economics

By Sam Williams

By Martin Hart-Landsberg

August 15, 2011 -- Reports from the Economic Front, posted at Links International Journal of Socialist Renewal with Martin Hart-Landsberg's permission -- The US economy is in trouble and that means trouble for the world economy. According to the United Nations Conference on Trade and Development’s Trade and Development Report, 2010, “Buoyant consumer demand in the United States was the main driver of global economic growth for many years in the run-up to the current global economic crisis.”

Before the crisis, US household consumption accounted for approximately 16 per cent of total global output, with imports comprising a significant share and playing a critical role in supporting growth in other countries. In fact, “as a result of global production sharing, United States consumer spending increas[ed] global economic activities in many indirect ways as well (e.g. business investments in countries such as Germany and Japan to produce machinery for export to China and its use there for the manufacture of exports to the United States)”.

By Silla Sigurgeirsdóttir and Robert H. Wade

By Martin Hart-Landsberg

August 2, 2011 -- Reports from the Economic Front, posted at Links International Journal of Socialist Renewal with Martin Hart-Landsberg's permission -- The US Congress has finally agreed on a deficit reduction plan that President Barack Obama supports.As a result, the debt ceiling is being lifted, which means that the Treasury can once again borrow to meet its financial obligations.

Avoiding a debt default is a good thing.However, the agreement is bad and even more importantly the debate itself has reinforced understandings of the US economy that are destructive of majority interests.

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.

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.

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.

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:

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. 

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

By Dimitris Fasfalis