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economics

United States: Debt crisis -- the issue is the war machine, not welfare

Source:  “Graphic: Who pays the taxes?" What Went Wrong: The Betrayal of the American Dream. February 7, 2011.

By Paul Kellogg

July 27, 2011 -- PolEconAnalysis, posted at Links International Journal of Socialist Renewal with the author's permission -- As July came to an end, the United States central government had come up against its congressionally mandated debt ceiling. Without an agreement to raise that debt ceiling – last set at US$14.3 trillion – the US central government will be unable to borrow money to pay its bills. The consequences could be extremely serious – soaring interest rates, a collapse of the US dollar, not to speak of social security stipends, pensions and salaries going unpaid.

United States: Happy anniversary, the 'economic recovery' turns two

By Martin Hart-Landsberg

July 7, 2011 -- Reports from the Economic Front, posted at Links International Journal of Socialist Renewal with the author's permission -- The charts above deserve a long careful look. According to the US National Bureau of Economic Research, the Great Recession ended in the United States in June 2009. Not many working people are celebrating the expansion’s second anniversary.

As Paul Wiseman, an Associated Press economics writer, notes:  

[This economic] recovery has been the weakest and most lopsided of any since the 1930s. After previous recessions, people in all income groups tended to benefit. This time, ordinary Americans are struggling with job insecurity, too much debt and pay raises that haven’t kept up with prices at the grocery store and gas station. The economy’s meager gains are going mostly to the wealthiest.

Greece: 20 popular fallacies concerning the debt crisis

By the Rosa Luxemburg Foundation (Germany)

July 9, 2011 -- It’s that time again! Greece needs more loans and governments in Europe are arguing about whether it’s really necessary and who should foot the bill. There is widespread opinion in Germany that Greece itself is to blame for the problems it now finds itself in. It is claimed that first of all cheated its way into the eurozone, then the government spent too much and the governed worked too little, many believe.

Latently nationalistic interpretations of this kind have been nourished by German politicians and the media, who have no end of proposals for how to "solve" the crisis. For example, the Greeks should save more, work more and sell their public property – and if all of these measures do not help, then Greece will just have to leave the eurozone or declare itself bankrupt.

The stupid thing is, neither are the causes of the crisis that have been named are correct, nor will the proposed ways out of the crisis achieve their goal.

The Rosa Luxemburg Foundation has produced Sell your islands, you bankrupt Greeks! to explain the truth about the fallacies being spread about the causes of the Greek crisis, and who is responsible.

China, Brazil, Indonesia: Capital is a fickle lover

By Walden Bello

June 22, 2011 -- Foreign Policy In Focus -- "China is today the ideal capitalist state: freedom for capital, with the state doing the 'dirty job' of controlling the workers”, writes the prominent Slovenian philosopher Slavoj Zizek. “China as the emerging power of the twenty first century … seems to embody a new kind of capitalism: disregard for ecological consequences, disdain for workers' rights, everything subordinated to the ruthless drive to develop and become the new world force."

Capital, however, is a fickle lover.

Recently, a growing number of corporate leaders are having second thoughts about the “Chinese model” that has been so central in the globalisation of production and markets over the last three decades.

Labour rises

Capitalist globalisation and the environment: Offshoring carbon emissions

By Martin Hart-Landsberg

June 12, 2011 -- Reports from the Economic Front, posted at Links International Journal of Socialist Renewal with the author's permission -- More than 3000 participants from 183 countries are attending a two-week UN sponsored climate gathering in Bonn, Germany.  The talks are supposed to help prepare the agenda for COP 17, or as it is more formally known, the 17th Conference of the Parties of the United Nations Framework Convention on Climate Change (defenders of the environment have renamed the meeting the Conference of Polluters) which will take place November 28 to December 9, 2011, in Durban, South Africa. 

The cost of climate inaction grows worse.  As the Earth Island Journal reports:

China: Capitalist globalisation and its consequences

'China is not stealing jobs from anyone. The globalisation process is erasing jobs everywhere, including in China'

By Martin Hart-Landsberg

June 6, 2011 -- Reports from the Economic Front, posted at Links International Journal of Socialist Renewal with the author's permission -- Although capitalism has always been a global system, the international integration of production and finance and our dependence on cross-border activities seems greater than ever before. At the risk of oversimplifying, we now have a world system within which Latin America, Africa and the Middle East specialise in the production and export of primary commodities, increasingly to East Asia.

East Asia operates as the world’s manufacturing hub, exporting final products to the developed capitalist world, especially the United States. And the United States specialises in providing the finance that underpins the international production system and developed capitalist country consumption. 

Is the capitalist economic crisis over?

Demonstrators in London against government cutbacks, March 26, 2011.

By Dimitris Fasfalis

June 6, 2011 – Links International Journal of Socialist Renewal -- In so far as the global capitalist media are concerned, the global recovery and the boom in Asia and Latin America have created an ideological illusion that hides the unfolding capitalist crisis.

