- js reader version
- view hidden posts
- tags and related articles
by Tomasz Konicz
Thursday, Dec. 08, 2011 at 6:39 AM
Capitalism cannot function any more without credit-financed debt on account of its increasing productivity. The recession will come because the indebtedness-dynamic can hardly be maintained with which the capitalist zombie-economy is kept alive in its pseudo-life.
CRISIS AND MANIA
By Tomasz Konicz
[This article published in the German-English cyber journal Telepolis 11/4/2011 is translated abridged from the German on the Internet, http://www.heise.de/tp/artikel/35/35813/1.html.]
A crisis can also have its amusing sides. If the current processes of disintegration in the European Union were not so filled with fire risks, one could amuse oneself immensely that politics and the mass media perform with increasing crisis intensity… The leaders of the “western world” act like schoolboys who try to establish a pecking order on the schoolyard with mutual vulgar remarks.
A few months ago the shrill chauvinist tones with which new culprits are always blamed for the European debt crisis by the mass media – whether now Greeks  or Italians . The masses are incited.
Since the announcement of the referendum over the next aust4erity program in Athens, much of the mass media passes over to blatant smear campaigns against Greece. Der Focus compares “Greeks” with junkies dependent on “fresh money”  (who aren’t in capitalism?). On the other hand, the Leipzig Volkszeitung newspaper asks rhetorically: “Are Greeks crackpots>” The referendum – a democratic matter of course – is described as “madness” .
For a Saxony newspaper, democracy in crisis times is simply irresponsible . “A referendum cannot be held in a politically inflamed climate as in Greece.” In the wicked inflammatory harangue, the Bild newspaper equates Greece’s population with lepers… “The Euro-rescuers must realize Papandreou is not the solution. He is part of the problem… European politicians must quickly look for alternatives. Otherwise the Euro will not be rescued.” Wirtschaftswoche
ECONOMICS WEEKLY (WIRTSCHAFTSWOCHE)
The recent decision of the Greek government to replace the military leader  does not seem so bizarre or out of place. The Greek finance minister is regarded as a willing executor of the Brussels austerity terror in Greece… .
The most bizarre remarks of the local pack of media hounds are based on the premise that crisis measures executed on Berlin’s and Brussels’ guidelines in Greece were an “aid” for the country sinking in a grave depression. Athens wants to hold a referendum on “Europe’s assistance” , Welt Online said. FAZ (Frankfurter Allgemeiner Zeitung) newspaper speaks of a “reversal of history” since Greece could reject a “trillion Euro relief package” .
“Under the greatest dislocations and under considerable political costs, the EU laces up a relief package of trillions to bring the insolvent member state in the southeast from the abyss at the last minute. Even the big European banks have `voluntarily’ agreed. The outcome of the announced referendum is completely uncertain. Markets and politics have a depressing premonition. Papandreou who could fall any day plays all or nothing.” FAZ (Frankfurter Allgemeiner Zeitung)
Grotesque distortions of reality that reach Orwellian dimensions cannot meet minimal standards for logical statements. Why should the outcome of the referendum be “everything other than certain” if a relief package of trillions is involved?
REALITY TURNED UPSIDE DOWN
The feverish dreams of FAZA and Welt turn reality upside down. The past crisis policy of the EU contributed to Greece long being in a free fall into the economic “abyss.” The crisis credits granted Greece went along with extreme “austerity packages” which amounted to a ruthless deforestation program and led to a grave economic collapse.
