Hurricanes...

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chlamor
Posts: 520
Joined: Tue Jul 18, 2017 12:46 am

Hurricanes...

Post by chlamor » Sat Feb 16, 2019 10:34 pm

It is as if a titanic natural catastrophe has occurred: a gargantuan hurricane... a super volcano... an earthquake large enough to push California into the Pacific and submerge Japan...

And what really happened? Nothing at all. "The productive forces" have simply come into contradiction with "the social relations". The social system has broken down and even here, no new wars are seen or cataclysmic events detected. It is a 150 year old story, played out as if nothing had changed and nothing learned. With the return of that story, decades of assumptions, conclusions and "ideology" are flushed, all at once, into the plumbing. The social hierarchy, laboriously built of sand, faces high tide. Talk the ocean out of rising, if you can...

A new era is dawning... inexorable and irresistible. It is left to the many to try to clean up the debris before the next winds blow.

Yet, it was not nature which did this. Conscious or not, there are those who were responsible - they have a name.
And, they will do it again...

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Those who would ignore history......

Course it ain't ignorance.....

Ya think these Chicago gurus actually believe tthe crap they spew? Their patrons, maybe, but these guys gotta have some smarts, right? If a blind pig can find an acorn, why can't they?

Do they lie in bed thinking, "Fuck! Marx was right."?

Don't know what's worse.

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Anax's Mr Anonymous article was all about showing they're the only dopes who DO believe it lol

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Dunno Kid, mebbe they're just liars who produce what's necessary to please their masters.

Ain't sayin' that's definitively the case, but a possiblity, in some cases anyway. Now once ya get a little down stream, that's where the true believers school.

Just a thought.

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George Frideric Handel's first love was always Italian opera, especially the light frivolous kind populated by castrati. It was a disaster for him, with virtually every piece a flop and every venture a money loser. The anything-but-religious opera fan moved to London and wrote somber religious oratorios for the newly religious sensibilities of the silly British aristocracy. He made a fortune doing it and in the process, he also built a reputation as the "greatest composer who ever lived" according to Beethoven. Bach said that he would want to be Handel if he were not already Bach.

Much later, Rossini, who was great at Italian opera and who made one of the biggest musical fortunes of his time doing it, was rumored to be approaching the status of the greatest living composer before he was 40. Instead, he decided that he had made enough money, quit, never wrote another note, and threw a party for the rest of his life. It appears he didn't really like music all that much.

It was a fucking job. Some of the Libertarian dipshits believed it, some didn't, and some would have written marketing copy for money. The Keynesians are no better and no more accurate. They simply got paid for their opinions.

That old drapery salesman, Volker, and his "friends" were the real active agents. They created demand and "supply" came from outta thin air. The same goes for the asshole politicians who suddenly "discovered" Hayek or whomever. It was all a symbiotic convenience and, retrospectively, it will all seem meaningless and trivial - a footnote to a footnote:

NOTE: The bombastic flea made a minor reputation at the turn of the 20th century, claiming to refute Karl Marx when there was a ready market for such ideas. His disciples later made a lot of money selling that "refutation"... until life refuted them.

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Won't Volker, in the final analysis, be regarded as little more than an automaton himself? I mean, all he did was solicit into being the ideas whose time had arrived..

At first I thought your sentence read "Volker and co created supply and demand out of thin air". I was really gonna have to give that one a thorough going over lol

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Didn't know that about Rossini, I like his stuff right well..

Well, I think that there's growing demand for something coming up maybe soon, something completely different. And if things keep going in the same direction at the same rate it's going to be some serious deep shit, though I'm not sure they can can bandagec this thing for a while and stave off Ragnarok for a while more.

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In the social production of their life, men enter into definite relations that are indispensable and independent of their will, relations of production which correspond to a definite stage of development of their material productive forces. The sum total of these relations of production constitutes the economic structure of society, the real foundation, on which rises a legal and political superstructure and to which correspond definite forms of social consciousness.

