The schooling of war that Lebanon provides does nothing much to unite us against a collapse. What then? If one goes back further, to Paris up to the revolution, they had no great war to school them. No Lenin, and they faced a state on a scale in that time equal to Britain. Truly they lack scientific knowledge that came after the French Revolution, but that state was a police state that had no trouble with massacre to control things. The mob, chaotic disordered groups grew. Then order came from the civil structures, and the mob merged into the nation state. So it is now, the police state Bush created can massacre quite a few people, but collapse economically strips neo-liberals of power without a shot being fired. So the schooling of crisis, and struggle is not about firing weapons, but like France chaos pushing masses into groups, and groups flailing toward social organization. And existing social international structures merging with the mob into global institutions that the neo-liberals lost control of. Argentina on the big scale as it were. A place where crisis certainly rules but the schooling of war cannot cope with the mob like disorder and chaos. The states as it were are the civil structures to which we turn, but in uniting across states, since the U.S. cannot provide global power. Then the mob seizes that international nascent global system. Surely the U.S. can't stop that, because the collapse of neo- liberalism in the heartland leaves the U.S. with no alternative. Global crisis begats global solutions. thanks, Doyle Saylor
Re: [PEN-L] No recession
If losses, or anxiety about losses, prevents lenders from lending in any quantity the economy will go down the tubes. It's not so much the past losses but how the affect future behavior that matter for the real world. Doug
Re: [PEN-L] No recession
Greetings Economists, On Nov 16, 2007, at 7:49 AM, Charles Brown wrote: There is very little variable capital or even fixed real capital destroyed. It's mostly destruction of fictitious capital, Monopoly game money, play money. Doyle; The scale of the losses, 2 trillion or so according to Goldman Sachs or about %7 in their way of calculating non-financial sector debt (see LP's recent note). Your point I think relates to a concept of how does money get spent. Is it socially useful or is the money pointed at fools gold profits (high risk returns)? I don't think this is entirely fictitious in the sense that development in the g20 is based upon these money flows. The pain from outsourcing is very real. the displacement pain from peasants forced off the land into the cities is very significant. If real estate collapses in value the creative destruction you talk about is social rot. People 'buying' homes that are then taken away because the huge profits dream is based upon extracting gold from their empty pockets. Of course that is my experiences in life speaking. Perhaps Jim Devine can elucidate? Thanks, Doyle Saylor
Re: [PEN-L] No recession
On Nov 16, 2007 11:21 AM, Doyle Saylor [EMAIL PROTECTED] wrote: Doyle; Maddening isn't it? Being from the catastrophist camp watching them spot recession and get away with it has been difficult to endure. The defeat of that sense of crisis impending has been hard. I was reading in the Grundrisse recently about how Marx gave up after 1848 slowly, but recognized pipe dreams before a lot of the left did. And for a long long time expected nothing to happen in his lifetime. I think your point then is well taken. We need practical sound thinking not pipe dreams. Then when one says well it won't be anymore difficult this time than before, and see if that turns out to be true is realistic. Which after all is why Marxist are supposed to be realists. thanks, Doyle Saylor Hey that's because you are from the reality-based community. In the action-based community you create your own reality. -raghu.
