imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List




IMC Network:

Original Cities

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

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Alternatives to Stagnation and Depression

by Joachim Bischoff Monday, Aug. 05, 2013 at 10:39 AM
marc1seed@yahoo.com

Politics has fought the symptoms of the great crisis with banking- and economic packages while its systemic causes remain untouched… The hardest phase of the great crisis is ahead of us, not behind us. All sectors try to safeguard their position through spending cuts...

ALTERNATIVES TO STAGNATION AND DEPRESSION



By Joachim Bischoff



[This article published on 7/22/2013 is translated abridged from the German on the Internet, http:////www.sozialismus.de.]



The 20 leading industrial- and threshold countries (G20) conjure economic growth in view of growing uncertainties in the world economy. At the G20 summit in September 2013 in St. Petersburg, there should be an action plan with a short-term emphasis on more growth and employment, the G20 financial ministers and central bankers declared.



The German economy is in an upwind, according to the German Bundesbank president Jens Weidmann. . Germany will post “an enormous profit in the spring” after a weak winter. This outlook for a slight strengthening of the German economy should certainly be taken with a grain of salt. In 2013 growth in Germany will move in a corridor from 0 to 1 percent.



The prospects for the Eurozone are even more modest. Germany remains the locomotive for the European economy. In 2013 the Eurozone will continue in recession and shrivel 0.6%. In 2014 it should rise 0.7 – thanks to Germany. Without Germany, the economy of the Eurozone would only grow 0.2%. “This is neither a recovery nor a recession,” reported Kai Carstensen from Ifo in Munich. Considered realistically, one could also say politically-conditioned smooth-talking is at work here.



The recession in the European monetary union is deeper and will last longer than predicted by many economists and most political decision-makers. There are undeniably signs pointing to a gradual improvement of the economic situation. At the earliest the economy of the Eurozone will not shrivel any more in the third quarter. For the whole year most economic experts assume a 0.7% decline of the economy in the Eurozone. This will be the second recession year in a row.



Economic weakness is a problem of southern Europe’s debt states first of all. In Greece, Portugal, Cyprus and Ireland, the downward dynamic is unbroken thanks to the ridiculous austerity policy. However the weakening of domestic demand has expanded to the core of Europe, namely to France and the Netherlands. In countries like Italy, the political contradictions increased in the last months. Hardly anything of a necessary growth policy can be seen in France, Italy or the Netherlands.



The European Central Bank holds fast to its policy unlike the US where brightened economic data moves the Federal Reserve to suggest throttling down the expansive monetary policy.



Commercial banks that deposit their surplus liquidity over night with the European Central Bank do not receive any interests today. With this measure, the financial institutes should be moved to award more credits to corporations. However commercial banks withholding credits from businesses is not only a problem in the periphery-states of the Eurozone. A withholding of investments for reasons of cost reduction occurs on the side of businesses. Infrastructure investments of the public authority declined in the last years.



The Netherlands, model student of austerity ideologues Merkel/Schauble for years, is caught by the downward dynamic. With a 0.8% decline of economic output, the country will come out the weakest this year within core Europe. The restraint of corporations in wages and investments is to blame here – as in the Euro periphery states. This led to a decline of domestic demand.



This trend is intensified by a rise in the unemployment rate, higher income taxes, falling home prices and increased indebtedness of private households. The conclusion is that the austerity policy pushed by Germany in the Eurozone intensifies the crisis constellation and remains focused short of breath on merely gaining time. More crisis measures will be adopted after the September 2013 Bundestag elections.



The Austrian economic researcher Stephan Schulmeister massively criticizes the austerity policy in the Eurozone and the one-sided interpretation of development. “We are skidding into a depression” (“Ten Steps into Depression” in Frankfurter Rundschau 7/18/2013). It is “incomprehensible” that the majority of German economists repeat what was done under the Heinrich Bruening government in the inter-war period. All chances of reviving the economy in Germany were stifled at that time through the severe austerity course.



A “catastrophic development” is manifest in southern European countries. No upswing is possible in these states through the austerity policy. Gradually the shriveling process also seizes the northern countries. The financial crisis of 2008, the following Euro-crisis and its perception as a state debt crisis are part of a long-term process of worsening economic and social outcomes under financial capitalist framing conditions.



