imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List




IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Learning Nothing in 80 Years

by Ulrich Schaefer Thursday, Oct. 06, 2011 at 1:44 AM
mbatko@yahoo.com

The crisis began in the US where the government became heavily indebted after September 11, 2001 in the war against terror and where property owners, banks and hedge funds long lived openly on credit. The German government was laughed at when it prohibited short-selling in 2010

LEARNING NOTHING IN 80 YEARS

WORLDWIDE ECONOMIC CRISIS

By Ulrich Schaefer

[This commentary published in: www.sueddeutsche.de 8/13/2011 is translated from the German on the Internet, http://www.sueddeutsche.de/wirtschaft/weltwirtschaftskrise-in-jahren-nichts-gelernt-1.1130942.]



Anxiety has returned on the financial markets. The stock exchanges stagger and the politicians trying desperately to contain the worst state debt crisis in eight decades with them. With short-selling and credit-insurances, banks and hedge funds have unhinged whole states. As a result, we are mired in the second worldwide economic crisis since 1931.

Whoever wants to know how long the economic crisis can drag on (and how bad it could be) should look back eight decades. In 1931 the first worldwide economic crisis was in its second year. As it turned out, less than half of the crisis had passed. Full of optimism, politicians, entrepreneurs and economists claimed the worst was over. The president of General Motors proclaimed: “I see no reason why 1931 should not be an extremely good year.” After the crash of 1929, the Harvard Economic Society had declared the downswing over. The American Secretary of Commerce exclaimed: “The depression is past.”

What an illusion – and what alarming parallels to the current worldwide economic crisis! All industrial regions of the world are seized: the US, Europe and Japan. Until a few weeks ago, this crisis was trivialized and repressed.

Now Europe is plagued with several indebted countries at the periphery, Greece and Portugal. Everything seems to be in the best order after the crash of 2008 and 2009. The world economy – and the export-oriented German economy with it – grew to an extent not seen for years. People rejoiced over the boom, the few unemployed and the German economic miracle. Is there a crisis? Of course not.

In the meantime it may be clear to everyone who has comfortably adjusted that the mood is better than one-and-a-half years ago. That epochal crisis that began in the spring of 2007 with the bursting of the US housing bubble and was first widely recognized in September 2008 with the bankruptcy of Lehman Brothers is not past. As eight decades ago, several crisis waves will follow. Triggered by collapsing banks, bankrupt states, bad ratings and – if the worst comes to the worst – the breakdown of the Euro zone.

Anxiety is back on the financial markets whose activity is seemingly so rational but in truth is often ruled by carelessness and madness. The stock exchanges stagger and with them the politicians who try desperately to contain the worst state debt crisis in eight decades while some reinterpret the history of the crisis.

WHERE BANKS LEVERAGE STATES

The unbridled indebtedness of individual European Union states did not exist at the beginning of the second worldwide economic crisis. With brightened numbers, the Greeks obtained access to the Euro by devious means. Since time immemorial, the Italians hardly eliminated their deficit. This crisis did not begin in 2007 in Greece, Italy, Ireland and Spain. Up to the Lehman crash, Ireland and Spain were rock solid debtors who sometimes posted high surpluses.

The crisis began in the US where the government became indebted uninhibitedly since September 11, 2001 in the war against terror and where property owners, banks and hedge funds long lived openly on credit. Encouraged by the cheap money of the US Federal Reserve in the years before the crisis, the financial industry vastly increased its credits to finance their risky businesses. The financial industry called this speculation on credit leverage. Now banks and hedge funds unhinge whole states with short-selling and credit-insurances.

This is a rather cynical game. In all the mistakes committed in budget policy, the states became immeasurably indebted since the Lehman crash to preserve the world economy and the banks from crash. With the help of state bailouts, the financial industry successfully reduced its debt-burden while the debt burden of Ireland increased four-fold, doubled in Spain and rose one-fifth in Germany. In the struggle against economic collapse, private debts were exchanged for state debts.

MISTAKES OF THE MARKET

States with serious economies have economized. As a result, Greece and Italy are suddenly not the only ones in Europe to have budget problems. Therefore the players on the capital markets turned the tables in 2008 with their mysterious financial instruments driving the world to the edge of the abyss. They criticize those states that are regarded as unstable, first Greece and then Portugal. Others make mistakes after politicians made mistakes again and again under the pressure of the crisis.

One can believe in the theory that the financial markets exist to correct the mistakes of past policy. This may be right in cases like Greece and Italy. Politics has failed miserably there. The resolved reforms – greater capital buffers for banks, better risk systems and stress tests – were correct and necessary but were not enough to direct markets in the right channels.

If the world wants to draw the right lessons from this crisis, the states must not only reduce their debts. The financial markets must be organized so crises become rarer and less dangerous. Crises cannot be entirely prevented. A truly global oversight for the financial markets is necessary, a mechanism that sets clear limits. Prohibiting some financial instruments whose economic purpose can hardly be explained is also imperative.

This is possible despite all doubts about the financial branch. The German government was laughed at when it prohibited short-selling in 2010, speculation with securities that one did not even have. The use of credit insurance with which bets can be placed on the bankruptcy of whole businesses or states is also limited.