The latest IMF World Economic Outlook (April 2011) sets the tone of established economists concerning the pace of global economic growth: “The world economic recovery continues, more or less as predicted.” The IMF’s line of argument then runs as follows: market economies have always undergone periodic crises, which are a fundamental feature of their functioning, ensuring a healthy and sustainable growth.

Are ‘African lions’ really roaring? Latest fibs from world financiers

Africans who spend between US$2-$20 a day are now "middle class", says the African Development Bank chief economist Mthuli Ncube.

By Patrick Bond

May 10, 2011 – Links International Journal of Socialist Renewal -- Apparently, “one in three Africans is middle class” and as a result Africa is ready for “take off”, according to African Development Bank chief economist Mthuli Ncube speaking last week at the World Economic Forum-Africa summit in Cape Town. “Hey you know what, the world please wake up, this is a phenomenon in Africa that we've not spent a lot of time thinking about.”

Is the economic crisis over?

Introduction by Mike Treen

May 2, 2011 -- Links International Journal of Socialist Renewal -- Below is the latest entry from the Critique of Crisis Theory blog by Sam Williams [posted here with Williams' permission]. In it he analyses the current stage of the industrial cycle and asks, “Is the economic crisis over?”.

I hope that reading this post will encourage people to look more closely at the entire series on Critique of Crisis Theory, which has taken the form of a developing book on crisis theory.

The first chapter explains the biggest challenge the author faced — the fact that Marx did not leave a completed crisis theory. It was certainly the plan when Marx began Capital, but in the end only one volume was completed before his death and volumes two and three only took partial steps to a completed theory.

Global microfinance industry totters as Grameen Bank founder’s career ends in disgrace

Grameen Bank's Muhammad Yunus (right) with Bangladeshi women. The promised empowerment and poverty reduction failed to eventuate.

By Patrick Bond

April 27, 2011 -- Links International Journal of Socialist Renewal -- Bangladesh’s once-legendary banking environment is now fatally polluted. The rot is spreading so fast and far that the entire global microfinance industry is threatened. Controversy ranges far beyond poisonous local politics, the factor most often cited by those despondent about Grameen Bank’s worsening crisis.

Climate finance leadership risks global bankruptcy

By Patrick Bond

April 24, 2011 -- Links International Journal of Socialist Renewal -- South Africa’s most vocal neoliberal politician, Trevor Manuel (pictured above), has just been named as co-chair of the Green Climate Fund. On April 28-29, 2011, in Mexico City, Manuel and other elites met to design the world’s biggest-ever replenishing pool of aid money: a promised US$100 billion of annual grants by 2020, more than the International Monetary Fund (IMF), World Bank and allied regional banks put together.

The Climate Justice lobby is furious because, as the network of 90 progressive organisations wrote to the United Nations, “The integrity and potential of a truly just and effective climate fund has already been compromised by the 2010 Cancún decisions to involve the World Bank as interim trustee.” A Friends of the Earth International study earlier this month attacked the World Bank for increased coal financing, especially $3.75 billion loaned to South Africa’s Eskom a year ago.

South Africa: As Durban climate summit approaches, industrial policy hits green wall

South Africa’s trade and industry minister Rob Davies.

By Patrick Bond

April 18, 2011 – Links International Journal of Socialist Renewal -- Hosting the Durban COP17 – let’s rename it the “Conference of Polluters” – starting in late November puts quite a burden on the African National Congress government in Pretoria: to pretend to be pro-green.

Embarrassingly, last week’s US Export-Import Bank loan of US$805 million to South Africa will feed huge profits to the notorious US corporations Black & Veatch so that a vast coal-fired power plant, “Kusile”, can be constructed, mainly on behalf of huge smelters run by BHP Billiton and Anglo American Corporation – whose profits soar away to Melbourne and London.

Tariq Ali: The Obama syndrome

Audio of Tariq Ali's full address (63 minutes):

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March 29, 2011 -- ABC Radio's Big Ideas -- In 2008, Obama could do no wrong. To the educated middle class, he was an intelligent and reflective writer who had penned his own insightful memoir. To the conservative elite, he was a Harvard graduate and expert in constitutional law. To the young people who came out in droves to vote for him, he liked the same TV shows, listened to the same music and "got" social networking.

The economic crisis -- What are the main causes?

By Jeyakumar Devaraj, Socialist Party of Malaysia

February 13, 2011 -- Links International Journal of Socialist Renewal -- The world economic system is being buffeted by a series of crises, and this in turn has led to economic hardships for millions of people throughout the world. In many countries, the people are suffering in silence, but there are increasing signs of protest. There were mass protests in Britain because of tuition fee hikes, protests in France protesting the raising of the pensionable age, in Spain and Ireland because of wide budgetary cuts that have slashed spending on social services such as health care and welfare, and most recently, popular revolts that have brought down dictatorships in Tunisa and Egypt.

