imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Subscribe Calendar Publish RSS
Tell the NSA: StopWatching.US

Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

CopWatch LA

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List





IMC Network: 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
printable version - json version - email this article - view hidden posts - tags and related articles
link:

Three Approaches to the Economic Crisis

by Patrick Schreiner Friday, Jan. 25, 2013 at 5:28 AM
marc1seed@yahoo.com

Before 1980, wages, productivity, investments and production pushed one another and ensured general prosperity. After 1980 wages were dropped as a driving force of economic demand. Demand gaps were filled by consumer credits.

THREE APPROACHES TO THE ECONOMIC CRISIS:
BEYOND FINANCIAL MARKET REGULATION

By Patrick Schreiner

[This article published July 4, 2012 is translated from the German on the Internet, http://www.annotazioni.de/post/636.]

The following text attempts to order the current discussions on the causes and possible ways out of the financial crisis. Three orientations of political “crisis thinking” can be distinguished. Two hold to the neoliberal capitalism model. This model must be questioned and replaced by another model that emphasizes wage-based demand for economic policy and solidarity for social policy.

Thomas Palley, senior economic advisor of the AFL-CIO, recently published a text on the financial crisis in the Online magazine “Gegenblende” of the German DGB union [http://www.gegenblende.de/15-2012/]/]. He distinguished three different ways of looking at the crisis:

1. A radical-neoliberal “state failure” led to too many, not too few state interventions, it is argued. From this perspective, the crisis can only be overcome through more market and less state.

2. A moderate neoliberal “market failure” argument claims the crisis in the first place is a consequence of inadequate regulation of the financial markets. From this perspective, the solution consists mainly in a regulation of the financial markets.



3. Finally a third argumentation, Palley explains, refers the crisis back more fundamentally to the neoliberal model of the economy and society carried out since 1980. Its main elements are

1. Fueling international competition between employees of different countries (through free trade agreements and capital mobility),

2. Weakening employees and their unions (for example by reducing social benefits, permanent mass unemployment and flexibilization of the labor market,


3. And as a consequence the politically desired and consciously executed freezing of wages behind the development of productivity.

With this model, economic policy was radically turned around. Before 1980, Palley argues, wages, productivity, investments and production pushed one another and ensured general prosperity. High wages made possible profits, extensive investments and growth. But after 1980 wages were dropped as a driving force of economic demand. The financial sector should compensate for the arising “gaps.”

In the United States, deregulations, financial innovations and speculation enabled the financial sector to fill these demand gaps through consumer credits and enlivened asset price inflation. US consumers again filled the global demand gaps.

Empirical data supports this analysis. The increase in globally-invested assets greatly disproportional to the real economy, the exploding social inequality, the general collapse of wage rates and enormously soaring public indebtedness not only in the US could serve as examples.

If one follows this analysis, the deregulation of the financial markets was only a logical element of the neoliberal model, not the main cause of the crisis. Therefore a regulation of the financial markets is not enough to permanently end the crisis. A complete turning away from neoliberalism is necessary. The question how future economic demand can be generated is raised as the more urgently. Finally there will be no enormous spirals of private indebtedness and stock or real estate bubbles any more – in the foreseeable future – and hopefully for the long run – that could create artificial demand until bursting some time or other.

On this background, the question how future demand can be generated should be the crucial criterion in judging political reactions to the crisis. While regulation of the financial markets is right and important – a stricter bank monitoring, a financial transactions tax and higher capital holding requirements – the demand problems will not be solved. Whoever stops with these beginnings persists in the neoliberal model. Palley’s descriptions are correct: the boundary between reasonable and unreasonable policy does not run between “moderate-neoliberal” and “hardcore-neoliberal” but beyond both of them.

Withdrawal from the neoliberal model requires a policy that makes wages the crucial driving force of economic demand again. This also necessitates replacing the “activating” social state with a solidarian social state, regulating the labor market again, strengthening the rights of employees and unions, radically reducing social inequality, strictly controlling capital and setting minimum social standards on a high level at least across Europe. Genuine growth impulses through higher wages, extensive investment programs (with emphasis on future technologies) and a spending policy of the state that does justice to the economy are measures that could be started in the short term.

On the other hand, other actions do not reflect a withdrawal from neoliberalism: debt brakes and fiscal pacts, cuts of public budgets, “structural reforms” in southern Europe and “fighting” youth unemployment through more mobility are all in a terrible continuity to neoliberalism.

