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Resisting the globalisation of capital-
Discussion, debate and a
re-thinking of popular
alternatives
Friday January 26 2001, Zurich,
Volkshaus,
There was a article in the guardian (yesterday?) that said the reduction in
US interest rate by the fed was due to the possible breakdown in our banking
system? I didn't understand it all, but apparently the Bank of America is
in serious trouble and may go bankrupt? Any ideas on this?
-Nico
[Strange appositeness]
full article at
http://www.guardian.co.uk/business/story/0,3604,419237,00.html
Greenspan - a guru but not a god
Larry Elliott
Monday January 8, 2001
The ancient Greeks believed their world was ruled by gods and goddesses
living on the summit of Mount Olympus. There
DaimlerChrysler to shrink Chrysler group
Zetsche calls downsizing inevitable
Charles V. Tines / The Detroit News
Chrysler President Dieter Zetsche stands with the new Jeep Liberty at the 2001 North
American International Auto Show. "Short-term, Chrysler needs to be smaller," Zetsche
said.
When times gets tough, everybody becomes a Keynesian, apparently even
GW, who's now selling his tax cut as means of stimulating the economy
and averting recession (not the rationale he was using six months ago).
Except on issues of timing (eg Laura D'Andrea Tyson's comments) , no one
seems to
--
--
--
GM layoffs hit NE Ohio
Worries snowball as auto industry feels economy cooling off
BY FRANK WITSIL
Beacon Journal business writer
The snowball may have just started rolling.
General Motors
David Shemano wrote that in California,
The ability to build a power plant is heavily regulated. The ability to
set retail prices remains heavily regulated. The ability for power
providers to negotiate contracts to purchase powers from wholesalers is
heavily regulated. The very market
Barney wrote:
When times gets tough, everybody becomes a Keynesian, apparently even GW,
who's now selling his tax cut as means of stimulating the economy and
averting recession (not the rationale he was using six months ago). Except
on issues of timing (eg Laura D'Andrea Tyson's comments) , no
[EMAIL PROTECTED] 01/08/01 01:11PM
Charles Brown quoted:
DaimlerChrysler to shrink Chrysler group
Zetsche calls downsizing inevitable
So what's the point here? The 42% increase in real GDP since the
1991Q1 trough didn't happen, or wasn't worthy of note? Only
downsizing is economic news?
Charles Brown quoted:
DaimlerChrysler to shrink Chrysler group
Zetsche calls downsizing inevitable
So what's the point here? The 42% increase in real GDP since the
1991Q1 trough didn't happen, or wasn't worthy of note? Only
downsizing is economic news? Please enlighten.
Doug
Randy Wray, who has worked closely with Godley in the past, is advocating a cut
three times as great--$150 b. cut in the payroll tax and $150 b increase in the
earned income tax credit on top of W.'s $150. I'll let him know he better add
another $150 b.!
Jim, Max, Michael: good to see you in new
Barney Wagman wrote"
When times gets tough, everybody becomes a Keynesian, apparently even
GW, who's now selling his tax cut as means of stimulating the economy
If the rationale for Bush's tax cut were demand-side Keynesian, then
the plan would be vulnerable to the obvious critique that
Ellen wrote:
If the rationale for Bush's tax cut were demand-side Keynesian, then the
plan would be vulnerable to the obvious critique that virtually
all the benefits flow to the top 5%, who are more likely to save than to
spend. But Dubya, coached by Lawrence Lindsey, is selling his tax
Jim Devine wrote:
The fact that both of these are regressive doesn't automatically
make them anti- or un-Keynesian, since the US 1964 tax cut was also
regressive, as were the various investment tax credits that have
been promoted by self-styled Keynesians.
Why are ITCs un-Keynesian? JMK
Charles Brown wrote:
CB: Here's some enlightenment on this news from a writer in _Feed_.
The above is on the same "slowdown", and worthy of note.
Yup, the slowdown is worthy of note, as is what course it will take.
But I've also spent the last 9 years writing and talking about the
U.S.
Doug Henwood wrote:
Why are ITCs un-Keynesian? JMK himself was interested in stimulating
investment, and presumably raising the after-tax return of capital
expenditures should encourage investment. (Whether it actually does
or not is another issue.)
I've never quite understood this. What
[EMAIL PROTECTED] 01/08/01 03:32PM
Charles Brown wrote:
CB: Here's some enlightenment on this news from a writer in _Feed_.
The above is on the same "slowdown", and worthy of note.
Yup, the slowdown is worthy of note, as is what course it will take.
But I've also spent the last 9 years
At 03:21 PM 1/8/01 -0500, you wrote:
Jim Devine wrote:
The fact that both of these are regressive doesn't automatically make
them anti- or un-Keynesian, since the US 1964 tax cut was also
regressive, as were the various investment tax credits that have been
promoted by self-styled Keynesians.
Charles Brown wrote:
CB: So, have you concluded that the downturn side of the business
cycle has been lessened in the U.S. by some fundamental cause, or is
it just that the U.S. had unusual advantages compared to other
countrie in this period such as the only one standing after WWII ,
etc.