Re: [PEN-L] No recession
Doyle; The scale of the losses, 2 trillion or so according to Goldman Sachs or about %7 in their way of calculating non-financial sector debt (see LP's recent note). Your point I think relates to a concept of how does money get spent. Is it socially useful or is the money pointed at fools gold profits (high risk returns)? I don't think this is entirely fictitious in the sense that development in the g20 is based upon these money flows. The pain from outsourcing is very real. the displacement pain from peasants forced off the land into the cities is very significant. If real estate collapses in value the creative destruction you talk about is social rot. People 'buying' homes that are then taken away because the huge profits dream is based upon extracting gold from their empty pockets. Of course that is my experiences in life speaking. Perhaps Jim Devine can elucidate? Thanks, Doyle Saylor ^^^ CB: Yes, the mortgage foreclosure crisis for the working class and middle income strata is in the form of evictions and loss of homes. The news doesn't seem so interested in that as it is in the loss of finance capital profits. Anyway, the old sense of recession was a system wide economic hurt. Now in the US in the last twenty years or so, they seem to be able to put recession style hurt on the working class ( evictions, income loss) while avoiding the same level of hit on profits as in the old recessions , no ? Maybe Jim Devine can correct me if I'm wrong. The new recessions are spot recessions, like putting single states like Michigan in recession, but not the economy of the US as a whole. Somehow the US has avoided significant GDP slump. The business cycle, in the traditional sense, seems to be blunted for the US. economy
Re: [PEN-L] No recession
Greetings Economists, On Nov 16, 2007, at 12:45 PM, raghu wrote: Hey that's because you are from the reality-based community. In the action-based community you create your own reality. Doyle, The familiar echoes of long ago left arguments about idealism versus practice. Well the catastrophe that I learned was an echo of the WWI that shaped the experience of millions in the trenches and especially Russia. I was born after WWII and no big catastrophe (world war or depression) has occurred since. That's the reality which negates my sense (I do feel in my guts as a worker that things are unstable and I am at the mercy of employers) of chaos on a mass scale that never happens in my real life. Like Charles, I interpreted events through a lens of war that made sense to those generations who really experienced them. A catastrophe still happens to spots. The spots can be rather large like Argentina, Thailand. The wars are pretty bad too, but they happen elsewhere outside of my world. Action then, making my own world, rests upon how to shape what is happening in this bubble between catastrophes of the WWI sort. I can't argue with some young person living concurrent with that this issue is life and death in the U.S. as if catastrophe is around the corner They don't live in Iraq. The building and organizing I saw during the sixties was made mainly by African Americans, in relation to support from the left and progressives. That was systemic in the sense of racism is systemic, but not in the sense of global unity felt by those who lived through WWI. I think action now is created by community knowledge production. War is moving toward robots fighting robots, and robots destroying communities to subdue rebellion. The sort of war that WWI represents of massed armies facing each other cannot happen, and the schooling of mass knowledge that produces such experiences in the minds of millions of soldiers is gone. When I look at Marx discussing Hegel, and the two sidedness of the economy, the surface and the processes below, I see how Marx is trying to produce knowledge given his tools of expression that are realistic. But I don't especially feel comfortable talking about the knowledge that arises from a partly metaphysical description of knowledge production. Is knowledge visual? Does making making a vast U.S. cultural industry shape how we build community? Then how do I use a movie to express the depths of the processes in the way Marx meant? What does knowledge production do to build organize and sustain community? Starting with current knowledge of the brain, the eyes project image information back into the brain to patches of the occipital lobe. These patches connect to other patches. These 'layers' of knowledge production areas in the brain are what we build community from. For example, it is thought now that seeing a face is a different patch and stream from seeing apples and oranges. The face is about community, and oranges or objects unrelated to holding hands with family is work processes like making cars. For Marx, this knowledge production might seem a far cry from idealist conceits. We do work to form community, and that work is of a specific type. We use language to connect. We use faces to produce language. And so on. So to me community is properly - using an email distribution list to create community, where properly means we can peacefully work together to build knowledge that leads to action against capitalism. Sharing Marx's view that equality of society, a general class of workers means equalizing all humans except to exclude those who do not act equally with the value of work. This work, or action, is knowledge production of community. And what does that mean, well? It means a realistic understanding of what knowledge is, how it is produced, and therefore making realistic action clear and salient. thanks, Doyle Saylor
Re: [PEN-L] No recession
On Nov 9, 2007, at 9:25 AM, Charles Brown wrote: I predict that the current financial crisis will not lead to a recession in the US economy. I have to say I'm surprised. Why? Doug
Re: [PEN-L] No recession
Doug wrote: On Nov 9, 2007, at 9:25 AM, Charles Brown wrote: I predict that the current financial crisis will not lead to a recession in the US economy. I have to say I'm surprised. Why? Because it was the (slowly developing) recession in the US economy that led to the current financial crisis? Shane
Re: [PEN-L] No recession
I predict that the current financial crisis will not lead to a recession in the US economy. I have to say I'm surprised. Why? Doug ^ CB: I'm following your approach to this question.