RELATED LINKS:

Christian Zeller, “Cancellation of Illegitimate Debts Instead of Bailout Umbrellas for Financiers,” 2012
http://portland.indymedia.org/en/2013/01/421458.shtml
http://www.therealnews.com
http://www.buzzflash.com
http://www.progressive-economics.ca
http://www.onthecommons.org
http://www.freembtranslations.net

Report this post as:
Share on: Twitter, Facebook, Google+

add your comments


Local News

Obama at LA Trade Tech J23 3:23PM

Los Angeles Joins World Wide Protest Against Israeli Aggression J22 6:33PM

Los Angeles Joins World Wide Protest Against Israeli Aggression J22 5:48PM

Los Angeles Joins World Wide Protest Against Israeli Aggression J22 5:28PM

Protest Israeli Shelling of Gaza J21 1:58AM

#SaveTheInternet Rally J20 11:24AM

PACIFICA is shify-ing more J18 8:55PM

Radical Women Study Group J16 4:43PM

KIDS REPLANT WILSHIRE FRUIT TREES UPROOTED BY VANDALS J16 2:34PM

Emails Needed by Thursday, July 17 to Save the South Central Farm (Again) J15 4:40PM

Is AFT Pres Weingarten On The Take? J12 7:45AM

LA Living in Vehicle Law Found UnConstitutional J11 12:22PM

KPFK News covers the Che Cafe struggle J10 9:33PM

Public Comment on South Central Farm Site J07 10:44PM

Successful Protest at new Burbank Hobby Lobby on 4th J06 5:17PM

Protesters Violently Arrested in Murietta J05 12:44AM

Gallery Opening Highlights Journalist’s Creativity, Insights, and Passions J03 11:52AM

Indymedia On Air - Che Cafe show J02 10:27AM

Save the Che: Letter from Zack de la Rocha J29 8:47PM

Political Thriller Citizen Koch Premieres in Los Angeles J28 2:35AM

Veteran and Families of Military hold Press Conference J18 7:36AM

Furious Homeowners Occupy Lobby of Fannie Mae in Pasadena J16 4:15AM

Change Links Revival J12 12:09PM

Election Day with Occupy Los Angeles: Know Your Rights Juror Education Rally J05 9:39PM

United We Stand Festival Ignites a Wave of Action for Indy Journalists and Active Citizens J05 7:36PM

San Pedro Born Activist Yuri Kochiyama Dies J02 12:04PM

More Local News...

Other/Breaking News

MDRC's Rent Reform Assault: Section 8 tenants vs. affordable housing industry J24 12:24AM

Come for the education, Stay for the fun at the OC Health & Wellness Fair J23 10:59PM

Philippine president signs law requiring tobacco companies to put graphic health warnings J23 3:55AM

Rockets found in Gaza school J22 10:57PM

Statement on the Gaza Genocide J22 8:32PM

Capitalism and War: Pope Francis J22 4:18AM

Geekouts Link's for June and July 2014 J22 1:14AM

ADI holds Week of Action Against Circus Suffering J21 11:41AM

phantom protests J21 7:35AM

Précis de la tyrannie ou les 64 bourgeoisies J21 3:32AM

The Abiding Economics of John Kenneth Galbraith J19 3:19PM

The Word J18 1:12PM

Burn Cut Poison: Toxic Trillion Dollar Cancer Industrial Complex Of Radiation, Surgery, Ch J18 10:17AM

Abrégé de déictique J18 2:04AM

The Shortwave Report 07/18/14 Listen Globally! J17 2:54PM

carta a mi hija J17 1:40PM

SANTA MONICA ACTRESS TANNA FREDERICK TO VIETNAM TO INSTALL WATER FILTERS J17 11:21AM

Nationwide Air Conditioning and Heating Company Hiring in Southern California J17 9:18AM

Ariz. law enforcement: Marijuana shouldn't be legalized J16 5:27PM

Philippines: 5 Makabayan bloc legislators got P481M pork barrel J16 1:31AM

Lauren Kuby - Harry Mitchell - Tempe City Council J15 1:48PM

The Average Vegan Weighs 23 Lbs Less Than The Average Nonvegetarian J15 9:08AM

TTIP Undermines the Constitutional State J15 7:03AM

5,000 Show up in los Angeles Rally J13 7:40PM

Andrew Myers wants dispensaries to have monopoly on growing marijuana??? J13 8:22AM

Protest against Jewish terrorism & genocide in Palestine J12 7:28AM

israel training Georgia police J12 7:22AM

Paraphysique du capital J11 2:26AM

More Breaking News...
© 2000-2003 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