In 2009 Greek state indebtedness reached 120 percent of the national gross domestic product. Athens’ state debt swelled to around 160 percent of the GDP and should fall back to around 120 percent of the GDP in 2020 – thanks to the debt brake that is now put in question again. Thus the latest relief package of trillions of Merkel and Sarkozy’s so-called Euro-rescuer” would reduce the debt mountain in Greece to Athens’ level before the beginning of the “austerity measures.”1
Greece saved into depression in the meantime. The circumstance that the austerity measures triggered a tremendous recession on account of collapsing state and private demand underlies the failure of this hard-as-nails austerity policy in Athens. In this downward economic spiral , tax revenues fall and social spending quickly increases, vastly exceeding the savings of the “insolvent master student”  Greece. The depression spiral makes the state debt rise ever-higher in relation to GDP – besides increasing impoverishment. Children already die of hunger in Greek schools .
With every EU credit package to Greece, Athens was forced to carry out drastic austerity measures that led to a deepening of the depression and escalation of the debt crisis. Every time Brussels and Berlin insisted that new deforestation programs are implemented. The latest “EU relief package” for Greece is also coupled to drastic austerity measures. Thus the EU relies on obviously failed policy. Reality in Greece – that saved de facto into state bankruptcy – is simply faded out by politics and the mass media. Every failed austerity package only provokes calls for continuation of the austerity terror in Athens. This obvious inability to see the failure of austerity policy seduced the US economist Krugman to remark  that EU elites are “miracle healers who dream up things to confirm their prejudices.”
The sheer madness of European crisis policy is also manifest in that other European debtor countries are forced to the same austerity policy that failed in Greece. A similar development is occurring in Portugal  where hard-as-nails austerity programs were also implemented in a countermove for crisis credits. At the end of October 2011, the government in Lisbon corrected downwards its economic forecast for 2012. In 2012 the GDP will shrivel 2.8 percent. Originally Lisbon assumed a minus of 1.8 percent. This economic contraction will also make impossible the realization of the austerity programs from Brussels and Berlin.
At the last EU summit, Italy was pressed by Berlin and Paris to take a similar course to budget consolidation by means of brutal austerity programs as forced on Greece and Portugal with disastrous consequences. So Italian Prime Minister Berlusconi under pressure agreed to anchor a “debt brake” in the constitution according to the German model, to consolidate the state budget by 2012 and to lower the state debt from 120 percent of GDP to 113 percent by 2013. A similar fall like Greece and Portugal threatens Italy that also perseveres in economic stagnation.
Albert Einstein defined madness as “doing the same things again and again and expecting different results.” European crisis policy fulfills all the prerequisites to be termed mad according to Einstein’s definition.
AUTHORITARIAN IDENTIFICATION WITH THE ECONOMY
This manic repetition pressure in implementing austerity programs – amounting to ideologically motivated sadistic punishment actions for alleged “debt sinners” – by politics also has its echo in the mass media. It seems as though the increasingly crass contradictions of capitalism in agony promote a kind of mass flight into a worldview wonderland or magic realm. The capitalist system crisis is not recognized as such. A feverish search for “culprits” takes place while capitalism remains the silent presupposition. Broad parts of the public discourse are but off from reality in a kind of mass media induced bubble in which the old ideological assumptions can be nursed.
Why is the call for punishment and hard-as-nails austerity terror toward southern European “debtor countries” so loud in Germany? Employees in Germany with the Hartz IV laws [German welfare reform that combined unemployment benefits with income support, drastically reduced the time of benefits and was partly invalidated by the German constitutional court] were forced to wage renunciation and precariousness of vocational life which was generally legitimated as a necessary sacrifice on the altar of the “economic location Germany.” In the course of enforcing Hartz IV, the economy was raised to the central legitimation authority of public discourse. This dominant economism intensifies hatred for everything that seemingly hinders the smooth functioning of the economic machine.
“The constant orientation in economic goals – more exactly, the demand for submission under its premises – reinforces an authoritarian cycle. This orientation leads to identification with the economy. The renunciation demands flow into that authoritarian aggression that forges against the weaker.” [from the study: The Middle in Crisis]
A simple submissive thinking is involved here in which rage is directed against all people unwilling to bow to the premises of the “economy” running amok and carry out general strikes instead of resigning to low wages and Hartz IV forced labor. For all persons who internalized the premises of the economy and therefore practice renunciation, resistance against “practical economic constraints” must seem insufferable.