“Politics has fought the symptoms of the great crisis with banking- and economic packages while its systemic causes remain untouched… The hardest phase of the great crisis is ahead of us, not behind us. All sectors try to safeguard their position through spending cuts amid falling stock prices, high unemployment, empty state treasuries, EU-wide austerity policy and unstable exchange rates and raw material prices: businesspersons, households, foreign countries and the state. That is fuel for a crisis over several years.”



Breaking out of the downward dynamic and an age of austerity requires a political change to a “New Deal” as a concrete alternative concept. To promote the transition to real capitalist framing conditions, the “New Deal” gives greater priority to activities in the real economy than the activities of “financial chemistry.” Simultaneously the overall strategy concentrates on those tasks that were systematically ignored in the neoliberal age. Their mastery would enormously increase real value creation and permanently improve conditions for a “good life,” according to Schulmeister.



In the middle of a grave crisis, an efficient macro-economic fiscal policy must redistribute income from the household sector to the state so private savings decline but not consumption. At the same time short-term speculative activities should be limited to the financial markets and long-term real economic activities of businesses promoted. The measures of the “New Deal” can be financed by contributions of high and the highest incomes and assets and by a higher taxation on financial transactions and financial assets.



The core problem of breaking out of a stubborn depression in the EU is inadequate social demand. Businesses do not invest enough in new plants or equipment and therefore create little wage income and jobs. The alternative to consolidation policy can be viewed as a political decision, setting investments over social consumption and getting the economy going again.



This has absolutely nothing to do with a continuation of debt policy. Interventions in distribution conditions are necessary, selective tax increases in times of economic distress. Europe needs structural reforms but not as urged by defenders of a consolidation policy. The alternative to consolidation includes financing public goods and services not adequately funded by the private capitalist sector through increased taxes on higher incomes and on profits on property and amassed mammoth assets: improved social security, education, health care and public infrastructure.



Thus the alternatives for further development are clearly outlined. One cannot assume they will play a great role in Germany with the present hierarchy of power.









CRITICISM OF ECONOMICS



By PROKLA editors



[This editorial published in June 2013 is translated from the German on the Internet.]



The financial crisis of 2008/2009 and the following economic crisis have shattered dominant economic theory and the economy. Extensive deregulated financial markets, the peak of economic efficiency according to neoclassical doctrine plunged into a deep crisis in the shortest time. A far-reaching collapse of the international financial system could only be prevented through enormous state bonds and financial injections for big banks – in complete contradiction to the market radical dogmas. The analytical helplessness of neoclassicism was so obvious in view of the crisis that many appearances of its advocates seemed embarrassing. In light of the vast economic programs with which the US, Germany and other states reacted to the financial market- and economic crisis, some observers saw a Renaissance of Keynesianism on the horizon. In some media, people are even reminded of the Marxist theory that crises are necessarily part of capitalism.



But all this has not damaged neoclassicism very much. Its reputation is somewhat tarnished. That the market creates the best of all possible worlds and that privatization of state enterprises automatically leads to more efficiency and greater prosperity cannot be defended in the public as easily as a few years ago. Heterodox, Keynesian and Marx-oriented voices have become louder. However the dominance of neoclassicism is institutionally unbroken in universities, research institutions and think tanks – both on the “supply” and on the “demand side.”



For years business administration has been in first place in the popularity of students at German universities. More young persons than ever prefer it to jurisprudence or medicine. It ranks far ahead of German studies, language and literature for young women. Managers and financial- and business advisors mostly decide for business administration because business administration promises prestigious vocations and relatively high incomes. The discipline is often denied an academic or scholarly character within the scientific community since neither theoretically nor empirically higher claims are pursued… “Customer-orientation,” “Entrepreneurship,” “corporate branding” and “guerilla-marketing” are often put on the market as panaceas or magic formulas without facing the limits and internal contradictions of those concepts. The MBA course (Master of Business Administration), the royal discipline of manager education, is internally criticized by some because complex realities are reduced to numbers enabling quick decisions without understanding the economic and social context. They are accepted uncritically by most students and teachers.