The mode of production of material life conditions the social, political and intellectual life process in general. It is not the consciousness of men that determines their being, but, on the contrary, their social being that determines their consciousness.

At a certain stage of their development, the material productive forces of society come in conflict with the existing relations of production, or — what is but a legal expression for the same thing — with the property relations within which they have been at work hitherto. From forms of development of the productive forces these relations turn into their fetters.

Then begins an epoch of social revolution.

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The next shoe drops...


"Consumer spending" was down last month... way down. See, the domestic market was staying up even as real wages were falling and the way that this was being maintained was by "transfering" home equity into the consumer markets and as long as real estate values were going up... you know the story.

Real estate didn't go up forever and the banks tanked and now there ain't no more "loans" so that people can keep buyin' and... There is a new avalanche startin' on top of the mountain and the last one hasn't even really hit yet - except on television.

Next comes "THE WORLD MARKET", wherein we find out that 80% of U.S. investment in China was for the purposes of producing shit for the U.S. domestic market because "globalization" ain't exactly real - well, maybe for capital but not for consumer shit which is still only for the "advanced countries" plus a tiny, tiny, sliver of a mostly dirt poor, rest-of-the-world... so what to do, what to do?

Meanwhile, real people are getting slammed and will soon start to die, in numbers far exceeding the already serious "norm"... and, and there are gonna be shoes everywhere.

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47% of the world is basically "negligible" since they "enjoy" only 19% of world GDP.

The one thing that strikes me as off in many analyses is the idea -- stated or implicit -- that there is something inherent in credit or "the finance sector" that makes them prone to cataclysmic crisis while perhaps otehr "sectors" are either immune or much less at risk of.

To me this is just another Naomi Klein-style spin -- as though instead of a crisis of capitalism, its the unsustainability of "finance capital". The crisis is within capitalism itself and no fucking amount of "recapitalizing" banks can fix that.

In fact, as we discussed recently its not even clear what a "sector" of the economy means anyway. Who's NOT knee deep (or worse) in finance these days?

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Seems like the options are getting sparse. What else might they squeeze those great honking profits out of, maybe marketing air or soylent green?

When ya run out of carrots there's always the stick.

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NY Times: Paulson Handed Bank CEO's One Page Document, Told Them in "blunt terms" that they had best "sign it before leaving the room"

Editor's Note: Sounds like it took three-and-a-half -hours for Paulson to read to the less enthusiastic CEOs what's in their "control file". Emphasis mine:

The chief executives of the nine largest banks in the United States trooped
into a gilded conference room at the Treasury Department at 3 p.m.
Monday. To their astonishment, they were each handed a one-page
document that said they agreed to sell shares to the government, then
Treasury Secretary Henry M. Paulson Jr. said they must sign it before they
left. The chairman of JPMorgan Chase, Jamie Dimon, was receptive, saying
he thought the deal looked pretty good once he ran the numbers through
his head. The chairman of Wells Fargo, Richard M. Kovacevich, protested
strongly that, unlike his New York rivals, his bank was not in trouble
because of investments in exotic mortgages, and did not need a bailout,
according to people briefed on the meeting. But by 6:30, all nine had signed
— setting in motion the largest government intervention in the American
banking system since the Great Depression . . . Mr. Paulson, according to
his own account, presented his case in blunt terms . . . "In a relatively
short period of time, people came on board.", he said . . .

Yahoo News: Like a Real Life Don Corleone, Godfather Paulson Made CEOs an "Offer they can't refuse" . . . "This smacks of straight gangsterism"

The day after the news about a watershed change in American capitalism,
the story behind the story of how Hank Paulson forced the nations top 9
banks to take capital is coming to light. After a discussion of the state of
the banking system and economy, the bankers were then unceremoniously
handed a one-page term sheet outlining Paulson's plan. The bank CEOs
"weren't allowed to negotiate," The WSJ reports. "Paulson requested that
each of them sign. It was for their own good and the good of the country,
he said, according to a person in the room." In sum, Hank Paulson made
the bank CEOs an offer they couldn't refuse -- like a real Don Corleone.