GLOBAL ZERO SUM GAME
This totalitarian economism with the forced export fixation is preached to all Europe in the crisis by German political decision-makers. With the “pact for competitiveness”  originally hatched by Berlin, all Euro-zone countries should be rebuilt according to the German model by means of social cuts and wage reductions to competitive and export-fixated national economies. Berlin could actually move several southern-European countries to introduce “debt brakes” according to the German example. Recently France’s president Sarkozy publically praised the “German model” and described it as an “example”  for France.
The only problem with this economic “Germanization” of Europe is that arithmetic stands in the way of the project. Around 70 percent of the economic growth in Germany since 2009 resulted from the foreign trade surplus of the German export industry . Without this trade surplus, there would not be the illusion of an “economic miracle” in Germany cultivated by the mass media.
With this fixation on trade surpluses, the global zero sum game is ignored. If all global export surpluses and trade deficits are offset against each other on the global plane, this always results in exactly zero euro. Thus a single national economy can only gain export surpluses when other countries post deficits. For that reason, German export industry would only be successful because the target countries of these German exports became indebted which contributed to the debt crisis in the Euro zone. An export fixation of the whole Euro-zone was only possible toward other countries and currency zones. This possibility was only realized through indebtedness processes in the target countries of this export offensive. Mathematics stands in the way of this delusional attempt to form a Euro-zone according to the German example. The world is now a limited space.
SEARCH FOR SCAPEGOATS
Still the most dangerous moment of the spreading crisis-mania is the restless search for the “culprits” who could be blamed for the developing disaster.
The Greeks and Italians currently enjoy great popularity as scapegoats. The trend is to accuse southern Europeans of mental deficits that contributed to the formation of the huge debt mountains there. Hatred toward southern Europe is promoted . In the meantime, the “European taskmaster” Germany is promoted into a central bogeyman. Greedy bankers or – somewhat more specifically – Anglo Saxon finance capital are treated as causal agents of the crisis. In Germany, the impoverishment going along with the crisis is referred back to alleged genetic deficits of marginalized Muslims while the miserable criminality of gypsies is hallucinated as a cause of impoverishment  in southeast Europe.
The fire-risk personification of the crisis processes of the capitalist system is a common thread in this search for scapegoats. The crass contradictions of crisis capitalism become characteristics of certain population groups. “Social problems are interpreted as individual or ethnic qualities” . This can ultimately lead to the murderous conclusion that the existence of a certain group or person must be ended to overcome the crisis.
In the last worldwide economic crisis, the Nazis hallucinated the Jews into a personification of the crisis. The crisis enables nationalism and chauvinism native in Europe to flourish again since the oppositions between states become sharper. This also goes along with nationalist apportioning of blame and attacks. This renaissance4 of nationalism also occurred in the train of the last worldwide economic crisis. The results are well-known.
The conflicts now escalating between the central European powers show that the crisis process is very far advanced. The crisis of the capitalist system eats away from the periphery to the center. In the European Union, Eastern Europe’s marginal national economies were first seized by the crisis dynamic that spread to southern Europe and is now manifest in France with threatening creditworthiness devaluation. The capitalist crisis policy basically consists in charging the whole crisis burden to national economies and population groups that are seized by the crisis dynamic. The allegory of a sinking boat in which the passengers of the first class throw overboard those of the second and third classes to gain some time until they themselves have their turn reflects this crisis policy with its contempt for humankind. This little game comes to an end with the arrival of the crisis in France. The crisis cannot be shifted any more to marginal countries or population groups.