When Lehman Brothers collapsed in 2008, it was said politics, central banks and the financial industry had learned from the mistakes of the first worldwide economic crisis. Three years later this can be doubted. As in 1931, everyone passed too quickly to the day’s agenda. Other mistakes were made at that time. Readiness (and common will) to draws the right lessons is lacking.

RELATED LINKS:

Greive, Martin: The Economy Sinks in a Deep Crisis of Meaning, August 2011

http://portland.indymedia.org/en/2011/10/410878.shtml

Video: Harvey, David: The Crises of Capitalism

http://www.youtube.com/watch?v=26o22Y33h9s

Harvey, David: The Enigma of Capital and the Crisis This Time, 2010

http://davidharvey.org/2010/08/the-enigma-of-capital-and-the-crisis-this-time/

Jessen, Jens: Underway to Plutocracy: Financial Crisis

http://portland.indymedia.org/en/2011/10/410917.shtml

Keen, Steve: Debunking Economics - Predicting the Unpredictable

http://debunkingeconomics.com/samples/predicting-the-unpredictable/

Keen, Steve: Misunderstanding the Crisis

http://debunkingeconomics.com/samples/misunderstanding-the-crisis/

Report this post as:

Local News

GUIDE TO REBEL CITY LOS ANGELES AVAILABLE A12 5:39PM

lausd whistle blower A10 11:58PM

Website Upgrade A10 3:02AM

Help KCET and UCLA identify 60s-70s Chicano images A04 1:02PM

UCLA Luskin: Casting Youth Justice in a Different Light A02 11:58AM

Change Links April 2018 A01 11:27AM

Nuclear Shutdown News March 2018 M31 6:57PM

Join The Protest Rally in Glendale on April 10, 2018! M29 7:00PM

Join The Protest Rally in Glendale on April 10, 2018! M29 6:38PM

Spring 2018 National Immigrant Solidarity Network News Alert! M19 2:02PM

Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A. M16 5:40PM

Steve Mnuchin video at UCLA released M15 12:34AM

Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups M06 12:10PM

After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video M02 11:44AM

Resolution of the Rent Strike in Boyle Heights M01 6:28PM

What Big Brother Knows About You and What You Can Do About It M01 3:30PM

Step Up As LAPD Chief Charlie Beck Steps Down F14 2:44PM

Our House Grief Support Center Hosts 9th Annual Run For Hope, April 29 F13 12:51PM

Don’t let this LA County Probation Department overhaul proposal sit on the shelf F13 11:04AM

Echo Park Residents Sue LA Over Controversial Development F12 8:51AM

Former Signal Hill police officer pleads guilty in road-rage incident in Irvine F09 10:25PM

Calif. Police Accused of 'Collusion' With Neo-Nazis After Release of Court Documents F09 7:14PM

Center for the Study of Political Graphics exhibit on Police Abuse posters F07 9:50AM

City Agrees to Settle Lawsuit Claiming Pasadena Police Officer Had His Sister Falsely Arre F04 3:17PM

Professor's Study Highlights Health Risks of Urban Oil Drilling F04 12:42PM

Claims paid involving Pasadena Police Department 2014 to present F04 10:52AM

Pasadenans - get your license plate reader records from police F03 11:11PM

LA Times Homicide Report F03 1:57PM

More Local News...

Other/Breaking News

What does the Quran Say About Islamic Dress?? A21 4:15PM

Biodiversité ou la nature privatisée A20 11:22AM

The Market is a Universal Totalitarian Religion A20 7:14AM

Book Available about Hispanics and US Civil War by National Park Service A19 5:52PM

The Shortwave Report 04/20/18 Listen Globally! A19 4:01PM

The Republican 'Prolife' Party Is the Party of War, Execution, and Bear Cub Murder A19 11:48AM

Neurogenèse involutive A18 9:21AM

Paraphysique de la dictature étatique A16 10:13AM

Book Review: "The New Bonapartists" A16 3:45AM

The West Must Take the First Steps to Russia A14 12:25PM

Théorie générale de la révolution ou hommage à feu Mikhaïl Bakounine A14 3:30AM

The Shortwave Report 04/13/18 Listen Globally! A12 3:50PM

“Lost in a Dream” Singing Competition Winner to Be Chosen on April 15 for ,000 Prize! A12 3:48PM

The World Dependent on Central Banks A12 4:43AM

Ohio Governor Race: Dennis Kucinich & Richard Cordray Run Against Mike DeWine A11 9:40PM

March 2018 Honduras Coup Again Update A10 10:52PM

Apologie du zadisme insurrectionnel A10 3:33PM

ICE contract with license plate reader company A10 1:14PM

Palimpseste sisyphéen A09 11:23PM

Black Portraiture(S) IV: The Color of Silence...Cuba No...Cambridge Yes A09 5:32AM

Prohibiting Micro-Second Betting on the Exchanges A09 4:18AM

Prosecutors treat Muslims harsher than non-Muslims for the same crimes A08 10:33PM

Amy Goodman interview on cell phone safety A08 10:29PM

Mesa, Arizona police officer kills unarmed white man A08 9:50PM

Israeli leaders should be prosecuted for war crimes A08 9:48PM

Paraphysique de l'autorité A08 12:11AM

Two Podcasts on fbi corruption A06 10:13PM

Fbi assassins assault & try to kill DAVID ATKINS A06 7:29PM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy