Tag Archive for 'Capitalism'

G20 Summit: A new Bretton Woods?

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by
Mark
2 weeks, 2 days ago
in Economics, International, Media, Sociology and USA
. 60 Comments

The G20 Summit has come and gone, and if today’s coverage in the Australian press is any indication, the most important of the tea leaves to be read is whether George W. Bush snubbed Kevin Rudd over the “Kirribilli leak”. Yep, a non-story that has burbled along for weeks, now diverted into intra-press gallery trading of accusations and a tedious talking point for the opposition - that’s the most important aspect of the events in Washington according to our “quality” media. As far as I can work out, if Bush is indeed upset that his ignorance of the function and nature of the G20 was revealed to the world, that just confirms what a lot of folks have always known about W - that’s he’s at best unengaged, at worst ignorant. But I suppose our fearless journos aren’t allowed to draw that conclusion lest a global diplomatic crisis add to our woes from the global financial crisis!

But, anyway, the lame duck President made his ritual obeisance to the virtues of American leadership and the glories of the free market. One imagines there’s some personal and political imperative there, but the reality of his governance is better disclosed in the fate of the TARP funds which Treasury Secretary Henry Paulson was given by Congress - it appears that crony capitalism and socialism for the rich is the name of the game according to American blogs such as naked capitalism, Obsidian Wings, firedoglake and naked capitalism again.

But Bush will soon be fading into history, and Barack Obama sensibly declined to act at the summit without executive authority, so what emerged from the G20 is more in the nature of a directions statement for the way forward, as The Big Picture foresaw:

Hopefully, a long term agenda for regulatory cooperation and communication can be set with the next meeting’s agenda decided upon. Far better to talk then not, but no real decisions will come out of this meeting. There will be gnashing of teeth and venting of rage at the mess that excess securitization has created, and the international regulation of and accounting for such derivatives will probably be a focus.

Planet Money looks at what transpired, and links to the text of the communique here. Continue reading ‘G20 Summit: A new Bretton Woods?’

The state of the capitalist economy IV

Published
by
Mark
1 month ago
in China, Developing world, Economics, Europe, International, Markets, Sociology and USA
. 79 Comments

One of the intriguing things about wading through some of the business and economics shelves of some CBD bookshops in (fruitless) search of some of the titles John Quiggin reviewed in the Fin Review on Friday (not online of course) was seeing tomes with titles such as “Bubbles last forever!”, “How to make enormous amounts of money from endless bubbles!”, “Greenspan is the greatest!”. I’m exaggerating, but not much. I suspect their shelf life is almost over, and they’re headed for the remainder bin soon. At any rate, I’ll have to cross my fingers and hope the AUD recovers soon so I can afford to buy something a tad more contemporary - and serious - from Amazon.

Since September, I’ve been wading through far more reading matter than I’d ever imagined possible on economics and finance. Much of it has been, by necessity, somewhat ephemeral. However, it’s good to see some commentators coming out with something of a longer view.

Continue reading ‘The state of the capitalist economy IV’

The Reds are coming!

Published
by
Mark
1 month ago
in China, Developing world, Economics, Europe, Foreign Elections, Health, International, Markets, Polls and Sociology
. 27 Comments

I’m not sure if I’m the only one who found the juxtaposition on the news last night of discussion of global regulation at a meeting between Chinese and EU leaders and George W. Bush’s “free markets are great!” remarks rather odd. I suspect two things are at work here - first, the defensive reaction to loudly proclaim your ideological purity even at a time when your actions belie your words, and secondly, the related posturing of the Republicans doing their level best to damn Obama as a socialist (which is also rather strange as John McCain wants to spend $300 billion buying up mortgages). For what it’s worth, it doesn’t look like the red smear is working - unsurprisingly polls are finding that a large majority of US voters don’t mind the idea of higher taxes on those earning more than $250000 a year to fund a healthcare plan. Conjuring up these atavistic spectres (”communism!”, “socialised medicine!”) isn’t spooking too many people.

The GOP might also be a tad influenced by Alan Greenspan’s concession that his ideological predispositions led him into errors which contributed to the global financial crisis, which John Quiggin argues illustrates the bankruptcy of the “efficient markets hypothesis” and demonstrates that financial markets have a tendency towards creating instability, rather than the other way around.

So, I think there’s a bit of projection going on - amidst the ruins of their ideological landscape, the GOP are trying to cast the Democrats in the role of the enemies of market freedoms, whose benefits (in the form in which they existed) are looking quite illusory. Continue reading ‘The Reds are coming!’

The state of capitalism today II

Published
by
Mark
1 month, 2 weeks ago
in Apocalypse, Disasters, Economics, Europe, Foreign Elections, International, Markets, Media, Nationalism, Politics, Sociology and USA
. 28 Comments

SocProf over at The Global Sociology Blog and I must be reading the same things, and thinking along similar lines, because I had planned to link to precisely the same articles she highlights in an update to my recent post on the state of the global financial crisis.