William Engdahl: Behind the Panic, There is a Massive Financial War Being Fought Over Control of the Big Banks

. . . in every major U.S. financial panic since at least the Panic of 1835, the
titans of Wall Street - most especially until 1929, the House of JP Morgan -
have deliberately triggered bank panics behind the scenes in order to
consolidate their grip on US banking. The private banks used the panics to
control Washington policy including the exact definition of the private
ownership of the new Federal Reserve in 1913, and to consolidate their
control over industry such as US Steel, Caterpillar, Westinghouse and the
like. They are, in short, old hands at such financial warfare . . . Now they
must do something similar on a global scale to be able to continue to
dominate global finance, the heart of the power of the American Century.

Mike Ruppert: The Financial Elite are Planning an Intentional Shutdown of the Economy so They Can Start Seizing Everything in Sight

This move, announced today, is absolute confirmation for me that this is
an intentioned shut down of the economy. Each bank or financial institution
that the Treasury buys into will give it (and Goldman Sachs) the power to
shut each bank down and to decide when it shuts down. It couldn't be
more transparent. They're going to turn out the lights in an orderly fashion
and it's obviously an attempt at a controlled fast crash. They've only got
three months left in office. That would essentially make Barack Obama an
economic janitor employed by the same firm. I can just hear Bush and
Cheney cracking a joke about it . . . Bear in mind that everything that
happened today happened in absolute silence about Citigroup. The latest
there is that there is supposed to be a court hearing next week about a
suit Citi may bring against Wells and Wachovia. Meantime, Citigroup has
waived all claims to acquiring any of Wachovia's assets (cash deposits). My
suspicion is that out of fear Citi is hanging back for any kind of discussion
about its stability. Then again, they just might be waiting for the right
moment to break the bad news to achieve the worst effect: capitulation.

Counterpunch: Paulson Deploying Economic "Shock and Awe" in Hopes of Achieving Full Spectrum Global Financial Domination

We have seen the collapse of Lehman Brothers as sacrificial wolf, heard
further sabres being rattled in form of AIG, Freddie Mac and Fannie Mae,
and bailout, or rescue gone through on the basis of fear and plunging
markets. The public coffers have been prised opened further as to plan.
Now the second phase of Economic Blitzkrieg is to begin, and the bad news
is that as in total war, the citizen is no more than mere fodder to bomb.

Vanity Fair: James Howard Kunstler Has Been Right All Along, "The machinery of U.S. capital is now a smoking wreckage"

It was James Howard Kunstler, the author of The End of Suburbia and The
Long Emergency, who warned with scourging wit and rococo imagery in his
weekly online column that high gas prices, suburban sprawl, decaying
infrastructure, the machinations of hedge-fund greedheads, and Wall Street
necromancy were converging into a Hurricane Katrina–size "cluster****”
that would deform the social and political landscape. In his August 25
column, Kunstler wrote, “I’m rather convinced that the carnage on the
money scene will be so extreme this fall that the nation will seem to have
been transformed from a superpower to a basketcase before November
4th, and that the blame for this state of affairs will be blindingly obvious:
the people in charge the past eight years looted the treasury, destroyed
the currency, and left the machinery of capital a smoking wreckage.”
Within a month, the carnage Kunstler envisioned not only got worse but
gained velocity as mortgage giants Freddie Mac and Fannie Mae required
an emergency federal bailout, fabled Merrill Lynch disappeared into the
maw of Bank of America, Lehman Brothers went belly-up, A.I.G. was
rescued, and the Dow lost 500 points in one day, the worst loss since 2001.
Billions of dollars of bad loans devoured by boll weevils, thousands of well
-paying jobs liquidated in a single stroke, stock portfolios turning into
scarecrows before one’s eyes, and who knew what awaits the next hill?