I've never quite understood this. What does the potential 'investor' do
with his money if he does _not_ invest it? Use if for wallpaper?
he or she can always spend it on consumption or hoard it. (Just a small bit
of hoarding can have a multiplied effect.) Or he or she can buy a
speculative
Jim Devine wrote:
As Doug notes, it's quite possible that Keynes himself liked sops
to the rich if they worked to help the economy.
Speaking of which, Ernest Mandel wrote somewhere - maybe in the
Dictionary of Marxist thought? - that "shrewd bourgeois" he was, JMK
liked a little inflation
Jim Devine wrote:
he or she can always spend it on consumption or hoard it. (Just a
small bit of hoarding can have a multiplied effect.) Or he or she
can buy a speculative asset at a high price, just to find that it's
not worth very much after the fact.
Yeah, but where's it go? And how does
In New Orleans some years ago, I spent a lot
of time walking around the French Quarter. One
of my stops was the "voodoo shop." It was full
of little graven images, assorted herbs and
vials of potions, etc. Now there are two or
three such shops, and they sell mass-production
type junk and have
Jim Devine wrote:
As Doug notes, it's quite possible that Keynes himself liked sops
to the rich if they worked to help the economy.
Speaking of which, Ernest Mandel wrote somewhere - maybe in the
Dictionary of Marxist thought? - that "shrewd bourgeois" he was, JMK
liked a little inflation
What was the ratio of expansionary to bust phase before the last
fifty years ? What is the ratio for most of the world, not just the
U.S. ? Perhaps the U.S. has figured out how to dump some of its bust
phase onto other countries, like Southeast Asia in 1998.
What is your point ? That U.S.
[EMAIL PROTECTED] writes:
Yeah, but where's it go? And how does an "investor" hoard money?
Aside from burying it in the backyard, it means buying a T-bill or
depositing it in a bank, which means that it either enters the stream
of consumption or gets lent by the bank to a business for working
Jim writes:
It seems to me that no matter what the rationale -- or rationalization --
of Bush2's proposed tax cut, it is Keynesian in practice (because
Keynesian
theory makes much more sense than supply-side theory does), just as
Reagan's tax cut was supply-side in theory but was Keynesian in
[EMAIL PROTECTED] 01/08/01 01:11PM
Charles Brown quoted:
DaimlerChrysler to shrink Chrysler group
Zetsche calls downsizing inevitable
So what's the point here? The 42% increase in real GDP since the
1991Q1 trough didn't happen, or wasn't worthy of note? Only
downsizing is economic news?
What Keynes says in _The General Theory_ is that workers will resist a cut in
real wages if it is done through a cut in nominal wages, whereas they will tend
not to resist if it happens through mild inflation. It is not due to "money
illusion" but rather due to the fact that workers care about
Ellen Frank wrote:
[EMAIL PROTECTED] writes:
Yeah, but where's it go? And how does an "investor" hoard money?
Aside from burying it in the backyard, it means buying a T-bill or
depositing it in a bank, which means that it either enters the stream
of consumption or gets lent by the bank to a
For Keynes, investment (meaning new plant and equipment, or somehow increased
productive capacity) does not happen just because there is a supply of "loanable
funds" or available credit, or past profits. Investment depends on expectations
of profitability which depends on expected future demand
Doug Henwood wrote:
Jim Devine wrote:
that "shrewd bourgeois" he was, JMK
liked a little inflation so it could disguise real wage cuts from the
workers. Where did Keynes say that?
I do remember Samuelson saying that in Newsweek back in the
late '70s. I remember part of it exactly:
quoth Max:
As it happened my hotel was next to the town's only land-based casino,
Harrah's. I wandered in purely by happenstance and accidently played
blackjack for an hour or so, contributing to the town's public sector in
the process (42% tax rate). I noted how
labor-intensive the
[was: Re: [PEN-L:6718] Re: Re: Re: Re: Re: Re: Implications of Surplus Tax
Cut?]
Doug says:
Speaking of which, Ernest Mandel wrote somewhere - maybe in the
Dictionary of Marxist thought? - that "shrewd bourgeois" he was, JMK
liked a little inflation so it could disguise real wage cuts from
I wrote:
It seems to me that no matter what the rationale -- or rationalization
-- of Bush2's proposed tax cut, it is Keynesian in practice (because
Keynesian theory makes much more sense than supply-side theory does),
just as Reagan's tax cut was supply-side in theory but was Keynesian
Later, around chs. 17, 19, Keynes emphasizes that wage flexibility would be
create tremendous instability. Keynes believed wages were wages were relatively
inflexible for institutional reasons, but this was not the cause of
unemployment--that's what confused alot of people who thought his
Jim Devine wrote:
I would expect a surplus-financed tax cut to raise interest rates.
why? cet. par., buying up government debt raises the price of government
bonds, notes, and bills, which _lowers_ interest rates. What a tax cut
might do is simply slow down the purchase of government debt
[EMAIL PROTECTED] writes:
B
ut it's not easy to keep money in a pure hoard. Buy a T-bill, and
the government may spend it. Buy a stock, and the grandma who sells
it might use it to buy her Paxil. Put it in the bank and it may
become working capital.