Capitalism in a system crisis is not reflected in this search for scapegoats, shifting of crisis burdens and mutual national apportioning of blame. Its structures and categories are on the point of dissolution. Terms like labor market, capital and money have assumed the character of gifts of nature and are questioned as never before. For the consciousness caught in capitalist categories, it seems as though the world also perishes with this system, that the seeming “eternal natural laws” of capitalist socialization are being annulled. Misconduct or qualities of particular groups must be made responsible for the misery since capitalism ideologized into a national prerequisite of human existence does not come into question as a cause of crisis. The obvious idea that the present crisis could be a crisis of capital  seems hardly formulable within the public discourse.
This blatant inability to connect the present capitalist system crisis with the capitalist system is manifest very crassly in the public interpretation of the most obvious consequences of the crisis: the gigantic debt mountain under which the system threatens to collapse. These are often described as a drunken excess  in which economies lived “beyond their means.” The “greed” of the bankers or the “Southern European routine” is then blamed. The mass media do not come to the obvious idea of confronting these ideological ideas with the bitter reality of all those countries that attempt debt reduction and budgetary revitalization. Otherwise the insight would dawn on the responsible that it was this indebtedness dynamic that kept this system going [cf. “Worldwide Economic Crisis as Debt Crisis,” 2009, http://www.heise.de/tp/artikel/30/30415/1.html].
The time runs out in which a rational and radical questioning of social relations (and capital is nothing but a social relation) under which we live is still possible. From a certain escalation stage of the crisis, the blind rage that is already all-pervasive – now expressed in wild apportioning of blame – becomes overpowering. Mania will completely seize the crisis-shaken society.
A QUESTION OF TRUST
Escalating debt crisis brings the world economy to the edge of a new recession – even if the relation between the two phenomena is constantly turned upside down
By Tomasz Konicz
[This article published 10/13/2011 is translated from the German on the Internet, http://www.streitzuege.org/2011/eine-frage-des-vertrauens/print.]
While Europe’s states and banks threaten to collapse under an increasing swelling debt burden, the signs for a new economic crisis multiply worldwide. Within middle class economics and technical journalism, there is only speculation whether a stagnation period is now imminent for the world economy or whether a new recession threatens. The economic-political danger signals have long been on red on both sides of the Atlantic – in the Euro-zone and in the US.
On October 4, 2011 Ben Bernanke, head of the Federal Reserve, warned that the United States could soon be caught up “in the whirlpool of economic events.” Bernanke warned of a continuously high unemployment an anemic growth. The economic recovery since the outbreak of the 2008 financial crisis turned out much weaker than originally assumed. The highest US monetary guardian is apprehensive. In the first half of 2011, the US gross domestic product only grew 1.0 percent compared to the previous year. The well-known economist Nouriel Roubini, one of the few who correctly predicted the 2008 worldwide economic crisis, sees hardly any chance for preventing a new crisis either in the US or Europe. “The question is not whether a new relapse into recession will occur but how soft or hard the cooling will be compared to other financial crises.”
At the end of September 2011, the chief economist of the Commerzbank Jorg Kramer assumed the Euro-zone would pancake into a recession in the winter: “I am convinced less and less that we only face a mere slowing down of growth in the Euro-zone.”
However Kramer revealed a strange understanding of the causes of the threatening recession: “The state debt crisis alarms the economy and puts milde2w or blight over prospects.” A similar interpretation of the causes of the recession underlies the verbal attacks directed by Washington again and again against Europeans. The debt crisis in Europe could take its toll on the US and the world economy, US Treasury secretary Timothy Geithner explained at the beginning of October since this would “massively damage” trust and demand.
Is all this only a question of trust? Did “greedy bankers” and “financial market fraudsters” shatter the confidence of brave industrial capitalists and drive the economy into recession? The attempt of the US administration to move Europeans to issue more economic packages amid the debt crisis is absurd. This brought a first presentiment of the connection between debt crisis and economic collapse. Geithner started an initiative in September at the EU summit in Wrocaw. Despite growing mountains of huge debts, Fed chairman Bernanke warns constantly of cuts in state spending.