321 Gold: Why the Price of Gold is Dropping Even Though Gold Dealers are Experiencing Shortages and Runs on Bullion

Meanwhile, real investors in real gold are enjoying their shopping spree -
except that the spree turned into a treasure hunt as the shelves and
display cases of gold dealers look more and more like the supermarket
shelves in the old Soviet Union - bare. This is the only 'bare-market' in real
gold the world will see for a long, long time to come. With this split, this
disconnect, between Comex illusion and gold reality, one thing or the other
will have to give, and it won't be physical gold that gives. The system built
up around Comex-gold as being a price-setting mechanism for real gold
plays right into the hands of the financial establishment. The establishment
depends for its (now increasingly meager) existence on the illusion that
gold "isn't living up to its promise" as a real inflation and disaster hedge.
The implication, of course, is that investors might as well stay in the
computer blip and paper world. As the Comex gold price illusion drops,
many retail investors are still persuaded to keep their money circulating in
the paper world, and that ultimately feeds the system. Of course, by now
that 'feeding' mechanism looks more like life-support, but try and unhook
someone on life-support. The results are dramatic, immediate - and final.

Bloomberg: Perth Mint Doubles Output as Investors Start Hoarding Bullion

The Perth Mint, producer of 10 percent of the world's bullion, doubled
output in the past six months, joining a global push to boost production as
investors seek protection from the credit crisis. Perth Mint sold so-called
Kangaroo and Nugget coins weighing a total of 62,630 ounces in the three
months to Sept. 30, compared with 154,501 ounces for the 12 months to
June 30, senior manager Bron Suchecki said in an interview from Perth,
Australia yesterday, adding there's been a surge in "moms and dads''
buying over the counter in the past three months. "It's reflecting a real
breakdown in trust in financial products,'' Suchecki said at the mint. "People
aren't thinking 'how do I grow my wealth' but 'how do I protect it.'' "People
are rushing to buy gold purely as a safe haven,'' Jonathan Barratt, director
of Commodity Broking Services in Sydney, said in a phone interview today.
"The premiums at the moment for physical gold are through the roof . . ."

Business Week: Iceland's Stunning Collapse Sending Massive Shockwaves Through Worlds of International Finance, Geopolitics

To avert financial disaster, the country — which is a founding member of
NATO — may turn to Russia for help. The Russian government has said it
would consider lending Iceland $5.5 billion. "We have not received the kind
of support that we were requesting from our friends," Haarde said. "So in a
situation like that one has to look for new friends." . . . the ramifications of
Iceland's meltdown extend far beyond the tiny Nordic country. Over the
past decade, Icelanders have taken advantage of low interest rates offered
by the country's banks to finance rapid expansion beyond the island nation
in numerous industries . . . Offering higher interest rates than counterparts
in Britain, Icelandic banks have attracted huge inflows from UK investors in
recent years. Since its launch in October 2006, Icelandic internet bank
Icesave, owned by Landsbanki, attracted $7 billion in deposits from 300,000
British retail investors. When the bank went bust, British Chancellor of the
Exchequer Alistair Darling was forced to step in. On Oct. 8 he pledged to
guarantee the deposits of all British retail investors in Landsbanki and its
subsidiaries. The British government says it plans to sue Iceland to recoup
at least some part of the savings of British customers in Icesave . . .

Time Magazine: Russia is Bailing Out Iceland so It Can Establish a Bridgehead to Grab the Oil Deposits in the Arctic

Why would Russia promise $5.4 billion to bail out Iceland, when Iceland's
traditional allies weren't offering the money? After all, Russia has its own
grave financial issues to deal with. Does the country really expect to be
paid back in "the famous Icelandic herring, popular in Russia since Soviet
times?" as Victor Tatarintsev, Russian ambassador to Iceland, noted in an
interview on Russian television. More likely, this act of benevolence is being
viewed as a way for Russia to help secure a bridgehead for an advance into
the Arctic regions to claim the vast hydrocarbon and mineral deposits
there. Iceland also happens to possess a once vital NATO base, which has
been in mothballs since 2006, and the Russians may be eyeing that as well.

