#USA Economic Growth
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i am sorry cant be silent but ru*ssians in karlovy vary is such a mind blowing thing to me. thinkin bout this all evening
@demonzriti u just shouldnt have told me that. now i wont sleep bc of this
#i just thought like yeh yeh brighton beach in usa thats the place where new russians settled mostly#its just like i can take such a good guess which exact type of ppl moved to karlovy vary#probly a bit more educated & smarter than typical new rus-s but still supposed to be ppl who#made a shitload of money either on vouchers either while economic growth in 00s#if “a bit more educated” then its the 2nd option........... but its still ppl who are far away from considering good#& probly ppl who didnt like usa which is interesting. they choose to move into the post sov country & start a business there#interesting interesting...... like means they weren't that much enamoured w american dream & probly more conservative and more fond of ussr#and its like another absolutely horrible skin of post sov rus-s. if ones who moved to usa like wanted to get freedom etc these i think#just thought that ah its just our place <- horrible horrible stuff#so they didnt search for a complete freedom etc as many others did. like i never thought bout conservative kind of such ppl#bc i mean it isnt logically obvious. if ure conservative then why u even go into business in the first place#mind blowing completely mind blowing#so many absurd things here
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Fed’s Powell marks patient approach after rate cut
The Federal Reserve cut interest rates by a quarter percentage point amid what could be an economic challenge when President-elect Donald Trump takes office next year, according to Reuters.
Fed Chair Jerome Powell said the outcome of Tuesday’s presidential election would not have a “near-term” impact on US monetary policy. Powell added that the Fed will continue to evaluate the data to account for inflation, which slowed markedly last year and is approaching the US central bank’s 2% target.
It’s a process that takes some time. It’s all of the policy changes that are happening. What’s the net effect? The overall effect on the economy at a given time? That’s a process … we go through all the time with every administration.
However, the exact destination remains unknown and will be even harder to determine if fiscal and tax policy changes as quickly as Trump has promised. Powell, who was appointed by Trump and then clashed with him during the Republican president’s first term, will now oversee monetary policy in the first critical months of the new administration.
So far, inflation and interest rates have fallen in line with the Fed’s forecast, which believes price pressures continue to ease amid continued economic growth and the labour market.
Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management, did not rule out the possibility of another quarter per cent rate cut at the Fed’s final meeting of the year on December 17-18.
The easy cuts have been made, and maybe December won’t be too contentious either. Thereafter, I imagine the Fed is asking the same questions as investors – to what extent and when will the incoming Trump administration implement its campaign policy proposals?
Powell said the economic outlook was good at this point and the Fed hoped it would remain that way.
This further recalibration of our policy stance will help maintain the strength of the economy and the labor market, and will continue to enable further progress on inflation as we move toward a more neutral stance over time.
The Fed’s policy statement noted that risks to the labour market and inflation are “roughly in balance,” repeating language from the statement issued after the September 17-18 meeting.
Powell stated that the change in wording did not mean that inflation had become sustainable. The Fed, he said, had always expected progress to be uneven, and policymakers have confidence that inflation is on a steady path toward the 2% target.
Read more HERE
#world news#news#world politics#usa#usa politics#usa news#united states#united states of america#us politics#donald trump#donald trump 2024#trump#trump 2024#president trump#republicans#interest rates#jerome powell#us federal reserve#economy#economic growth#economic impact#economic development#economics
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" It’s important to understand that the Soviet Union achieved collapse-preparedness inadvertently, and not because of the success of some crash program. Economic collapse has a way of turning economic negatives into positives. The last thing we want is a perfectly functioning, growing, prosperous economy that suddenly collapses one day, and leaves everybody in the lurch. It is not necessary for us to embrace the tenets of command economy and central planning to match the Soviet lackluster performance in this area. We have our own methods, that are working almost as well. I call them “boondoggles.” They are solutions to problems that cause more problems than they solve.