Re: [PEN-L] No recession
I have to say I'm surprised. Why? Doug ^ CB: I'm following your approach to this question. I have no idea where things will end up, but any article that quotes a Goldman-Sachs muck-a-muck like this does tend to concentrate one's mind: “We are experiencing among our clients an awakening that the United States is in big trouble.” NY Times, November 8, 2007 Markets and Dollar Sink as Slowdown Worry Increases By MICHAEL M. GRYNBAUM and PETER S. GOODMAN Stock markets plummeted and the dollar sank to a record low against the euro yesterday as investors worldwide grew skittish over rising oil prices and the prospect of a substantial economic slowdown in the United States. The Dow Jones industrial average fell 360 points and the broader stock market dropped nearly 3 percent, driven down by fear that the troubles in housing are likely to continue well into next year, contributing to further losses in credit markets and spreading pain to the rest of the economy. After a relatively strong summer, consumer spending is expected to tighten and business profits slow in the months ahead, analysts said. “We are experiencing among our clients an awakening that the United States is in big trouble,” said Erik Nielsen, chief Europe economist at Goldman Sachs. The rise in oil prices, which briefly traded yesterday above $98 a barrel before settling at $96.37, now appear to be pushing up the cost of gasoline, heating oil and jet fuel as well. That only intensified concern that American consumers may no longer be able to sustain their spending on other goods and services, particularly the large numbers of gas-guzzling vehicles still being turned out by the Detroit automakers. The most immediate trigger for the sell-off in the dollar, traders said, was a jarring signal that suggested China might shift some of its enormous hoard of foreign currency reserves — worth more than $1.4 trillion, primarily in dollars and dollar-denominated assets — into other currencies to get a better return on its money. “We will favor stronger currencies over weaker ones, and will readjust accordingly,” Cheng Siwei, vice chairman of the Standing Committee of the National People’s Congress told a conference in Beijing on Wednesday. A Chinese central bank vice director, Xu Jian, said the dollar was “losing its status as the world currency,” according to Bloomberg News. Mr. Cheng later told reporters he was not saying China would buy more euros and dump dollars. But as markets opened across Europe, those words echoed as an invitation to sell the American currency. The dollar fell to its lowest level against the Canadian dollar since 1950, the British pound since 1981, and the Swiss franc since 1995. The euro rose to a new record, $1.4729, before retreating. While the reaction to the Chinese statements appeared to have been overblown, analysts said the larger forces assailing the dollar and the stock market were more deep-seated: uncertainty about the magnitude of the mortgage-related credit crisis, and the growing sense that, sooner or later, the unraveling of the American housing market must color the larger economy. Recent weeks have featured a string of unpleasant reckonings for major Wall Street banks, with several slashing billions of dollars from balance sheets to account for losses in the mortgage market. Yet investors fret that there is more pain to come, with no way to know how much or where, given the spider’s web of financial deals that propelled the housing boom. “What it all comes down to beneath the surface is the perception of credit-related problems, and the perception that this is spreading in ways that cannot be anticipated,” said Alan Ruskin, chief international strategist at RBS Greenwich Capital. Though the losses from the subprime mortgage crisis are frequently estimated at $200 billion, only about half of this money has been accounted for, Mr. Ruskin said, with the markets forced to guess where the next batch of bad holdings will emerge. “A lot of people do the math and there still seems to be a big hole there,” he said. Amid the carnage, though, there were still several signs that the economy remains healthy. Productivity — a measure of how much the country produces for each worker — expanded more than expected in the summer, the Labor Department said, suggesting that the economy still has the ability to grow without stoking too much inflation. But stocks dropped from the opening bell. The Dow closed down 2.64 percent, at 13,300.02. The Standard Poor’s 500-stock index tumbled 44.65 points, or 2.9 percent, to 1,475.62. The Nasdaq composite index fell 76.42 points, or 2.7 percent, to 2,748.76. The market was also reacting to news from General Motors that it would write down $38.6 billion in future tax benefits after a string of poor sales in North America and Germany, logging its biggest quarterly loss ever. The company’s stock
Re: [PEN-L] No recession