Economist: How a Banking Crisis Brought Iceland to the Brink of Collapse

One word on every tongue in Iceland these days is kreppa. Normally it
means to be "in a pinch" or to get into a scrape", but when it is applied to
the economy, it becomes "financial crisis". In time kreppa may become the
word that conjures up the disastrous meltdown that is now taking place in
the country’s economy. Iceland’s kreppa has been long in the making and,
at least for some, widely anticipated. The economy has wobbled a few
times in recent years. But few could have predicted the speed or ferocity
with which the country’s banking system, credit rating and currency
collapsed under the pressure of the credit crisis. Iceland has been growing
smartly in recent years. The country has low unemployment and income
per person is somewhat above the average in the European Union. Huge
investments in green energy and aluminium smelting have drawn inflows of
foreign investment and promise to underpin exports for years to come. But
on these sound foundations, Iceland has built a financial house of cards . . .

Bloomberg: Panicked Icelanders Rushing to Exchange Currency for Food

After a four-year spending spree, Icelanders are flooding the supermarkets
one last time, stocking up on food as the collapse of the banking system
threatens to cut the island off from imports. "We have had crazy days for
a week now,'' said Johannes Oluffsson, manager of the Bonus discount
grocery store in Reykjavik's main shopping center. "Sales have doubled.''
Bonus, a nationwide chain, has stock at its warehouse for about two
weeks. After that, the shelves will start emptying unless it can get access
to foreign currency, the 22-year-old manager said, standing in a walk-in
fridge filled with meat products, among the few goods produced locally.

Time Magazine: Arms Trade Doing Brisk Business as Economy Crashes

Need to start a war? No problem. While stock markets gyrate and financial
institutions (and even whole countries, like Iceland) teeter on bankruptcy,
one global industry is still drawing plenty of high-end trades and profits:
weapons. Researchers say arms trading has boomed in the decade since
the Angolagate scandal was uncovered. That's partly due to heightened
supply. As ex-Soviet republics emerged as economic actors in their own
right, several countries developed national arms industries, refitting
weapons from their stocks and manufacturing new weapons of their own.
Those industries have taken off in recent years. Ukraine has about 6 million
light weapons from Soviet stockpiles, and has modernized tanks, missiles
and other weaponry, says Hugh Griffiths, an expert on illicit weapons at the
Stockholm International Peace Research Institute. A dramatic example of
Ukraine's reach is playing out off the Horn of Africa, where a major
shipment of Ukrainian weapons, including 33 T-72 tanks, was hijacked by
Somali pirates and remains a vexing military and diplomatic problem . . .

Economist: Shock-and-Awe for the Landscape of American Finance

The landscape of American finance has been radically changed. The
independent investment bank—a quintessential Wall Street animal that
relied on high leverage and wholesale funding — is now all but extinct.
Lehman Brothers has gone bust; Bear Stearns and Merrill Lynch have been
swallowed by commercial banks; and Goldman Sachs and Morgan Stanley
have become commercial banks themselves. The "shadow banking
system" — the money-market funds, securities dealers, hedge funds and
the other non-bank financial institutions that defined deregulated American
finance — is metamorphosing at lightning speed. And in little more than
three weeks America’s government, all told, expanded its gross liabilities by
more than $1 trillion—almost twice as much as the cost of the Iraq war.