The popularity of the discipline is a symptom of a social condition that is not limited to the organization of the economy but should be applied to culture, education and the social state… Moving the actors into the center and propagating markets as the most efficient form for allocating resources are characteristics of the economics discipline. The continued dominance of neoclassicism in the last decades was also connected with a re-prioritization of economic themes.



Micro-economy has strongly gained terrain over against the macro-economy that in its Keynesian variants always stood in suspicion of abandoning the way of pure faith in the market. The micro-economy has proven to be very capable of learning by largely bidding farewell to the ideal type of homo oeconomicus, this calculating machine on two legs incessantly estimating benefits or profits. That people have limited information, depend on others in their behavior and have cultural characteristics was a common inheritance in sociology since time immemorial. However new discoveries on the conduct of actors on the financial markets are offered in behavioral economics and in specializations like behavioral finance. The insight that these actions in no way act in an instrumental rational way but are “risk adverse” under circumstances, apply a “cognitive framing” for information and often display a “herd conduct” undoubtedly represents a reality-gain.



However those explanations that reduce connections of society to “irrational” psychic dispositions of its members prove half-hearted since they fade out the structural moments of capitalist economics – the pressure exerted on many of these actors to maximize short-term profits on deregulated markets under the whip of competition. These actors undoubtedly act under uncertainty but can assume – as far as they have a certain power position like banks – that they will successfully shift the risks of incorrect calculations to weaker market actors or the state. Different possibilities of actors and social power relations should be analyzed, not only systemic pressures of orientation in profit. These dimensions are diligently faded out when a textbook world is assumed…



Reproaching dominant economics as unrealistic or out of touch is hardly new. In the 1960s Hans Albert criticized a discipline that delighted in constructing elegant models where all actors acted rationally and the economy represented a system of adjustments and recurring states of balance that can be disturbed from the outside. He described this denial of reality as “model Platonism.” Such arguments were countered with the idea – we are at the beginning of a long promising research way – an idea repeated rightfully four decades and several crises later.



A criticism referring substantively to neoclassicism is stronger than the merely formal criticism of model Platonism. These are on principle two very different starting points. On one side a criticism of basic neoclassical categories can be oriented in the Marxist criticism of political economy that shows neoclassicism cannot fulfill its own claims. The usual abstractions out of touch with reality are not enough. One must go further and presuppose a “one-commodity-economy” (an economy in which only a single kind of capital goods is produced). With a “two-commodity-economy,” popular doctrines prove wrong like the wage rate and the extent of employment which are in an inverse relation. The employment level can only be raised when wages (or non-wage costs) fall…



The opposition of orthodox and heterodox recalls historical struggles of the Catholic Church against deviationists and heretics. Even if the stake is not common nowadays for excluding dissenters, the methods of the orthodox mainstream prove extremely effective in preventing pluralism and open debates by simply ignoring the heterodox, particularly by not citing them in scholarly journals or appointing them to professorships. An intensified effect of “methodical monism” appears in the popular journal Rankings in the framework of the dominant paradigm. Katharina Mader and Jana Schuldheiss emphasize that feminist economy has enormous variations and is not a closed system…



The dominance of neoclassicism is important for the real economic praxis of the state and businesses and not only for academic life… The triumphant procession of “quantitative risk measuring models” was promoted by the discipline, given Nobel Prizes and anchored institutionally by authorities.

RELATED LINKS

Flassbeck, Heiner, “The Incredible Lightness of Financial Markets,” July 2013

http://www.vidc.org/index.php?id=899#c1722



Konicz, Thomasz. “Addicted to Liquidity Injections.” July 2013

http://portland.indymedia.org/en/2013/07/424125.shtml



Konicz, Thomasz, “The Crisis Explained,” December 23, 2011

http://portland.indymedia.org/en/2012/01/413591.shtml



Schulmeister, Stephan, “From Real Capitalism to Finance Capitalism, 11pp, May 22, 2013

http://stephan.schulmeister.wifo.ac.at/fileadmin/homepage_schulmeister/files/Navigation_Leipzig_22_06_13_ohne_verk.pdf

Report this post as:

Local News

GUIDE TO REBEL CITY LOS ANGELES AVAILABLE A12 5:39PM

lausd whistle blower A10 11:58PM

Website Upgrade A10 3:02AM

Help KCET and UCLA identify 60s-70s Chicano images A04 1:02PM

UCLA Luskin: Casting Youth Justice in a Different Light A02 11:58AM

Change Links April 2018 A01 11:27AM

Nuclear Shutdown News March 2018 M31 6:57PM

Join The Protest Rally in Glendale on April 10, 2018! M29 7:00PM

Join The Protest Rally in Glendale on April 10, 2018! M29 6:38PM

Spring 2018 National Immigrant Solidarity Network News Alert! M19 2:02PM

Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A. M16 5:40PM

Steve Mnuchin video at UCLA released M15 12:34AM

Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups M06 12:10PM

After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video M02 11:44AM

Resolution of the Rent Strike in Boyle Heights M01 6:28PM

What Big Brother Knows About You and What You Can Do About It M01 3:30PM

Step Up As LAPD Chief Charlie Beck Steps Down F14 2:44PM

Our House Grief Support Center Hosts 9th Annual Run For Hope, April 29 F13 12:51PM

Don’t let this LA County Probation Department overhaul proposal sit on the shelf F13 11:04AM

Echo Park Residents Sue LA Over Controversial Development F12 8:51AM

Former Signal Hill police officer pleads guilty in road-rage incident in Irvine F09 10:25PM

Calif. Police Accused of 'Collusion' With Neo-Nazis After Release of Court Documents F09 7:14PM

Center for the Study of Political Graphics exhibit on Police Abuse posters F07 9:50AM

City Agrees to Settle Lawsuit Claiming Pasadena Police Officer Had His Sister Falsely Arre F04 3:17PM

Professor's Study Highlights Health Risks of Urban Oil Drilling F04 12:42PM

Claims paid involving Pasadena Police Department 2014 to present F04 10:52AM

Pasadenans - get your license plate reader records from police F03 11:11PM

LA Times Homicide Report F03 1:57PM

More Local News...

Other/Breaking News

What does the Quran Say About Islamic Dress?? A21 4:15PM

Biodiversité ou la nature privatisée A20 11:22AM

The Market is a Universal Totalitarian Religion A20 7:14AM

Book Available about Hispanics and US Civil War by National Park Service A19 5:52PM

The Shortwave Report 04/20/18 Listen Globally! A19 4:01PM

The Republican 'Prolife' Party Is the Party of War, Execution, and Bear Cub Murder A19 11:48AM

Neurogenèse involutive A18 9:21AM

Paraphysique de la dictature étatique A16 10:13AM

Book Review: "The New Bonapartists" A16 3:45AM

The West Must Take the First Steps to Russia A14 12:25PM

Théorie générale de la révolution ou hommage à feu Mikhaïl Bakounine A14 3:30AM

The Shortwave Report 04/13/18 Listen Globally! A12 3:50PM

“Lost in a Dream” Singing Competition Winner to Be Chosen on April 15 for ,000 Prize! A12 3:48PM

The World Dependent on Central Banks A12 4:43AM

Ohio Governor Race: Dennis Kucinich & Richard Cordray Run Against Mike DeWine A11 9:40PM

March 2018 Honduras Coup Again Update A10 10:52PM

Apologie du zadisme insurrectionnel A10 3:33PM

ICE contract with license plate reader company A10 1:14PM

Palimpseste sisyphéen A09 11:23PM

Black Portraiture(S) IV: The Color of Silence...Cuba No...Cambridge Yes A09 5:32AM

Prohibiting Micro-Second Betting on the Exchanges A09 4:18AM

Prosecutors treat Muslims harsher than non-Muslims for the same crimes A08 10:33PM

Amy Goodman interview on cell phone safety A08 10:29PM

Mesa, Arizona police officer kills unarmed white man A08 9:50PM

Israeli leaders should be prosecuted for war crimes A08 9:48PM

Paraphysique de l'autorité A08 12:11AM

Two Podcasts on fbi corruption A06 10:13PM

Fbi assassins assault & try to kill DAVID ATKINS A06 7:29PM

More Breaking News...
© 2000-2018 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