It is highly probable that the unfolding economic crisis is going to continue sending ripples across the world, and these are to going to affect us negatively in Malaysia. There is therefore an urgent need for us to understand what is happening and why, so that we can prepare ourselves for the economic trials ahead. Unfortunately the conventional media's coverage is superficial and misleading.

Video: Socialist Alliance talk on the global financial crisis


Socialist Alliance member Barry Healy presents a talk to the Western Australian Socialist Alliance on the topic of the global financial crisis. It was given in October 2010.

The global financial crisis feels like it came out of thin air. The mainstream media talk of it as an aberration in the normal operations of capitalism. Politicians talk about "the recovery" as though the worst is already behind us.

Is any of that true?

What if the GFC is just the latest in a series of bigger or smaller shocks that have dogged capitalism from its outset because there are inherent faults in the way the system operates? What if "the recovery" is as phoney as the weapons of mass destruction that justified the invasion of Iraq?

The crisis has not hit Australia as hard as other countries -- will that last?

To get to grips with these issues we need to take a long view of history and examine capitalism from its birth to what could be its death agony.

Martin Hart-Landsberg: China and the jobs issue

"Approximately 90 per cent of China’s high technology exports to the US are produced by multinational corporations and many of them are being bought and sold in the US by other multinational retailers."

By Martin Hart-Landsberg

January 21, 2011 -- Reports from the Economic Front -- The president of China, Hu Jintao, just completed a visit to the United States and, not surprisingly, many people used the occasion to raise the jobs issue. The US economy continues to suffer from high unemployment. And the US continues to run an enormous trade deficit with China, a deficit that dwarfs any other bilateral deficit. The connection made is as follows: China is an unfair trader. Its state policies, including subsidies and labour repression, are a major reason for the destruction of the US manufacturing sector and jobs.

This nation-state framing encourages us to see US workers in direct competition with Chinese workers, with their gains largely coming at our expense. It also tends to promote a simple response: force China to quicken its embrace of market forces so that its economy will become more like ours. Unfortunately, this framing misleads more than it helps to clarify current economic dynamics. It also leads to a counterproductive response.

Portugal: More austerity looms in 2011

General strike against austerity in Portugal, November 24, 2010.

By Raphie de Santos

January 4, 2011 -- Socialist Resistance -- A full financial bailout of Portugal involving the European Central Bank (ECB) and the International Monetary Fund (IMF) looks set to happen in the first half of 2011. This will involve severe austerity conditions being imposed on the Portuguese people by the ECB and IMF.

The indications are clearly there as at the end of 2010 Fitch joined the two other credit rating agencies to downgrade Portugal’s debt to A+, which is just above junk status. They are concerned that the current account deficit running at 9% is unsustainable with the ruling Socialist Party unable to impose the effective 4% budget cuts in 2011 that they outlined at the end of 2010.

Irish crisis: A complete failure for neoliberalism

Protest against austerity outside Irish government buildings in Dublin.

By Eric Toussaint, translated by Christine Pagnoulle in collaboration with Judith Harris

January 3, 2011 -- CADTM -- For a decade, Ireland was heralded by the most ardent partisans of neoliberal capitalism as a model to be imitated. The "Celtic Tiger" had a higher growth rate than the European average. Tax rates on companies had been reduced to 12.5% |1| and the rate actually paid by the transnational corporations that had set up business there was between 3 and 4% -- a CEO’s dream!

Message to the US -- Blame the wars, not China

By Paul Kellogg

December 2, 2010 -- PolEconAnalysis -- There is a growing chorus of voices in the media and the academy singling out the actions of the Chinese state as central to the dilemmas of the world economy. This focus finds its most articulate presentations, not in the xenophobia of the right, but in the polite analysis of many left-liberals.

Paul Krugman, for instance, writing in the run-up to November’s G20 summit in South Korea, praised the United States’ approach of creating money out of nothing (“quantitative easing”) as being helpful to the world economy, and criticised the Chinese state’s attempts to keep its currency weak as being harmful. “The policies of these two nations are not at all equivalent”, he argues, adding his influential voice to the chorus which is increasingly targeting China for the world’s woes.[1] Krugman’s, however, is a simplistic analysis which overlooks the role of the US over decades in creating huge imbalances in the world economy, and has the dangerous effect of scapegoating one of the poorest nations of the world (China) for the problems created by the world’s richest.

Samir Amin: Global currency wars, US imperialism and the global South

November 25, 2010 -- Pambazuka News -- Marxist economist Samir Amin speaks to Pambazuka's Firoze Manji on the misleading rhetoric over the so-called currency war. The real problem, he argues, is the disequilibrium in the global integrated monetary and financial system, in which the US insists on the right to control its currency, but denies the same rights to others, such as China. The countries of the global South need to leave the US and its allies to sort out their own problems and concentrate on developing regional currencies and exercising strict control over capital flows, Amin argues.

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