In The Guardian, Will Hutton explains why measures to halt the cascading crisis have been ineffectual to date. He might have made more explicit the implication that one of the basic structural problems is that action taken at the level of the nation state can be counter-productive given the disseminations and movements of capital, and that there are real domestic political barriers to coordinated action, as well as all the obvious problems of concertation through institutions such as the EU and the G20.

But he does make this point - harmonising with the note I’ve been sounding repeatedly - very clearly indeed:

There was no effective opposition. The left and organised labour collapsed as intellectual, social and political forces; there was no conviction that any alternative to this shareholder value-driven, financial, ’securitised’ capitalism existed, or any political muscle to support it even if there were. Mainstream culture moved away from public purpose and fairness; the new priorities were individual self-fulfilment, personal experience and loyalty to self.

Hutton is perhaps more sanguine than I am, though, about the capacity of state action to turn all this around. Continue reading ‘The state of capitalism today II’

The state of capitalism today

Published
by
Mark
1 month, 3 weeks ago
in Activism, Consumerism, Culture, Economics, Ethics, International, Markets, Media, Politics, Poverty, Sociology and USA
. 89 Comments

Iceland may be a barometer for what’s changing in the world economy. It was only very recently that the Milton Friedman fan club was hailing Iceland as a “Nordic Tiger”, lauding its flat taxes and praising its “economic freedom”. “Economic miracle” was a common phrase. What’s it looking like after the credit crisis?

Iceland right now is apparently in a state of shock and gives a snapshot of what a depression with the Great in it will look like everywhere - “cafes were half-empty, real estate agents sat idle, and retailers reported few sales” says the AP.

This after the government basically took over its banking sector, with Russian money, which as noted in the linked post, has real geopolitical implications.

Meanwhile, the British government is laying out 500 billion pounds to take equity in its banking sector, but basically proposing business as usual. Co-ordinated interest rate cuts are having very little impact on the stock market, and more worryingly, on the liquidity crisis. Paul Krugman writes:

We’re way past the point at which conventional monetary policy has much traction.

In America, in the eye of the economic storm, the Fed has basically become the financial system, but to little avail:

The time for a recession was 2005. At that time simple macroeconomic policy; simply raising interest rates, would have ended the bubbles in credit and housing at the cost of a standard if somewhat nasty recession. Trillions of dollars of intervention would not have been needed. Just standard macro policy. Even in 2006 it might still have worked. The Fed blew it, and they broke the system, and now with the system broken they may have to either buy it all out (and Paulson may be considering that after all) or just become the system. And even if they do that may not work, because, well, who wants to borrow and invest right now?

Bernanke and Greenspan are certainly in the “worst Fed chairman of all time” stakes in a big, big way.

Continue reading ‘The state of capitalism today’

Journos, Moral Panics and “Facebook Parties”

Published
by
dk.au
3 months ago
in Activism, Authoritarianism, Consumerism, Crime, Culture, Disasters, Media and Urbanism
. 16 Comments

The old days of Press Release Policing are looking decidedly numbered. No longer can you just get some coppers and cameras together on the 6pm news unleashing a bit of the ultraviolence in an effort to scare the kids and reassure the olds. Once you bring web into the foray, you’re putting the narrative at risk, not only for the reasons Mark has discussed here but because you rely on Journalists. Take the author of Daily Terrorgraph story “Riot police break up Facebook party” - the headline aims to elide the Corey moral panic with the latest in series of very well organised and, crucially, free warehouse parties. She describes her job on her own Facebook profile thusly: Continue reading ‘Journos, Moral Panics and “Facebook Parties”’

Molitor@UNSW

Published
by
dk.au
7 months, 1 week ago
in Climate change, Energy, Environment, Government, Markets and Technology
. 11 Comments

Michael Molitor gave a public lecture last night at UNSW, where he now holds an adjunct professorship with the Climate Change Research Centre between appointments as a ‘Carbon Manager’ for PriceWaterhouseCooper. The talk was entitled Climate Change: ‘Show Me The Money’, which is the famous line from Tom Cruise’s character in Jerry Maguire - so when Molitor spoke passionately of the ‘Governor of NSW’, I was thankful that there were no couches onstage. Though, to be fair, the event showcased a fascinating, eclectic and sometimes contradictory mix of bravado-filled insights on the problem of climate change from someone on the inner circle of business elites. The message was familiar enough - that we aren’t moving quickly enough for the scale of the problem - his analysis, however, was somewhat less conventional.

The ‘good news’ began with the observation that our ‘carbon productivity’, that is, our economic outputs from machines relative to their spewing waste into the global carbon dump has actually been increasing over time. Continue reading ‘Molitor@UNSW’