3 cheers for the recovery

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Fred
3 cheers for the recovery
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The stock markets are soaring: the Dow is at record levels and the FTSE almost back where it was in 2001 before the blip. Three cheers for the bourgeoisie, they've put everything right again. The crisis is over! Ugh! What crisis? 

In the UK the Chancellor of the Exchequer is happy and cracked a smile. He says there's jobs for everyone, and if you want to work hard you can.  It's the shirkers and idle buggers who dont like hard work who cause all the trouble.  He even says that those who work really hard will be rewarded and will almost be able to earn enough to live on.  Almost. In case you cant work it out for yourself, you can do this by taking on a number of part-time jobs. Those who complain about the difficulties involved in juggling the timing of more than two part-time jobs a day, should  stop whining and "get on their bikes" as recommended by the late great prime minister Margaret Thatcher, now an Oscar Winning film star. Another government big noise Ian Duncan Smith took the trouble to point out that he can live on £53 a week. So there! You can do this if you stop eating and feeding the kids.  You just need initiative like Ian himself, and try and make a personal effort, and stop whinging like lousy poms, and remember the war time spirit and V for Victory. Did Winston Churchill ever complain?  Of course he didn't! 

It's the idle rich unemployed who cause all the trouble in the UK, living like lords on handouts and the non-stop benefits of the Welfare State. It's this group of spongers and lick-spitlles who are leading those who want to work hard for nothing astray. Well, the Chancellor can tell them their day is over!  And they'll have to learn to live in a house with no spare bedroom too. Does the Chancellor have spare bedrooms? Well of course he does. But then he works hard and deserves every penny and every spare room he can get. 

In the USA, with the soaring Dow, prospects are now so good  that the President can devote all his time to guns and the gun lobby. Gone are the economic woes. Even N.Korea isn't a problem. Now that the good times are back we can blow them out of the water anytime we like. Or just drone them. 

Even S.East Asia, that zone of eternal peace, poverty and sunshine, is undergoing a massive outburst of growth and prosperity as the crisis recedes (what crisis was that?) and those who never ever had in their lives two baht or three rupiah to rub together now find they have wow! eight or nine.  New buildings jump up like energized mushrooms. And locals who never left the village before, can afford a long weekend in Bali, Singapore or Hua Hin. The prospect of prosperity for ever spreads out like a never ending carpet. Such joy; such happiness. Capitalism has broken open the doors to paradise itself. Or so it seems. 

So the recovery is everywhere, and everyone is happy, or so the news programs would have us think. Even Nelson Mandela is getting better again.  Even the Queen recovered. Even the bad weather will improve at some point won't it? 

 

So what do the rising markets really indicate. Is capitalism going to recover again for a few years. Can the bourgeoisie really get away with it again? Or is it all a dream  that ends in broken shards? 

 

Fred
So, what would the British

So, what would the British Chancellor make of this? 

 

Quote:
In September 2012 legislation came into force that made squatting in the UK a criminal offence. At the end of the month the first person was convicted under the new legislation and sentenced to 12 weeks in prison. He had come from Plymouth to London looking for work and had occupied a flat owned by a housing association.
 (from ICC article on Housing) 

 

 

mhou
I may be wrong, but I don't

I may be wrong, but I don't know of any time in history when significant numbers of entire nation-states had to be propped up by (more) debt, and promises on future profits, or a more 'unhealthy' capitalism.

The structural crisis of capitalism (apparent since 1968, but building since the recession of 1964 and the fall in the rate of profit), made possible by its transition into decadence, is forcing capital into precarious investment channels (the tremendous growth in the FIRE sector), creating an environment perfect for pump-primed asset bubbles (Savings & Loan, Junk Bonds, dot.com, oil crises, mortgage backed securities-derivatives). It now has to accelerate printing currency and bonds (and swapping them back and forth) to keep the weakest links afloat, or else the whole thing falls apart.

The surface manifestations of 'prosperity' are truly a spectacle- world capital is in a tenuous position, with horrifying potential consequences in every direction.

Fred
A friend emailed me:  Quote:

A friend emailed me:  

Quote:
Have you ever watched that Beacon of Capitalism ... Bloomberg News? They had an economist on yesterday evening predicting that the rising stock markets in sick economies where overall production has not recovered mean that within a year the bubble is gonna burst into a bigger crisis than the one everyone has decided is over. And this time banks and countries will fail because there actually is nothing more than good feelings fueling this bubble. 

The interviewer could not believe this guy could be gloomy about the figures and argued with him a lot. Looks like the worst is yet to come. He made the point that this bubble is inflated with the gases of 'quantitative easing', which is merely a bandaid.

  What is quantative easing I wondered?  Is it some fancy new term for the bourgeoisie's propensity for farting and hot air, which is about all that's left that they can do. Apart from being disposed of by the revolutionary proletariat that is.  Oh! Happy Day Come Soon! 
mhou
QE is money injected into the

QE is money injected into the economy by central banks. The ICC have an excellent article on the various bailouts (that goes into detail on the numerous uses of quantative easing since the debt crisis).

https://en.internationalism.org/ir/144/economic-crisis

jk1921
Hitting the Nail on the Head

Fred wrote:

 What is quantative easing I wondered?  Is it some fancy new term for the bourgeoisie's propensity for farting and hot air.

 

I think you pretty much nailed it, Fred.

baboon
Quantatative Easing

The Bank of Japan announced this morning another $1.4 trillion in QE to be injected into its economy over the coming period. This is after the vast amounts injected into this economy - to no avail whatsover - over the last 10 or 12 years. The Japanese stock market has soared and the yen has fallen against other currencies - which is one of the intended consequences. This is an expression of the currency wars, ie, the "competitive devaluations" of each for themself, which are breaking out between the major economies. It also demonstrates the hopeless cleft stick that capitalism is engaged in between austerity and "recovery".

jk1921
Healthy and Unhealthy Capital

mhou wrote:

I may be wrong, but I don't know of any time in history when significant numbers of entire nation-states had to be propped up by (more) debt, and promises on future profits, or a more 'unhealthy' capitalism.

All of this raises, again, the function of debt for capital and its role in decadence; but beyond that, I think mhou's post raises interesting questions of what we mean when we say capitalism is "healthy" or "unhealthy"? What does it mean for captialism to be be "healthy"? A high rate of profit? A high proportion of the economy devoted to productive investment over speculative activities? More to the point, are the categories we use to make these characterizations of health or lack thereof economic or are they moral/political? Is there a certain nostalgia for high Fordism embedded in the notion of neoliberal capital as unhealthy? Unhealthy for who? The bourgeoisie? The proletariat? The system as a whole?

There was an interesting piece on the news today about the American labour force--25 percent of all jobs now pay below the poverty rate, while 33 percent of all jobs pay below $33,000 a year. This paints a very bleak picture for the standard of living of the working class. Its a far cry from the days when an auto worker in Michigan could afford a lake front cottage and a boat on his union salary--but what does it really say about the overall "health" of capital? The bourgeoisie are raking it in, the banks and big corporations continue to make profits. Why does it matter if these profits are made through FIRE rather than producing tangible consumer goods that fulfill "real" needs? What is the economic import of these developments at the level of the system as a whole over and above an attack on the working class's standard of living? What level of analysis do we need to grasp it?

 

mhou
I too would like to see a

I too would like to see a strong effort at deconstructing what debt means in decadent capitalism (particularly with an eye for contemporary circumstances). Though I do think the ICC's analysis through the International Review have been very helpful on that topic.

Edit: Alf provided this link about decadence and debt

https://en.internationalism.org/ir/141/post-war-boom-part-5

That second paragraph suggests the value-form debates. That's a big can of worms.

baboon
my mistake

The Bank of Japan's QE is  1.4 billion yen, not dollars as I said above. At about one hundred yen to the dollar it's still a tidy number.

baboon
silly sausage

(Almost) unbelievably the figure confirmed in The Observer today is 1.4 trillion dollars.

jk1921
Develop

mhou wrote:

That second paragraph suggests the value-form debates. That's a big can of worms.

mhou, could you develop this a bit more when you have time?

mhou
Quote:This paints a very

Quote:
This paints a very bleak picture for the standard of living of the working class. Its a far cry from the days when an auto worker in Michigan could afford a lake front cottage and a boat on his union salary--but what does it really say about the overall "health" of capital? The bourgeoisie are raking it in, the banks and big corporations continue to make profits. Why does it matter if these profits are made through FIRE rather than producing tangible consumer goods that fulfill "real" needs? What is the economic import of these developments at the level of the system as a whole over and above an attack on the working class's standard of living? What level of analysis do we need to grasp it?
.

I'm re-reading Camatte's "Capital & Community", which analyzes (with extensive quotes from Marx's Grundrisse and Results of the Immediate Process of Production) some of those questions; the book is cheap and the online version is in many ways better than the printed text due to missed grammar and syntax mistakes.

Quote:
Capital's products must circulate to realize their values. Will the realization be complete?

"The question that interests us here is this: Does not a moment of value determination enter in independently of labor, not arising directly from it, but originating in circulation itself?" - Marx, Grundrisse, p.519

To reply to this question, evidently it is necessary to have recourse to the theory of production prices which shows how there can be a variation in value in the course of the circulation process.

p.74

Quote:
The commodity becomes money, and hence autonomous exchange-value. To explain autonomization, exchange-value must be analyzed in greater detail.

"As previously we took the commodity as our starting point, we now take exchange-value as such- its autonomization is the result of the circulation process we find that:

1) Exchange-value exists doubly, as commodity and as money; the latter appears as its adequate form but in the commodity (as long as it remains a commodity) the money is not lost but exists as its price. The existence of exchange-value is thus doubled once as use-values, then in money. But both forms may be exchanged and, through mere exchange, the value does not diminish.

2) For money to preserve itself as money, it must, just as it appears as a precipitate and result of the circulation process, be able to re-enter it; i.e. not to become, in circulation, mere means of circulation which disappear in commodity form in exchange for mere use-value" (Grundrisse)"

Camatte puts it better than I could (trust me, I deleted what I wrote in this post twice already to get to this point):

"In other words, circulation must in some way contain a productive phase, in the course of which valorization takes place, i.e. the growth of value"

Edit:

Internationalist Perspective have several articles related to the value-form (and associated theories). I think Camatte's point in that last quote is that capitalism is unable to exist by relying on state-capitalism, monetary policies, etc in tandem with an inflated FIRE sector and financialization as a core or growing/very large element of the 'total capital'. This article by IP brings up something related to this- artificial scarcity (expelling proletarians from the value production process at the immediate point of production, a high organic composition of capital, and still have good 'growth' without having to expand value production in the factories and workshops geographically):

Quote:
Whether today’s global overcapacity is seen as cause or effect of the economic crisis, one thing is certain: it isn’t easy to make a profit in a world awash in overproduction. Capitalism is born in conditions of scarcity and is unable to function outside of them. So it seems logical that the crisis creates a tendency to restore these conditions artificially. But how does this affect the chances of the global economy to find a way out of its present predicament?

http://internationalist-perspective.org/IP/ip-archive/ip_54_scarcity.html

 

Demogorgon
The mean-average annual GDP

The mean-average annual GDP growth rates for both the UK and the US since 2007 don't even make it to 0.5%. Lower even than Japan during the "lost decade".

petey
When the latest bubble pops...

Fred wrote:

A friend emailed me:  

Quote:
Have you ever watched that Beacon of Capitalism ... Bloomberg News? They had an economist on yesterday evening predicting that the rising stock markets in sick economies where overall production has not recovered mean that within a year the bubble is gonna burst into a bigger crisis than the one everyone has decided is over. And this time banks and countries will fail because there actually is nothing more than good feelings fueling this bubble. 

The interviewer could not believe this guy could be gloomy about the figures and argued with him a lot. Looks like the worst is yet to come. He made the point that this bubble is inflated with the gases of 'quantitative easing', which is merely a bandaid.

  

perhaps that was david stockman?

Sundown in America

https://www.nytimes.com/2013/03/31/opinion/sunday/sundown-in-america.html?pagewanted=all

Fred
Hi Petey, you could be

Hi Petey, you could be right. 

David Stockman wrote:
 GREENWICH, Conn.

 The Dow Jones and Standard & Poor’s 500 indexes reached record highs on Thursday, having completely erased the losses since the stock market’s last peak, in 2007. But instead of cheering, we should be very afraid.

  I don't know why we should be afraid, do you?  Stockman goes on to ruminate that the end may be near at hand - sort of. Excellent. I'll drink to that.  So three cheers for the collapse. Much more fun than the Death of the Witch! 
jk1921
Stockman is pretty close to

Stockman is pretty close to the Ron/Rand Pauls of the world. He was ridiculed as the "man who cried wolf" one too many times by Fareed Zakaria this morning; Only the wolf had never quite come, the bond markets continue to loan the U.S. state money at historically low rates, etc. One has to wonder why the bourgeois media has developed such an interest in him today? I think originally the left found him an intrigruing figure--a former Reganite, who rejects contemporary Republican orthodoxy. However, what they didn't realize is that he has increasingly gone in for all types of nihlist fringe ideas.