Doug
Point taken. The key word though,
I was being sort of facetious initially, but I do think there is an
issue here. The supply-siders argue that investment will be
high as long as government doesn't spook businesses with
too much interference in the free-market. Now I understand
the limitations of this and the critique of Say's
FYI. Please Circulate.
Anthony P. D'Costa
Associate Professor Ph: (253) 692-4462
Comparative International Development Fax: (253) 692-5718
University of
Was not the entire basis of the Clinton economic program, the entire basis
of his taking credit for the growth during his term, the fact that he
increased taxes in 1993, thereby reducing the budget deficit, thereby
causing a decline in interest rates, thereby causing economic and
employment
Ellen Frank wrote:
Point taken. The key word though, is "may." The grandma
may buy Paxil, or she may buy real estate. The bank
may lend it to a ball-bearing manufacturer, or they may
lend it to a hedge fund, or a margin trader, or a real
estate dealer, or a takeover artist.
Sure. But my
-Original Message-
From: [EMAIL PROTECTED]
[mailto:[EMAIL PROTECTED]]On Behalf Of Doug Henwood
Sent: Monday, January 08, 2001 3:57 PM
To: [EMAIL PROTECTED]
Subject: [PEN-L:6736] Re: Re: RE: Re: Implications of Surplus Tax Cut?
Ellen Frank wrote:
Personally, I don't see that
Doug writes:
Ok, so what gave us the longest expansion in U.S. history, and a 42%
rise in real GDP?
Doug
I really don't know. But the conventional wisdom really
falls apart on close inspection. For example, real
interest rates were high compared with earlier
years (despite assertions that
You may be interested in the following supply-side analysis of the Clinton
years, which addresses certain of the topics you are discussing:
http://www.polyconomics.com/searchbase/08-18-00.html
David Shemano
-Original Message-
From: [EMAIL PROTECTED]
[mailto:[EMAIL PROTECTED]]On
I
wrote:
Point taken. The key word though, is "may." The grandma
may buy Paxil, or she may buy real estate. The bank
may lend it to a ball-bearing manufacturer, or they may
lend it to a hedge fund, or a margin trader, or a real
estate dealer, or a takeover artist.
Doug wrote:
Sure. But
A cabbie gave me a good dissertation on this.
The company wants to revoke its deal with the
state, whereby it accepted a 42% income tax.
In return it got a monopoly on being the only
land-based casino in the city. (There are
casinos on riverboats.) Now we have the
familiar pattern of the
Jim Devine wrote:
it's the government _debt_ to the people (i.e., the peoples' asset) that's
held as government bonds. The surplus leads to the reduction of this debt.
This reduction is accomplished by using tax dollars, ie income, to buy bond on
the open market. Ie the surplus (and the way
[was: Re: [PEN-L:6730] RE: Re: Implications of Surplus Tax Cut?]
David wrote:
Was not the entire basis of the Clinton economic program, the entire basis
of his taking credit for the growth during his term, the fact that he
increased taxes in 1993, thereby reducing the budget deficit, thereby
[was:Re: [PEN-L:6732] Re: Re: Re: Re: Re: Implications of Surplus Tax Cut?}
Ellen wrote:
I was being sort of facetious initially, but I do think there is an issue
here. The supply-siders argue that investment will be high as long as
government doesn't spook businesses with too much
[was: Re: [PEN-L:6735] Re: Re: Re: Re: Re: Re: Re: Implications of Surplus
Tax Cut?]
At 06:52 PM 01/08/2001 -0500, you wrote:
Ellen Frank wrote:
Point taken. The key word though, is "may." The grandma
may buy Paxil, or she may buy real estate. The bank
may lend it to a ball-bearing
Ellen Frank wrote:
Since the surplus is currently being held as government bonds, I would
expect a surplus-financed tax cut to raise interest rates.
Why should this be so? Why is it all of a sudden conventional
wisdom that interest rates are determined by the federal
budget rather than
Ellen Frank wrote:
Let's say I get a $50,000 tax refund thanks to Dubya, with
which I buy shares in a bio-tech IPO.
Remember that most of the money 'invested' in the stock market goes to
buy existing stock, not new issues.
Once current income starts whirling around in the speculative
David Shemano wrote:
If crowding out is fallacious, and there is absolutely no link between
budget deficits and interest rates, what is one to think of the efficacy of
President Clinton's policies as a contributor to economic growth?
That there was none. Much as I miss Clinton (even though
Ellen Frank wrote:
Doug writes:
Ok, so what gave us the longest expansion in U.S. history, and a 42%
rise in real GDP?
Doug
I really don't know. But the conventional wisdom really
falls apart on close inspection. For example, real
interest rates were high compared with earlier
Ellen Frank wrote:
Personally, I don't see that Clinton's policies contributed to
economic growth.
Ok, so what gave us the longest expansion in U.S. history, and a 42%
rise in real GDP?
Doug
Working-class revolts of the 60s 70s got beat back (both in
struggles at the point of production
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