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

Violence Against Poor In Venice A29 12:59PM

California Safe Schools Honors 11 Year Old Daniel Randall A25 2:25PM

NPR's Marketplace: The Voice of Loanshark Capitalism A19 4:08PM

Assemblywoman Melissa Melendez, Pandering to the Corporate Whores of the Storage Industry A09 5:03PM

Lartiste Maestro iTunes télécharger de la musique gratuit et Légalement 2016 A08 3:20PM

Spring 2016 National Immigrant Solidarity Network Monthly News Alert! A05 2:14PM

KPFK and Pacifica, more doings, reposted here A04 4:18PM

Liberated Political Prisoner Sekou Odinga Speaks Out M11 9:39AM

Solidarity With Anaheim M08 10:16AM

Tribune Company Stock Bought By LAPD Union To Silence Criticism Of Police M02 8:01AM

KPFK as Pacifica may be in legal jeopardy, again... M01 2:43PM

Anaheim Anti-KKK Fund Drive F29 5:04PM

March For Bernie 2, Pasadena and Los Angeles F28 8:16PM

Innovative Approach To Fighting The Droughts F16 11:56AM

International Day of Solidarity with Leonard Peltier F12 5:51PM

January 2016 Honduras Coup update F12 4:42PM

More Local News...

Other/Breaking News

Interior Designer Dorothy Willetts: Where Art, Soul, And Space Meet M24 5:19PM

Swami in a Strange Land M24 5:07PM

Benevolence vs. Evil M24 11:42AM

Duterte offers cabinet posts to Maoist Communist Party of the Philippines M24 4:26AM

Who Owns the Sky? The Climate in the Globalization Trap M24 4:02AM

Gaza to overtake Saudi Arabia with executions per capita M23 10:46PM

Bernie Sanders in Lincoln Heights M23 8:23PM

Fbi and its severely misguided Director, murderous agents and insane operatives M23 7:41PM

30 years passed in an instant. Ubi Sunt? M22 1:48PM

Hillary Clinton Flunks Animal Rights And Environmental Issues M21 12:52PM

Medical Update M21 10:36AM

USPI Corrupted by fbi Assassins , II M21 7:34AM

Propaganda Countdown to WWIII: Armenians in the Crosshairs M21 6:28AM

Clash Royale Hack - How To Get Unlimited Gems iOS - Android M20 2:02PM

Message for YOU! M20 10:32AM

Paraphysique du chômage M20 10:21AM

The Language of Neoliberalism M20 5:51AM

The Shortwave Report 05/20/16 Listen Globally! M19 4:15PM

L'an 01 M18 10:58PM

The fbi's Future Crime Project M18 8:51AM

Los Angeles Sit-In to Fight Voter Suppression M18 4:28AM

The Case for Public Housing M17 7:53PM

A summary of fbi's crimes against me and the American people M17 5:53PM

Irony of our police state M17 1:34PM

The American work ethic M17 6:21AM

Gaslighting, The Devil's Pitchfork (and often the fbi's preferred weapon) M17 6:11AM

Amok ou la sanie culturelle M16 11:25PM

Fbi continues its practice of the dark art of gaslighting on me M16 7:38PM

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