Just look around you, and you will see boondoggles sprouting up everywhere, in every field of endeavor: we have military boondoggles like Iraq, financial boondoggles like the doomed retirement system, medical boondoggles like private health insurance, legal boondoggles like the intellectual property system. The combined weight of all these boondoggles is slowly but surely pushing us all down. If it pushes us down far enough, then economic collapse, when it arrives, will be like falling out of a ground floor window. We just have to help this process along, or at least not interfere with it. So if somebody comes to you and says “I want to make a boondoggle that runs on hydrogen” – by all means encourage him! It’s not as good as a boondoggle that burns money directly, but it’s a step in the right direction. "
Dmitry Orlov - Closing the Collapse Gap (2006)
#Dmitry Orlov#Closing the Collapse Gap#2006#USA#USSR#Soviet Union#Cold War#optimism#economics#economy#Soviet people#United States of America#Russia#20th century#superpowers#progress#growth#employment#world domination#bankruptcy#space race#arms race#Mutual Assured Destruction#technology#ideology#money#consumerism#social cohesion#government#transportation
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Embark on a professional odyssey through Employment-Based Immigration in the USA, a gateway for skilled individuals and professionals seeking career opportunities on American soil. This immigration pathway encompasses various visa categories, from the widely recognized H1B to employment-based green cards, providing a diverse spectrum of professionals the chance to contribute to the vibrant tapestry of the U.S. job market. Explore stories of achievement, resilience, and innovation as individuals navigate the complexities of employment-based immigration, fostering economic growth and enriching industries across the nation. Join us in celebrating the success stories of those who have turned their ambitions into reality, leaving an indelible mark on the ever-evolving landscape of the American workforce.
#American workforce#Employment-Based Immigration USA#Skilled worker visa categories#Professional immigration pathways#Job opportunities for immigrants in the USA#H1B visa success stories#Green card through employment#Employment-based visa requirements#US work visas for professionals#Contributing to the American workforce#Career growth through US immigration#Global talent in the USA#Employment-based immigration success#Skilled worker contributions to US industries#US work visa application process#Navigating employment-based immigration#Professional opportunities in the United States#Economic impact of skilled immigrants#Immigrant professionals in the US job market#Tech industry immigration stories#Innovation through employment-based immigration
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Support for Immigration from Nicholas Eberstadt and George Will
Nicholas Eberstadt , the Henry Wendt Chair in Political Economy at Washington, D.C.;’s American Enterprise Institute (AEI), has authored a penetrating 23-page article about the upcoming new era of history he calls “the age of depopulation.”[1] Eberstadt “researches and writes extensively on demographics and economic development generally, and more specifically on international security in the…
#"the age of depopulation"#American Enterprise Institute (AEI)#birth rates#Cuba. United States of America (USA)#Donald Trump#economic growth#emancipaation of women#European Union members#France#George F. Will#human population#immigration#Iran#Italy#Kamila Harris#Nicholas Eberstadt#North Korea#Russia#social welfare systems#Spain#Washington Post
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youtube
So, building things is important. You must build things to sells things. And you have to sells things for the good of the economy. And we don't want a bad economy. A bad economy is no good for you, the individual. So the Democrats has a section on manufacturing.
#kamala harris#election#election 2024#usa election#democrats#democratic party#democratic party platform#manufacturing#jobs#jobs jobs jobs#economy#economics#economic growth#Youtube
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✅ 🇺🇸The economy is doing just fine
“Looking at the latest daily and weekly data shows that retail sales are strong, jobless claims are falling, restaurant bookings are strong, air travel is strong, hotel occupancy rates are high, bank credit growth is accelerating, bankruptcy filings are trending lower, credit card spending is solid, and Broadway show attendance and box office grosses are strong. The Atlanta Fed’s GDP Now estimate for third quarter GDP is 2.4%, and the Dallas Fed weekly GDP indicator is 2.3%. Finally, we added a new chart with state-level GDP for New York, California, and Texas, which also shows continued strength.”
-slock
#investment #ennovance
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youtube
#@kudoskuber#gk#bank#ias#usa#shaktikanta das#indian economy#corporate excellence awards 2023#economy news#rbi governor shaktikanta das#economy for upsc 2023#et awards for corporate excellence#amitabh kant on india's g20 presidency#indian economy upsc english#rbi governor shaktikanta das announcement#indian economy growth#economy#india's g20 sherpa amitabh kant#growth of indian economy#economics current affairs 2022 in hindi#rbi new governor shaktikanta das#governor shaktikanta das#youtube#trending#india#banking#upsc#finance#banks#Youtube
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The Current State of the US Economy: Causes, Solutions, & the Path Foward
I hope yall will enjoy and take something away from this. ❤️
The United States economy, as the world’s largest and most influential, is subject to numerous factors that shape its performance. In this blog post, we will examine the current state of the US economy, explore some of the causes behind its fluctuations, and discuss potential solutions to address its challenges. To provide a comprehensive view, we will reference credible news sources and expert…
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#Blog#Development#Economics#Economy#Educational#Finance#Gentlemen#How to#Investing#Men#Money#Self growth#Stock#Us#Usa
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China’s Economic Growth Surges Ahead: What Does It Mean for the World?
Pixabay:great Wall of China China’s economy has been on a rampage in recent years, with impressive growth rates that far outpace those of other major economies. In 2021, China’s GDP grew by 8.1%, while the United States and the European Union grew by 6.4% and 4.2%, respectively. This rapid expansion has sparked concerns among some economists, who worry about the sustainability of China’s growth…
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Optimism Abounds: US Job Data Signals Balance Amid Economic Cooling
Recent developments in the US job market have ignited optimism and discussions about a potential “Goldilocks scenario.” With unemployment plummeting to a remarkable 3.8% — the lowest since 2000 — and wage growth slowing down, experts are contemplating a sweet spot where economic growth remains steady without causing inflationary pressures. This scenario, reminiscent of Goldilocks and the Three Bears, symbolizes the perfect balance.
The declining unemployment rate is particularly promising for young adults entering or preparing for the job market. It offers a brighter outlook for their future career prospects. However, the moderation in wage growth, while indicating economic stability, could be attributed to factors like increased living costs and heightened job competition.
The most significant impact may be on the Federal Reserve’s policy decisions. With historic lows in unemployment, there’s growing anticipation that the Fed may pause or slow its interest rate hikes, benefiting borrowers and potentially stimulating further economic growth.
In summary, the US job market’s strength and resilience give rise to hopes for a balanced economy. The interplay between declining unemployment and wage growth moderation sets the stage for a positive economic outlook and possibly a “just right” scenario, similar to Goldilocks’ perfect porridge.
Source:Â Economic Insider
Also Read:Â Navigating EU Regulations: Microsoft's Bold Approach
#balanced economy#unemployment#finance#economy#economic growth#economic stability#news#trending#usa#economic insider
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I'm asking this genuinely, as a 19 yo with no education in economics and a pretty surface level understanding of socialism: can you explain the whole Bananas discourse in a way someone like me might understand? In my understanding it's just "This is just a product we can give up to create better worker conditions and that's fine" but apparently that's not the full picture?
alright so some pretty important background to all this is that we're all talking about the fact that bananas, grown in the global south, are available year-round at extremely low prices all around europe and the USA. it's not really about bananas per so--the banana in this discourse is a synechdoche for all the economic benefits of imperialism.
so how are cheap bananas a result of imperialism? first of all i want to tackle a common and v. silly counterargument: 'oh, these ridiculous communists think it's imperialist for produce to be shipped internationally'. nah. believing that this is the communist objection requires believing in a deeply naive view of international traide. this view goes something like 'well, if honduras has lots of bananas, and people in the usa want bananas and are willing to pay for them, surely everyone wins when the usa buys bananas!'.
there are of course two key errors here and they are both packed into 'honduras has lots of bananas'. for a start, although the bananas are grown in honduras, honduras doesn't really 'have' them, because the plantations are mostly owned by chiquita (formerly known as united fruit) dole, del monte, and other multinationals--when they're not, those multinationals will usually purchase the bananas from honduran growers and conduct the export themselves. and wouldn't you know it, it's those intervening middleman steps--export, import, and retail, where the vast majority of money is made off bananas! so in the process of a banana making its way from honduras to a 7/11, usamerican multinationals make money selling the bananas to usamerican importers who make money selling them to usamerican retailers who make money selling them to usamerican customers.
when chiquita sells a banana to be sold in walmart, a magic trick is being performed: a banana is disappearing from honduras, and yet somehow an american company is paying a second american company for it! this is economic imperialism, the usamerican multinational extracting resources from a nation while simultaneously pocketing the value of those resources.
why does the honduran government allow this? if selling bananas is such a bad deal for the nation, why do they continue to export millions of dollars of banans a year? well, obviously, there's the fact that if they didn't, they would face a coup. the united states is more than willing to intervene and cause mass death and war to protect the profits of its multinationals. but the second, more subtle thing keeping honduras bound to this ridiculously unbalanced relationship is the need for dollars. because the US dollar is the global reserve currency, and the de facto currency of international trade, exporting to the USA is a basic necessity for nations like honduras, guatemala, &c. why is the dollar the global reserve currency? because of usamerican military and economic hegemony, of course. imperialism built upon imperialism!
this is unequal exchange, the neoimperialist terms of international trade that make the 'global economy' a tool of siphoning value and resources from the global south to the imperial core. & this is the second flaw to unravel in 'honduras has a lot of bananas' -- honduras only 'has a lot of bananas' because this global economic hegemony has led to vast unsustainable monoculture banana plantations to dominate the agriculture of honduras. it's long-attested how monoculture growth is unsustainable because it destroys soil and leads to easily-wiped-out-by-infection plants.
so, bananas in the USA are cheap because:
the workers that grow them are barely paid, mistreated, prevented from unionizing, and sometimes murdered
the nations in which the bananas are grown accept brutally unfair trade and tariff terms with the USA because they desperately need a supply of US dollars and so have little position to negotiate
shipping is also much cheaper than it should be because sailors are chronically underpaid and often not paid at all or forced to pay to work (!)
bananas are cheap, in conclusion, because they're produced by underpaid and brutalized workers and then imported on extortionate and unfair terms.
so what, should we all give up bananas? no, and it's a sign of total lack of understanding of socialism as a global movement that all the pearl-clutching usamericans have latched onto the scary communists telling them to stop buying bananas. communism does not care about you as a consumer. individual consumptive choices are not a meaningful arena of political action. the socialist position is not "if there was a socialist reovlution in the usa, we would all stop eating bananas like good little boys", but rather, "if there's a socialist revolution in the countries where bananas are grown, then the availability of bananas in the usa is going to drop, and if you want to be an anti-imperialist in the imperial core you have to accept that".
(this is where the second argument i see about this, 'oh what are you catholic you want me to eat dirt like a monk?' reveals itself as a silly fucking solipsistic misunderstanding)
and again, let's note that the case of the banana can very easily be generalised out to coffee, chocolate, sugar, etc, and that it's not about individual consumptive habits, but about global economic systems. if you are donkey fucking kong and you eat 100 bananas a day i don't care and neither does anyone else. it's about trying to illustrate just one tiny mundane way in which economic imperialism makes the lives of people in the global north more convenient and simpler and so of course there is enormous pushback from people who attach moral value to this and therefore feel like the mean commies are personally calling them evil for eating a nutella or whatever which is frankly pretty tiring. Sad!
tldr: it is not imperialism when produce go on boat but it is imperialism when produce grown for dirt cheap by underpaid workers in a country with a devalued currency is then bought and exported and sold by usamerican companies creating huge amounts of economic value of which the nation in which the banana was grown, let alone the people who actually fucking grew it, don't see a cent -- and this is the engine behind the cheap, available-every-day-all-year-everywhere presence of bananas in the usa (and other places!)
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Sometimes, old American books about trees are all "This tree is unshapely, has ragged and irregular growth and has little economic value." but I was wrong to characterize them all as such, because for every capitalist-minded book about the USA's trees that is like "ough we gotta exploit every living thing" there's also a book like this:
The book is called Our Friends the Trees and it was written in the 1930's and this is the VERY FIRST PARAGRAPH, no introduction no nothing, just going all in taking no prisoners from the very first line and it CONTINUES like this for the WHOLE book there is ZERO chill throughout the whole length of the book
#trees#plants#so true bestie#context: at this time in history the whole of the eastern USA was being clearcut and the dust bowl was happening
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I know that many ancaps/libertarians are pro population growth and pro development, I however think that the global population and megacities are a government abomination. I keep thinking that places like the UK/Beltway/LA of USA are so fucked up because they don't have any real wilderness left. it's just a cultivated grid of human housing, industry, agriculture, the largest undomesticated creature being a racoon or fox or something pathetically small and unthreatening. Even the meme "birds aren't real" I think is a riff on this; you live in a 100% man-made environment, even the birds might as well be government spy robots.
When you fundamentally have to interact with an artificial rules based world all the time you have a tendency to systematize everything, and believe the lie that imaginary things like laws and governments are real physical things, and not just the whims of the police officer on the corner. Somewhat like abuse victims internalize the rules of their abuser to avoid punishment and cope. The urban landscape is the breeding ground of the cancerous and parasitic human survival strategy we identify as socialism/collectivism/progressivism.
The only real laws are those of nature, physics, chemistry, biology, evolution. Humans are an animal and we adapt to our environment, which is a mouse utopia. The modern world is so sick and against nature because our power to wall it out of our lives has created a hubris to rebel against these things. Progressivism in a sense, is rejection of natural order, a rejection of subjection to nature or nature's God. This is how you get to where we are today. I don't need to list the examples, but the unreality of thinking we can abolish scarcity, inequality, sex, the family, etc...
I don't want civilization and cities and humans not to exist. I just want radical concentrations of those things. We had 2.5% the global population in antiquity and still got innovative and talented thinkers that we still discuss today, artists, engineers, etc. These people had ample access to an untamed world, one that was unpredictable, and challenged them.
The urban human is a domesticated one. They have no real self-determination. Without a world unmade by humans, they have no reference for something beyond the imagination of another human, no blank canvas to make their own. Like the shadows of Plato's cave I'd wager it's like a person forced to look into a mirror their entire life. They would have no ability to identify themselves in the mirror as they have no reference that the mirror isn't just the entire world.
Climbing mountains, navigating rapids, scaling rock walls, skiing couloirs... the physical conquest of nature yields a surprise that cannot be claimed from an artificial challenge.
Think of the sweating, yelling, heaving mass of Cairo,
Bangladesh
Lagos
Mexico city
You might just assume they make great films, music, art, thinkers, engineers, and we just don't hear about them because they don't get distributed here or something. No it's just a mass of human flesh consuming the natural world, no ability to reflect and create, just consume.
Almost all of these places import food from the temperate climates of developed nations. A two year breakdown of global supply chains would result in them starving in the millions.
Even here in western civilization we yield the prime 'high-density walkable" real-estate to degenerates via council and section 8 housing.
Government programs of fiat currency, the welfare-warfare state, followed by deindustrialization has resulted in a massive mismatch in human population and economic/environmental capacity. Sure, here's where someone could politely chime in that "humans have infinite creative capacity, we just need to unlock their potential and your Malthusian doomsday is no more" and I grant that to a degree.
But massive declines in human population, the standard of living, and technology are regular historical occurrences. Western science has had an absolute "ick" towards actually understanding and implementing Darwinism towards human populations. Country-wide datasets of IQ probably remain stable due to the continuing rise/Flynn effect of the middle/upper class offsetting the sliding downward of the welfare class. There's no evolutionary biologist who wouldn't recognize that the market economy selects for intelligence and the welfare state was our feeble altruistic effort to carry the "but I did have breakfast" population along with us.
We've had nearly a century and, in some cases of repeated teen pregnancies, 6 or 7 generations who were never asked to provide for themselves meaningfully. They live in an ever more confusing world of late payments, cash advances, welfare office applications, prison stints, evictions, and unplanned pregnancies. Each generation more befuddled than the last. Recent studies show that there have been population bottlenecks through human evolution. In the bronze age as few as 1 in 17 men reproduced at all.
Biological imperatives of reproduction rule over all other sentiments and altruistic masochism. For the silent generation and the boomers, the welfare state was a token price they agreed to pay to keep the peace and they could afford it as they got race-rioted out of their downtown homes into the suburbs. Now the jig is up and millennials en-masse are finding that they can't afford to have kids *intentionally*. They look at their pay stub getting taxed at 40% so that, over at the section 8 housing, "baby mamas" collect government checks for the consequence of a hookup with serial felons, who are also housed and fed with working people's taxes. The boomers made a devil's bargain, they cucked their children!
Now we enter the final death spiral of empires and welfare states: below replacement fertility rates and above GDP national debt!
The group most prepared for the coming calamity, the group who predicted it, and who will emerge as victors are those who are internally pro-growth/pro population but maintain in-group preferences. The stats bear out:
Now this shift isn't just conservatives but libertarians also. In a couple generations we have gone from 1% in the 70's to 10% in the 2010s and now easily 25% in the 2020's (many libertarians simply don't vote or vote republican). We will replace left-wingers, who only reproduce vampirically via public education, in the next generation. There is hope at the end of this journey but it will be difficult in the mean time. Prepare yourself accordingly.
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J.4.4 What is the “economic structural crisis”?
There is an ongoing structural crisis in the global capitalist economy. Compared to the post-war “Golden Age” of 1950 to 1973, the period from 1974 has seen a continual worsening in economic performance in the West and for Japan. For example, growth is lower, unemployment is far higher, labour productivity lower as is investment. Average rates of unemployment in the major industrialised countries have risen sharply since 1973, especially after 1979. Unemployment “in the advanced capitalist countries … increased by 56 per cent between 1973 and 1980 (from an average 3.4 per cent to 5.3 per cent of the labour force) and by another 50 per cent since then (from 5.3 per cent of the labour force in 1980 to 8.0 per cent in 1994).” Job insecurity has increased with, for example, the USA, having the worse job insecurity since the depression of the 1930s. [Takis Fotopoulos, Towards and Inclusive Democracy, p. 35 and p. 141] In addition, the world economy have become far less stable with regular financial crises sweeping the world of de-regulated capitalism every few years or so.
This crisis is not confined to the economy. It extends into the ecological and the social, with the quality of life and well-being decreasing as GDP grows (as we noted in section C.10, economic factors cannot, and do not, indicate human happiness). However, here we discuss economic factors. This does not imply that the social and ecological crises are unimportant or are reducible to the economy. Far from it. We concentrate on the economic factor simply because this is the factor usually stressed by the establishment and it is useful to indicate the divergence of reality and hype we are currently being subjected to.
Ironically enough, as Marxist Robert Brenner points out, “as the neo-classical medicine has been administered in even stronger doses, the economy has performed steadily less well. The 1970s were worse than the 1960s, the 1980s worse than the 1970s, and the 1990s have been worse than the 1980s.” [“The Economics of Global Turbulence”, New Left Review, no. 229, p. 236] This is ironic because during the crisis of Keynesianism in the 1970s the right argued that too much equality and democracy harmed the economy, and so us all worse-of in the long run (due to lower growth, sluggish investment and so on). However, after decades of pro-capitalist governments, rising inequality, increased freedom for capital and its owners and managers, the weakening of trade unions and so on, economic growth has become worse!
If we look at the USA in the 1990s (usually presented as an economy that “got it right”) we find that the “cyclical upturn of the 1990s has, in terms of the main macro-economic indicators of growth — output, investment, productivity, and real compensation — has been even less dynamic than its relatively weak predecessors of the 1980s and the 1970s (not to mention those of the 1950s and 1960s).” [Brenner, Op. Cit., p. 5] Of course, the economy is presented as a success — inequality is growing, the rich are getting richer and wealth is concentrating into fewer and fewer hands and so for the rich and finance capital, it can be considered a “Golden Age” and so is presented as such by the media. As economist Paul Krugman summarises, in America while the bulk of the population are working longer and harder to make ends meet “the really big gains went to the really, really rich.” In fact, “only the top 1 percent has done better since the 1970s than it did in the generation after World War II. Once you get way up the scale, however, the gains have been spectacular — the top tenth of a percent saw its income rise fivefold, and the top .01 percent of American is seven times richer than they were in 1973.” Significantly, the top 0.1% of Americans, a class with a minimum income of about $1.3 million and an average of about $3.5 million, receives more than 7 percent of all income — up from just 2.2 percent in 1979.” [The Conscience of a Liberal, p. 129 and p. 259]
So it is for this reason that it may be wrong to term this slow rot a “crisis” as it is hardly one for the ruling elite as their share in social wealth, power and income has steadily increased over this period. However, for the majority it is undoubtedly a crisis (the term “silent depression” has been accurately used to describe this). Unsurprisingly, when the chickens came home to roost under the Bush Junta and the elite faced economic collapse, the state bailed them out.
The only countries which saw substantial and dynamic growth after 1973 where those which used state intervention to violate the eternal “laws” of neo-classical economics, namely the South East Asian countries (in this they followed the example of Japan which had used state intervention to grow at massive rates after the war). Of course, before the economic crisis of 1997, capitalist ideologues argued that these countries were classic examples of “free market” economies. Right-wing icon F.A von Hayek asserted that “South Korea and other newcomers” had “discovered the benefits of free markets.” [1980s Unemployment and the Unions, p. 113] In 1995, the Heritage Foundation (a right-wing think-tank) released its index of economic freedom. Four of the top seven countries were Asian, including Japan and Taiwan. All the Asian countries struggling just a few years later qualified as “free.” Yet, as mentioned in section C.10.1, such claims were manifestly false: “it was not laissez-faire policies that induced their spectacular growth. As a number of studies have shown, the expansion of the Asian Tigers was based on massive state intervention that boosted their export sectors, by public policies involving not only heavy protectionism but even deliberate distortion of market prices to stimulate investment and trade.” [Fotopoulos, Op. Cit., p. 115] Moreover, for a long period these countries also banned unions and protest, but then for the right “free markets” always seem compatible with lack of freedom for workers to organise.
Needless to say, after the crisis of the late 1990s, the free-marketeers discovered the statism that had always been there and danced happily on the grave of what used to be called “the Asian miracle”. It was perverse to see the supporters of “free-market” capitalism concluding that history was rendering its verdict on the Asian model of capitalism while placing into the Memory Hole the awkward fact that until the crisis they themselves had taken great pains to deny that such a model existed! Such hypocrisy is not only truly sickening, it also undermines their own case for the wonders of “the market.” For until the crisis appeared, the world’s investors — which is to say “the market” — saw nothing but golden opportunities ahead for these “free” economies. They showed their faith by shoving billions into Asian equity markets, while foreign banks contentedly handed out billions in loans. If Asia’s problems were systemic and the result of these countries’ statist policies, then investors’ failure to recognise this earlier is a blow against the market, not for it.
So, as can be seen, the global economy has been marked by an increasing stagnation, the slowing down of growth, weak (and jobless) recoveries, speculative bubbles driving what growth there is and increasing financial instability producing regular and deepening crisis. This is despite (or, more likely, because of) the free market reforms imposed and the deregulation of finance capital (we say “because of” simply because neo-classical economics argue that pro-market reforms would increase growth and improve the economy, but as we noted in section C.1 such economics has little basis in reality and so their recommendations are hardly going to produce positive results). Of course as the ruling class have been doing well this underlying slowdown has been ignored and obviously claims of crisis are only raised when economic distress reach the elite.
Crisis (particularly financial crisis) has become increasingly visible, reflecting the underlying weakness of the global economy (rising inequality, lack of investment in producing real goods in favour of speculation in finance, etc.). This underlying weakness has been hidden by the speculator performance of the world’s stock markets, which, ironically enough, has helped create that weakness to begin with! As one expert on Wall Street argues, “Bond markets … hate economic strength … Stocks generally behave badly just as the real economy is at its strongest … Stocks thrive on a cool economy, and wither in a hot one.” In other words, real economic weakness is reflected in financial strength. Unsurprisingly, then, ”[w]hat might be called the rentier share of the corporate surplus — dividends plus interest as a percentage of pre-tax profits and interest — has risen sharply, from 20–30% in the 1950s to 60% in the 1990s.” [Doug Henwood, Wall Street, p. 124 and p. 73]
This helps explain the stagnation which has afflicted the economies of the west. The rich have been placing more of their ever-expanding wealth in stocks, allowing this market to rise in the face of general economic torpor. Rather than being used for investment, surplus is being funnelled into the finance market (retained earnings in the US have decreased as interest and dividend payments have increased [Brenner, Op. Cit., p. 210]). However, such markets do concentrate wealth very successfully even if “the US financial system performs dismally at its advertised task, that of efficiently directing society’s savings towards their optimal investment pursuits. The system is stupefyingly expensive, gives terrible signals for the allocation of capital, and has surprisingly little to do with real investment.” [Henwood, Op. Cit., p. 3] As most investment comes from internal funds, the rise in the rentiers share of the surplus has meant less investment and so the stagnation of the economy. The weakening economy has increased financial strength, which in turn leads to a weakening in the real economy. A vicious circle, and one reflected in the slowing of economic growth over the last 30 years.
The increasing dominance of finance capital has, in effect, created a market for government policies. As finance capital has become increasingly global in nature governments must secure, protect and expand the field of profit-making for financial capital and transnational corporations, otherwise they will be punished by dis-investment by global markets (i.e. finance capital). These policies have been at the expense of the underlying economy in general, and of the working class in particular:
“Rentier power was directed at labour, both organised and unorganised ranks of wage earners, because it regarded rising wages as a principal threat to the stable order. For obvious reasons, this goal was never stated very clearly, but financial markets understood the centrality of the struggle: protecting the value of their capital required the suppression of labour incomes.” [William Greider, One World, Ready or Not, p. 302]
For example, “the practical effect of finance capital’s hegemony was to lock the advanced economies and their governments in a malignant spiral, restricting them to bad choices. Like bondholders in general, the new governing consensus explicitly assumed that faster economic growth was dangerous — threatening to the stable financial order — so nations were effectively blocked from measures that might reduce permanent unemployment or ameliorate the decline in wages … The reality of slow growth, in turn, drove the governments into their deepening indebtedness, since the disappointing growth inevitably undermined tax revenues while it expanded the public welfare costs. The rentier regime repeatedly instructed governments to reform their spending priorities — that is, withdraw benefits from dependent citizens.” [Greider, Op. Cit., pp. 297–8]
Of course, industrial capital also hates labour, so there is a basis of an alliance between the two sides of capital, even if they do disagree over the specifics of the economic policies implemented. Given that a key aspect of the neo-liberal reforms was the transformation of the labour market from a post-war sellers’ market to a nineteenth century buyers’ market with its related effects on workplace discipline, wage claims and proneness to strike, industrial capital could not but be happy even if its members quibbled over details. Doug Henwood correctly argues that “Liberals and populists often search for potential allies among industrialists, reasoning that even if financial interests suffer in a boom, firms that trade in real, rather than fictitious, products would thrive when growth is strong. In general, industrialists are less sympathetic to these arguments. Employers in any industry like slack in the labour market; it makes for a pliant workforce, one unlikely to make demands or resist speedups.” In addition, “many non-financial corporations have heavy financial interests.” [Op. Cit., p. 123 and p. 135]
Thus the general stagnation afflicting much of the world, a stagnation which regularly develop into open crisis as the needs of finance undermine the real economy which, ultimately, it is dependent upon. The contradiction between short term profits and long term survival inherent in capitalism strikes again.
Crisis, as we have noted above, has appeared in areas previously considered as strong economies and it has been spreading. An important aspect of this crisis is the tendency for productive capacity to outstrip effective demand, which arises in large part from the imbalance between capitalists’ need for a high rate of profit and their simultaneous need to ensure that workers have enough wealth and income so that they can keep buying the products on which those profits depend. Inequality has been increasing particularly in neo-liberal countries like the UK and USA, which means that the economy faces as realisation crisis (see section C.7), a crisis which was avoided in the short-term by deepening debt for working people (debt levels more than doubled between the 1950s to the 1990s, from 25% to over 60%). In 2007, the chickens came hole to roost with a global credit crunch much worse than the previous finance crises of the neo-liberal era.
Over-investment has been magnified due to the East-Asian Tigers and China which, thanks to their intervention in the market (and repressive regimes against labour), ensured they were a more profitable place to invest than elsewhere. Capital flooded into the area, ensuring a relative over-investment was inevitable. As we argued in section C.7.2, crisis is possible simply due to the lack of information provided by the price mechanism — economic agents can react in such a way that the collective result of individually rational decisions is irrational. Thus the desire to reap profits in the Tiger economies resulted in a squeeze in profits as the aggregate investment decisions resulted in over-investment, and so over-production and falling profits.
In effect, the South East Asian economies suffered from the “fallacy of composition.” When you are the first Asian export-driven economy, you are competing with high-cost Western producers and so your cheap workers, low taxes and lax environmental laws allow you to under-cut your competitors and make profits. However, as more tigers joined into the market, they end up competing against each other and so their profit margins would decrease towards their actual cost price rather than that of Western firms. With the decrease in profits, the capital that flowed into the region flowed back out, thus creating a crisis (and proving, incidentally, that free markets are destabilising and do not secure the best of all possible outcomes). Thus, the rentier regime, after weakening the Western economies, helped destabilise the Eastern ones too.
So, in the short-run, many large corporations and financial companies solved their profit problems by expanding production into “underdeveloped” countries so as to take advantage of the cheap labour there (and the state repression which ensured that cheapness) along with weaker environmental laws and lower taxes. Yet gradually they are running out of third-world populations to exploit. For the very process of “development” stimulated by the presence of Transnational Corporations in third-world nations increases competition and so, potentially, over-investment and, even more importantly, produces resistance in the form of unions, rebellions and so on, which tend to exert a downward pressure on the level of exploitation and profits.
This process reflects, in many ways, the rise of finance capital in the 1970s. In the 1950s and 1960s, existing industrialised nations experienced increased competition from Japan and Germany. As these nations re-industrialised, they placed increased pressure on the USA and other nations, reducing the global “degree of monopoly” and forcing them to compete with lower cost producers. In addition, full employment produced increasing resistance on the shop floor and in society as a whole (see section C.7.1), squeezing profits even more. Thus a combination of class struggle and global over-capacity resulted in the 1970s crisis. With the inability of the real economy, especially the manufacturing sector, to provide an adequate return, capital shifted into finance. In effect, it ran away from the success of working people asserting their rights at the point of production and elsewhere. This, combined with increased international competition, ensured the rise of finance capital which in return ensured the current stagnationist tendencies in the economy (tendencies made worse by the rise of the Asian Tiger economies in the 1980s).
From the contradictions between finance capital and the real economy, between capitalists’ need for profit and human needs, between over-capacity and demand, and others, there has emerged what appears to be a long-term trend toward permanent stagnation of the capitalist economy with what growth spurts which do exist being fuelled by speculative bubbles as well as its benefits being monopolised by the few (so refuting the notion of “trickle down” economics). This trend has been apparent for several decades, as evidenced by the continuous upward adjustment of the rate of unemployment officially considered to be “normal” or “acceptable” during those decades, and by other symptoms as well such as falling growth, lower rates of profit and so on.
This stagnation has became even more obvious by the development of deep crisis in many countries at the end of the 2000s. This caused central banks to intervene in order to try and revive the real economies that have suffered under their rentier inspired policies since the 1970s. Such action may just ensure continued stagnation and reflated bubbles rather than a real-up turn. One thing is true, however, and that is the working class will pay the price of any “solution” — unless they organise and get rid of capitalism and the state. Ultimately, capitalism need profits to survive and such profits came from the fact that workers do not have economic liberty. Thus any “solution” within a capitalist framework means the increased oppression and exploitation of working class people.
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