Fortune Magazine: Crisis Pushes Jefferson County to Brink of Bankruptcy

For months now, Riley and other leaders in Alabama have been battling to
avert what appears almost certain - that Jefferson County will file for
Chapter 9 protection, in what would be the largest municipal bankruptcy in
our nation's history. The county has fallen hopelessly behind on payments
to service the $3.2 billion it borrowed - on reckless terms - over the past
decade to build a new sewer system . . . Every decade or so, something
big and scary does happen in the normally staid world of public finance:
There was a near miss in the '70s when New York City almost went broke;
in the '80s the Washington Public Power Supply System defaulted on $2.25
billion in loans when it stopped construction of two nuclear power plants;
and California's Orange County went into Chapter 9 in the '90s, after the
county treasurer made bad bets on interest rates and lost $1.6 billion. But
the saga of Jefferson County stands apart. Unlike previous municipal
meltdowns, it is a financial disaster that was to a large degree invented,
packaged, and sold by Wall Street. And there are striking parallels to the
wider credit crisis that has enveloped the financial world - with overeager
borrowers, willing enablers, and dangerously complex financial instruments.

Economist: California Rapidly Running Out of Money to Pay the Bills

The world’s eighth biggest economy has two problems, both stemming
from the economic downturn. First, it is finding it hard to raise enough
money to pay the bills. Under normal circumstances the state would sell $7
billion in bonds to tide it through until April, when income taxes flood in.
Thanks in part to the delayed budget, the state has been forced to go to
the bond markets at a time when investors are wary of everything but
Treasury notes. If the credit markets gum up even more, the state may
seek relief from the Federal Reserve or from its public pension funds . . .

Christian Science Monitor: States Begin Lining up for Emergency Bailouts

How California fares with a $4 billion short-term bond sale this week will
help answer a key question looming over the current US financial crisis: are
traditional credit markets so frozen that states won't be able to raise
revenues to tide them over their cash crunch? The practice of selling
short-term bonds is used regularly by at least a dozen US states, and
occasionally by several more, to keep state programs and services running
smoothly year round. Because tax income is not steady throughout the
year – far more revenue comes in from September through December
than January through March – California and others borrow short-term to
pay their bills when revenues are temporarily insufficient. Now, with states
facing the same problem faced by millions of businesses – tightening credit
markets – at the same time revenues are sinking, many budget officials
are worried that they may not be able to borrow when they need to . . .

UK Guardian: Victorville, California Goes From Desert Boom Town to Bust

Victorville was a desert boomtown. Up until a year ago, it was the second-
fastest growing city in the United States. There are still signs of the boom
everywhere. Driving into town, there are signs pointing to developments,
and as you get closer, people stand on the street corners waving signs to
try to entice buyers to model homes. But now, 11% of the homes in the
city are in foreclosure, and the city recently was part of a $13 million grant
to help buy some of the homes before they are abandoned. New building
has come to a standstill. They can't build homes because the foreclosed
homes are selling for less than the cost to build a new home, he said.
That's hit the construction industry. High food and petrol costs have also
hit the economy. The spike in petrol prices made it prohibitively expensive
for people who commute 50 plus miles to work in Los Angeles, and that
might make it difficult for people to move there unless they work locally.

Peter Schiff: "Our long ride on the global gravy train has come to an end"

More than just a mere liquidity or credit crisis, the current financial storm
represents the death throes of the old global economic order, and perhaps
the birth pains of a new one. The sun is setting on the borrow and spend
culture that has defined us for a generation. Our long ride on the global
gravy train is finally coming to an end, and once it does nothing will be the
same. The sooner we come to grips with this the better . . . The intention
of all these daily federal interventions is to keep the credit spigots open so
Americans can go even deeper into debt to buy more stuff they can't
actually afford. This should be clear enough to anyone who listens to what
our leaders are saying. When speaking about the need for an even larger
fiscal stimulus package, Barney Frank (D-Vermont), chairman of the House
Financial Services Committee, said, "We have to prop up consumption."