The debt-financed state-economic programs applied worldwide after the outbreak of the 2008 crisis was the most important global fuel that led the world economy out of its deep recession. Global economic expenditures amounted to nearly five percent of worldwide economic output at that time which especially benefited export-oriented economies like the German economy. Most of these economic packages ended in the middle or end of 2010. Since then the world economy altogether has been in a tailspin and is now on the threshold of recession. Ultimately the demands for more debt-financed economic packages from Washington are only an implicit admission that capitalism cannot reproduce without credit-financed demand.
With this state-deficit economy, only the indebtedness dynamic previously practiced in the scope of diverse speculation bubbles on the proliferating financial markets was “nationalized.” At the end politics at least in the EU and the US carries out expensive crisis measures – like the economic packages – through further indebtedness on the financial markets. Therefore the European state debt crisis is at the same time a financial market crisis. At the end the present “spiral between state-debts and the banking crisis” (Handelsblatt) in the EU shows the common economic functions inherent in the state and private indebtedness processes of the last years. These huge debt mountains created an additional credit-financed demand without which capitalism could not function any more on account of a constantly increasing productivity. As soon as the – private or state – debt-generated demand collapses, a self-strengthening downward spiral begins in which over-production leads to mass dismissals that lowers demand again and causes further waves of dismissals.
As soon as one of the two poles of capitalist socialization – state or capital – breaks down under its debt burden, the over-production crisis must also lead into a catastrophic economic collapse. The world economy finds itself at the edge of collapse. This is not because capital as a “timid deer” (Otto Graf Lambsdorff) has lost all future confidence because of financial market frauds. The recession will come because the indebtedness dynamic can hardly be maintained with which the capitalist zombie-economy suffocating in its own productivity is kept alive in its pseudo-life.
HOMEOWNERS, THE GREEKS OF NORTH AMERICA
By Moritz Koch, New York
[This commentary published on 10/26/2011 is translated from the German on the Internet, http://www.sueddeutsche.de.]
Large parts of the country are “under water.” Many Americans cannot pay their mortgages, must vacate their homes and are insulted for this by conservatives. But Obama will not be intimidated. Homeowners need a debt reduction. Otherwise the economy is paralyzed.
This was a key moment in the genesis of the rightwing Tea Party movement. In February 2009 the television moderator Rick Santelli got worked up. “Do we really want to subsidize the mortgages of losers?’ he asked angrily. Santelli’s tirade was a YouTube hit. To many conservatives, he spoke from the soul for those who sensed a socialist conspiracy against the American way of life behind the timid plans of President Barack Obama to support the housing market.
In Las Vegas, real estate brokers offer bus tours on which they drive potential buyers from one foreclosed house to another. In the crisis, millions of Americans lost their homes.
Santelli’s words echo today. The intimidated government cannot find the courage to resolutely tackle the housing crisis. On Monday, Obama announced reforms. However they do not go far enough. The country needs a rescue-cruiser to maneuver through the debt ocean but is only given a rubber boat.
Vast parts of the US are “under water.” These houses are worth less than the credit encumbering the houses. One quarter of all US homeowners are heavily indebted in this way; the debt-heavy are 50 percent or more in the former boom states of Florida, Arizona and Nevada. Many give up and adjust their installment payments. The banks order a foreclosure, housing prices fall again and even more Americans are forced under water.
It is a vicious circle and the whole economy suffers under this. The debt burden slows down the consumption of the middle class on which the US economy depends. The real estate mess is America’s most important growth obstacle.
The answer of the government is called Harp, the Home Affordable Refinance Program. The initiative should give homeowners the possibility of exchanging their old mortgages for new ones with lower interests – when the house is under water. However Harp is a fai8lure or disappointment. The goal of the government was to help four to five million debtors. However less than a million Americans used the program and the real estate market has hit bottom again. Now Obama promises to loosen the criteria for participating in Harp. A radical beginning is necessary: a debt cut that takes into account the price drop of homes. Homeowners are the Greeks of North America.
