imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Subscribe Calendar Publish RSS
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 - js reader version - email this article - view hidden posts - tags and related articles

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
www.therealnews.com
www.buzzflash.com
www.progressive-economics.ca
www.onthecommons.org
www.freembtranslations.net

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

add your comments


Local News

May Day March in Riverside M02 10:35PM

Nuclear Shutdown News: April 2017 M02 4:38PM

Jewish “Defense” League: Nazis in Skull-caps A07 11:13AM

Nuke Shutdown News 3/17 A01 4:13PM

RELATIONS STILL STRAINED BETWEEN SOUTH LOS ANGELES RESIDENTS AND THE POLICE M22 3:22PM

Elect a Green to Congress in Los Angeles M15 2:18AM

Prop. H Activists March on Hollywood to House and Help the Homeless M01 1:46PM

Prop. H Activists March on Hollywood to House and Help the Homeless M01 1:09PM

Prop. H Activists March on Hollywood to House and Help the Homeless M01 12:19PM

24TH ANNUAL LOS ANGELES WOMEN’S THEATRE FESTIVAL HONORS COMPOSER MEGAN CAVALLARI ON MARCH F24 2:40PM

Activists Mark 150 Years Since Chimney Rock Massacre F21 7:00PM

Indivisible local events F16 4:07PM

Help Wanted: How You Can Act Locally To Stymie Trump’s Agenda F16 11:24AM

RACE RELAY - race relations dialogue F16 7:01AM

LA County Greens Oppose S F09 8:52PM

Our Revolution L.A Organizing Meeting F08 12:23AM

First We Marched. Now We Huddle F06 10:54PM

Indigenous, Sacred Lands Disrespected at L.A. Women's March J24 1:52PM

Massive Women's March Los Angeles Tells President Donald Where To Go J23 8:22PM

Massive Women's March Los Angeles Tells President Donald Where To Go J23 8:00PM

Massive Women's March Los Angeles Tells President Donald Where To Go J23 7:42PM

More Local News...

Other/Breaking News

Punishing the Poor. The Neoliberal Government of Social Insecurity M24 6:16PM

Israeli Jews Say, It’s Our Jerusalem! M23 7:32PM

UN Forum Focuses on Financing for Development Goals M23 9:33AM

Learning from History: Resistance in the 1850s and Today M22 12:27PM

“Hegemony How-To”: Rethinking Activism and Embracing Power M22 12:24PM

Neoliberal Austerity Leads to Deeper Crisis M22 6:14AM

Violence abiotique de l'économie M21 11:42PM

Dr. Maryse Narcisse of Haiti Visits Southern California M20 5:55PM

The Shortwave Report 05/19/17 Listen Globally! M18 5:00PM

STO Service du Travail Obligatoire M18 6:45AM

Puerto Rico Religious Leaders Write Judge as Bankruptcy Process Begins M17 6:54AM

Puerto Rico Bankruptcy Process Begins M16 3:12PM

This Week in Palestine, May 5, 2017 M16 10:47AM

Paying More for Being Poor — Bias and Disparity in California’s Traffic Court System M16 10:39AM

Oakland Committee Voting On Ending Secretive Surveillance M16 10:24AM

WAR, IMPERIALISM, AND SYRIA: MARXIST-HUMANISTS RESPOND M15 8:13PM

Zoopharmacognosie ou les animaux humains et non humains M15 10:39AM

Become a Solidarity Person M15 4:20AM

USA in peril M14 2:21PM

New pamphlet: Marxism and Women's Liberation M14 10:46AM

The Moorish rule in Spain/How the Moors brought civilization to Europe M14 9:00AM

April 2017 Honduras coup update M13 6:29AM

Consumer Bureau Escapes Congress Action to Remove Prepaid Rule M12 4:12PM

Puerto Ricans Gather at Diaspora Summit as Island Begins Bankruptcy Process M12 8:14AM

A Generation is Lost M12 4:18AM

The Shortwave Report 05/12/17 Listen Globally! M11 4:51PM

Paraphysique de l'anomie M11 6:08AM

Police shootings 2017 database - Washington Post M10 4:59PM

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