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 - js reader 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



Freenet/Sone comments box:

This is a comment system called babcom, which is a decentralized, anonymous, encrypted, troll-resistant, comment system that runs atop Freenet. These comments are not stored on this IMC server - they exist in the Freenet cloud, and you must be running Freenet and Sone to see the comments. Install Freenet and try it out.

Use Node:

⚙ Babcom is trying to load the comments ⚙

This textbox will disappear when the comments have been loaded.

If the box below shows an error-page, you need to install Freenet with the Sone-Plugin or set the node-path to your freenet node and click the Reload Comments button (or return).

If you see something like Invalid key: java.net.MalformedURLException: There is no @ in that URI! (Sone/search.html), you need to setup Sone and the Web of Trust

If you had Javascript enabled, you would see comments for this page instead of the Sone page of the sites author.

Note: To make a comment which isn’t a reply visible to others here, include the red link below somewhere in the comment text.

Add this link to the comment:

Local News

REMEMBERING CARLOS BULOSAN N23 6:27AM

Pressure on Orange County District Attorney to Prosecute Minors Counsel N22 5:30PM

RE-VISITING CARLOS BULOSAN N22 1:08PM

Winter 2014 National Immigrant Solidarity Network News Alert! N20 11:12PM

#UCLADivest N19 1:46AM

Ferguson verdict Monday? N16 1:42PM

TV LEGEND BOB BARKER FUNDS ‘LION’S SHARE’ OF SUCCESSFUL MISSION TO SAVE CIRCUS ANIMALS IN N13 11:30AM

“Protest blackface”: Vegan protest turns racist as white vegans pose as “people of color” N11 3:59PM

Veterans Against Foreclosures Marches in San Fernando Veterans Day Parade N11 2:46PM

Disappeared Documentary in L.A N11 2:23PM

Los Angeles Questions Oversized LAPD Response to Million Mask March N07 1:57AM

Ghosts of Wall Street Occupy Hollywood Blvd Halloween Night N06 12:48PM

The "Cleaning Up" of Venice N02 5:16PM

Activists Hold Prayer Vigil for Lexi Dillon and Jonah Rief in Orange County O31 2:32PM

New ID Verification Feature on this Site O21 1:06AM

Sierra Club endorses activists for Water Board O20 2:02PM

INDY has been hijacked or sold? to commentators ? O17 9:58AM

Columbus Day Protest, Downtown L.A. O14 4:44PM

Demonstration in Los Angeles: In Solidarity with Kobani O11 12:23PM

More Local News...

Other/Breaking News

Israeli Ruthlessness 101 N26 2:09AM

Fascism in Ukraine N25 2:07PM

NATO's Dark Side N25 11:32AM

Video: Keystone PipeLIES Exposed, 18 min N25 6:30AM

Systemic Injustice in America N25 5:11AM

Protests at fig and Washington N24 11:09PM

LA Protests Grand Jury Decision N24 9:40PM

Chris Dixon on Indymedia On Air N24 6:49PM

Hagel Sacking Suggests More War N24 1:56PM

Deadlocked Iran Nuclear Talks N24 10:20AM

Why Austerity Kills N24 6:47AM

NEW INTERVENTION BY FILIPINO WRITER IN FILIPINO N24 6:29AM

Albert Woodfox: 41 Years in Solitary Unjustly N24 2:54AM

Labor Solidarity Demands a “No” Vote on Israel Boycott N23 6:07PM

Palestinian resistance N23 4:00PM

Evidence of a new, unheralded, illegal, quasi 'Criminal Justice System' (CJS) forged by N23 1:20PM

Israel: Racist Pariah State Writ Large N23 11:43AM

Afghanistan: War Without End, Permanent US Occupation N23 6:53AM

Paraphysique des crimes contre l'humanité N23 4:45AM

Sham Bahraini Elections N23 2:57AM

Lavrov: West Wants Regime Change in Russia N22 12:07PM

Russia Bans GMOs N22 8:13AM

Biden in Ukraine N22 2:18AM

Obama's Sham Immigration Reform N21 12:22PM

fbi/cjis continue to cause killings, shootings N21 8:55AM

MH17 Coverup N21 1:51AM

NUCLEAR SHUTDOWN NEWS NOVEMBER 2014 N20 9:48PM

The Shortwave Report 11/21/14 Listen Globally! N20 4:30PM

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