The fear that a discount for the middle class would trigger a new wave of bank failures is exaggerated. The state real estate financiers Fannie Mae and Freddie Mac guarantee more than half of all US mortgages. The state cushions the failures. While the federal budget will be strained, the government must answer for the losses of the two institutes from evictions delayed by the past policy.
Politically a debt-cut could be easily carried out. Obama could instruct Fannie and Freddie without congressional approval. The growth impulses would be enormous. Through the lower monthly installments, millions of families would have more money for consumption. They would be more mobile again since they could sell their houses without loss and accept jobs in other cities or states.
Critics like Santelli can rage with fury. The government can be intimidated by ranting and raving at the rightwing margin. Three years after the bailout of the banks, it is time the state leaps to help citizens. America must contain the debt flood that drowns growth.
Report this post as:
More Pix: "Families Belong Together," Pasadena
"Families Belong Together" March, Pasadena
Short Report on the Families Belong Together Protest in Los Angeles
Summer 2018 National Immigrant Solidarity Network News Alert!
Watch the Debate: Excluded Candidates for Governor of California
Change Links June 2018 posted
The Montrose Peace Vigil at 12 Years
Unity Archive Project
Dianne Feinstein's Promotion of War, Secret Animal Abuse, Military Profiteering, Censorshi
CA Senate Bill 1303 would require an independent coroner rather than being part of police
Three years after OC snitch scandal, no charges filed against sheriffs deputies
California police agencies violate Brown Act (open meetings)
Insane Company Wants To Send Nuke Plant Waste To New Mexico
Change Links May 2018
Worker-Owned Car Wash on Vermont Closed
GUIDE TO REBEL CITY LOS ANGELES AVAILABLE
lausd whistle blower
Help KCET and UCLA identify 60s-70s Chicano images
UCLA Luskin: Casting Youth Justice in a Different Light
Change Links April 2018
Nuclear Shutdown News March 2018
Join The Protest Rally in Glendale on April 10, 2018!
Spring 2018 National Immigrant Solidarity Network News Alert!
Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A.
Steve Mnuchin video at UCLA released
Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups
After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video
More Local News...
Sorry President Trump,Ted Cruz Texas Judicial System,is Worse Than Many Shithole Countries
The Shortwave Report 07/20/18 Listen Globally!
3 Essential Videos
The System Question as a Survival Question
“Animaniacs in Concert!” Starring Voice Legend Rob Paulsen
Nation's Largest Voting Machine Co., ESS, Admits Lying Re Having Installed Remote Control
Du pain et des jeux
Fbi joins with Facebook to remove this report
Paraphysique de martyrologie
Asian Countries:Cambodia, Vietnam, N. Korea do not permit unlawful immigration
Children Incorporated Earns 4-Star Rating on Charity Navigator
Democratic Socialists of America
Leonard Peltier Non Violent Native American Political Prisoner since 1970's
Paraphysique miscellanées de l'aggiornamento
Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Cleanup
FBI Investigated LA County Sheriff Baca,Why Not Hank Skinner's Persecution?
Updated Partial List Of Famous Vegetarians, Vegans, & Fruitarians
The Shortwave Report 07136/18 Listen Globally!
Social Policy as Social Infrastructure
Vol I: 84 Varieties Of GOP Election Fraud
Texas Can Call it An Execution,But It is A State Sponsored Murder of Hank Skinner..
June 2018 Honduras coup update
Maria Estrada doubles down on racist support
New York Women in Film & Television Announces 2018 NYWIFT Ha Phuong Scholarship Recipients
Trapps de la domination, trapps de l'aliénation
Please Work For The Defeat Of Brett Kavanaugh And Why
Change Links 2018 July posted
Transinhumanisme ( transe inhumanisme )
More Breaking News...