Tag Archive for 'gordon brown'

The state of capitalism today III

Published
by
Mark
1 month, 1 week ago
in Economics, International, Markets, Politics, Sociology and USA
. 24 Comments

I can’t recall where I read this, but someone in one of the many interesting things written about the global financial crisis suggested that “Keynes” (of whom we’ve heard more lately than we’ve heard for a long time) might be a useful heuristic to understand what’s been happening rather than a real source of inspiration for policy responses or analyses. With all the calls for a new Bretton Woods, emanating from Gordon Brown (and Kevin Rudd), what appears to have been overlooked is that Keynes’ proposals at Bretton Woods itself were substantially modified to ensure the effective independence of the US currency from the financial architecture it put in place - something that’s explained quite deftly here. So, even at the height of “Keynesianism”, we never really had the rule-bound constraints on capitalist behaviour which the man himself had wanted to see. Similarly, there’s no great novelty in pump priming as a tool of macro-economic management and it’s better understood as a pragmatic mode of state intervention, which has been adopted as a tactic of governance, rather than as a paradigm shift in economic practice. Again, there are significant differences between Keynes’ own ideas and the “neo-Keynesian synthesis”.

However, I think we can now advance a few hypotheses, however tentative, about what’s occurring - in terms of both political economy and the sociology of knowledge.

Continue reading ‘The state of capitalism today III’

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’

Can politicians walk and chew gum at the same time?

Published
by
Mark
2 months ago
in Climate change, Economics, Energy, Environment, International, Media and Polls
. 5 Comments

The obvious retort to John McCain’s faux suspension of his campaign last week was that Presidents should be able to deal with more than one issue at the same time. That’s obviously true, but it’s also a truism which disguises something - politicians think that the public want their focus predominantly on the crucial issue of the moment (and the media reinforces this with its “narrative” obsession).

It might not have escaped folks’ attention that Kevin Rudd minimised his focus on climate change at the UN in favour of the plan he and Gordon Brown cooked up for saving the world’s finances. Rudd himself mentioned that it would be difficult to concentrate world leaders’ attention on climate change. This rhetoric also provided him with some convenient cover for disguising the switch in focus for the justification of his trip as it came under opposition attack. But it does raise the broader question of which way Kevin Rudd will jump on climate change and emissions trading - perhaps more in terms of the international negotiations (which however can’t be separated from the domestic politics, with the whole question of the significance and timing of Australia’s ETS being crucial to the “argy bargy”).

The Lowy Institute Poll being released today might pose some dangers ahead. Continue reading ‘Can politicians walk and chew gum at the same time?’

The end of financialisation? II

Published
by
Mark
2 months, 2 weeks ago
in Economics, International, Markets, Media, Sociology and USA
. 62 Comments

As a supplement to earlier posts on the sociology of the global financial crisis from Kim and dk.au, I thought I’d note something very interesting written by Henry Farrell at Crooked Timber. Farrell traces the shift in paradigm in the regulatory architecture of finance, one that has supplemented the first shift away from direct involvement of the state in economic ownership:

The second is more specific and recent – the tendency to replace ‘heavy-handed’ forms of regulation with ‘regulation with a light touch’ and self-regulation. This has been most marked in Anglo-American economies, but other countries (in continental Europe and elsewhere) have faced persistent ideological pressures to move in this direction. This is a large chunk of the so-called ‘reform’ agenda that the Economist magazine, the OECD and other such bodies keep pushing. Both of these shifts are largely ideological – that is, they gained much of their impetus from changes in the ideas which constitute policy-makers’ shared collective wisdom about how to deal with the economy.

The second shift (the reform agenda) is now a busted flush. Its proponents are in disarray (if I’m feeling in a vindictive mood, I may well buy a copy of the next Economist to see how its editorialists try to rationalize all of this).

Any reasonable assessment of the actions of the Fed and the US Treasury would suggest that they’re driven by confusion and are very much ad-hoc measures. Neither Bernanke nor Paulson seems to have much of a big picture grip, and politicians reciting “the fundamentals are sound” is clearly not going to cut the mustard now, even, as with John McCain, precipitating something of a backlash.

John Quiggin has speculated on how all this will play out. The confusion has led to some quite bizarre moments, such as pundits on Lateline Business declaiming “capitalism is in crisis” and “the financial markets may not be viable”. What we’re seeing - among other things - is a decomposition of that abstraction “the markets” and a reduction of these so-called impersonal forces to the panicked reactions of individuals. If Robert Skidelsky is right, and a tipping point has been reached, it begs a very big question, which Farrell answers in terms of process (because no one can know the outcome of such a fluid conjuncture). Continue reading ‘The end of financialisation? II’

All politics is local global?

Published
by
Kim
2 months, 2 weeks ago
in Politics
. 4 Comments

Junior whip Siobhain McDonagh, an “arch-Blairite”, has been sacked by Gordon Brown for calling for a leadership challenge.

Here’s an interesting tidbit:

In another sign of discontent about Mr Brown, 12 Labour MPs have written a joint article for the Blairite magazine Progress calling for “a convincing new narrative” which is more than just “a series of policy initiatives”.

Sound familiar?

Gordon Brown triangulates like it’s 2001

Published
by
Robert Merkel
5 months, 3 weeks ago
in Europe, Howardia, Law, Security and Terrorism
. 16 Comments

One of the most striking things about the Rudd era is the virtual disappearance of terrorism as a political issue. Aside from a passing reference in his 2020 Summit introductory speech, I have barely heard the words mentioned. While this can be partly attributed to the passing of time, it’s not the only reason. Look at what’s happening in the UK, where Gordon Brown has just bribed and blackmailed a bill authorizing 42 days of detention without charge for terrorism suspects through the Commons, despite widespread rebellion from Labour backbenchers.

The details of this grubby bill, and the tortuous process of getting it through the Commons, can be read at length at the Guardian, for those interested. In short, even the police and intelligence services (who never see an additional power they don’t like) seem remarkably unenthusiastic about the idea; the head of MI5 has even publicly stated that they haven’t requested it. The odds of it actually becoming law are not particularly high, either; the Lords will likely block it, and a court challenge is highly likely (and stands a good chance of succeeding). Regardless of the idea’s merits, however, Gordon Brown thinks he’s going to get a desperately needed win with the wider British public.. The Guardian quotes a poll with 69% of the British public approving the new measures.

It’s a moderately interesting hypothetical whether similar “tough on terrorism” laws would be a political winner in Australia at the moment. I’m very, very glad that Australian Labor don’t seem interested in finding out.