I am not necessarily in disagreement with your assessment. I assume it is an assessment and not just a prediction, since you are not claiming to be either the late Jeane Dixon or Nostradamus. I assume you did not send your prophecy -- if that is what it was -- to the Weekly World News, which specializes in such political insights. Wbat is the analysis that brings you to this conclusion, in contrast to the crash-mongering of Mike Whitney et al (the fact that they crash-monger does not mean that a crash is not happening, since even a stopped clock is right twice a day. I firmly believe a crash is coming. I do not believe in eternal stagnation a la Monthly Review. But I have learned from experience that this bias (however well-founded) cannot govern my response to conjunctures. . However, I think it may be true that the gimmicks that have kept US capitalism on top -- invariably responded to with disaster-mongering by the Whitney et al -- may be running out of gas: the government deficit, the trade deficit, the weak dollar, the debtor status of US capitalism, the debt bubble and all the other bubhles which have kept the US economy at the top of the capitalist food chain internationally, outsourcing, moving US companies as a whole to semicolonial countries which must sign free trade pacts in exchange, may be losing steam/ At bottom, in my view, because of the the underlying decline in the value of products due to the increased productivity of labor -- the historical tendency of the rate of profit to decline (this is called deflation, but is not simply the opposite of inflation, which can coexist with it -- the two phenomena have different causes and characteristics). Maybe this is beginning to assert itself more fiercely in defiance of the gimmicks which have served so well in the past. While (as a person who no longer feels able to say, I predict with the old savoir faire), I acknowledge that leftists (including myself) have underestimated the profffpfimd strength of imperialism, above all US imperialism. But what is the concrete and factual analysis that leads Charles to his conclusion, which I think could be true, but cannot derive from the facts available to me at the momenr. Fred Feldman -Original Message- From: PEN-L list [mailto:[EMAIL PROTECTED] On Behalf Of Charles Brown Sent: Friday, November 09, 2007 9:25 AM To: PEN-L@SUS.CSUCHICO.EDU Subject: [PEN-L] No recession I predict that the current financial crisis will not lead to a recession in the US economy. Charles
Re: [PEN-L] No recession
Fred Feldman wrote: I am not necessarily in disagreement with your assessment. I assume it is an assessment and not just a prediction, since you are not claiming to be either the late Jeane Dixon or Nostradamus. I assume you did not send your prophecy -- if that is what it was -- to the Weekly World News, which specializes in such political insights. the WWN, alas, is also late. -- Jim Devine / Segui il tuo corso, e lascia dir le genti. (Go your own way and let people talk.) -- Karl, paraphrasing Dante.
Re: [PEN-L] No recession
Jim Devine wrote: Fred Feldman wrote: I am not necessarily in disagreement with your assessment. I assume it is an assessment and not just a prediction, since you are not claiming to be either the late Jeane Dixon or Nostradamus. I assume you did not send your prophecy -- if that is what it was -- to the Weekly World News, which specializes in such political insights. the WWN, alas, is also late. -- Jim Devine / Segui il tuo corso, e lascia dir le genti. (Go your own way and let people talk.) -- Karl, paraphrasing Dante. Of course, the supply of suckers inevitably ran out. The Empire of Debt From Adbusters #74, Nov-Dec 2007 http://adbusters.org/the_magazine/74/The_Empire_of_Debt.html Money for nothing. Own a home for no money down. Do not pay for your appliances until 2012. This is the new American Dream, and for the last few years, millions have been giddily living it. Dead is the old version, the one historian James Truslow Adams introduced to the world as “that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.” Such Puritan ideals – to work hard, to save for a better life – didn’t die from the natural causes of age and obsolescence. We killed them, willfully and purposefully, to create a new gilded age. As a society, we told ourselves we could all get rich, put our feet up on the decks of our new vacation homes, and let our money work for us. Earning is for the unenlightened. Equity is the new golden calf. Sadly, this is a hollow dream. Yes, luxury homes have been hitting new gargantuan heights. Ferrari sales have never been better. But much of the ever-expanding wealth is an illusory façade masking a teetering tower of debt – the greatest the world has seen. It will collapse, in a disaster of our own making. Distress is already rumbling through Wall Street. Subprime mortgages leapt into the public consciousness this summer, becoming the catchphrase for the season. Hedge fund masterminds who command salaries in the tens of millions for their supposed financial prescience, but have little oversight or governance, bet their investors’ multi-multi-billions on the ability that subprime borrowers – who by very definition have lower incomes and/or rotten credit histories – would miraculously find means to pay back loans far exceeding what they earn. They didn’t, and surging loan defaults are sending shockwaves through the markets. Yet despite the turmoil this collapse is wreaking, it’s just the first ripple to hit the shore. America’s debt crisis runs deep. How did it come to this? How did America, collectively and as individuals, become a nation addicted to debt, pushed to and over the edge of bankruptcy? The savings rate hangs below zero. Personal bankruptcies are reaching record heights. America’s total debt averages more than $160,000 for every man, woman, and child. On a broader scale, China holds nearly $1 trillion in US debt. Japan and other countries are also owed big. The story begins with labor... In full: http://adbusters.org/the_magazine/74/The_Empire_of_Debt.html Leigh If you *react* to criticism you'll end up doing everybody's 'thing' but your own --Me, paraphrasing Saul Alinsky