Alternet: "The life you knew, the one you took for granted, is vanishing"

Among my somewhat over-the-hill crowd -- I'm 64 -- there's one thing
friends have said to me repeatedly since the stock market started to
tumble, the global economic system began to melt down, and Iceland went
from bank haven to bankrupt. They say, "I'm just not looking. I don't want
to know." And they're not referring to the world situation, they're talking
about their pension plans, or 401(k)s, or IRAs, or whatever they put their
money into, so much of which is melting away in plain sight. Think of it as a
pragmatic acknowledgement of reality at an extreme moment, but also as
a statement of denial and despair. The point is: Why look? The news is
going to be worse than you think, and it's way too late anyway. This is
what crosses your mind when the ground under you starts to crumble.
Don't look, not yet, not when the life you know, the one you took for
granted, is vanishing, and there isn't a damn thing you can do about it.

Counterpunch: Rescue for the Few, Debt Slavery for the Rest of Us

We are now entering the financial End Time. Bailout "Plan A" (buy the junk
mortgages) has failed, so has "Plan B" (buy ersatz stocks in the banks to
recapitalize them without wiping out current mismanagers) is fizzling, and
the debts still can’t be paid. That is the reality Wall Street avoids
confronting. “First they ignore you, then they denounce you, and then they
say that they knew what you were saying all the time,” said Gandhi. The
same might be said of today’s overhang of debts in excess of the
economy’s ability to pay. First the policy makers pretend that they can be
paid, then they denounce the pessimists as spreading panic, and then they
say that of course students have been taught for four thousand years now
how the "magic of compound interest" keeps on doubling and redoubling
debts faster than the economy can squeeze out an economic surplus . . .

Washington Post: Workers at Indian Debt Collection Call Centers Shocked at Depth of Americans' Collective Financial Ruin

Few places in India absorb and imitate American culture as much as call
centers, where ambitious young Indians with fake American accents and
American noms de phone spend hours calling people in Indiana or Maine to
help navigate software glitches, plan vacations or sell products. The
subculture of call centers tends to foster a cult of America, an over-the
top fantasy where hopes and dreams are easily accomplished by people
who live in a brand-name wonderland of high-paying jobs, big houses and
luxury getaways. But collection agents at this call center outside New Delhi
are starting to see the flip side of that vision: a country hobbled by debt
and filled with people scared of losing their jobs, their houses and their
cars. In the past, debt-saddled customers were often annoyed by calls
from the open-air office at Aegis Services. But now they seem depressed,
defeated. Even the men sob into the phone. Many of the employees say
they are flabbergasted at how widespread the financial ruin appears . . .

NY Times: Americans Increasingly Hounded by Debt Collectors from India

Relinked in light of today's Washington Post article about call centers in India.

Americans are used to receiving calls from India for insurance claims and
credit card sales. But debt collection represents a growing business for
outsourcing companies, especially as the American economy slows and its
consumers struggle to pay for their purchases. Armed with a sophisticated
automated system that dials tens of thousands of Americans every hour,
and puts confidential information like Social Security numbers, addresses
and credit history at operators’ fingertips, this new breed of collectors is
chasing down late car payments, overdue credit card debt and lapsed
installment loans. Debt collectors in India often cost about one-quarter the
price of their American counterparts, and are often better at the job . . .

Yahoo News: As Crisis Bites, More Americans Turning to Food Stamps

Living on food stamps is a devastating reality for millions of Americans --
and the numbers are growing to alarming levels. The number of food
stamps being distributed in the U.S approached a new record this summer
and promises to reach a new peak with repercussions of the financial crisis
starting to bite. More than 29 million Americans received food stamps in
July, an increase of close to one million over just three months earlier. The
latest figures do not count the new requests for assistance in September,
when several financial institutions collapsed, stock values plunged, housing
foreclosures soared, and job losses spiked to the highest level of the year.

Alternet: Five Tips for All the Newly Minted American Paupers

Little did I know that when I lost everything last year, I was doing
research. At the time I thought it was just stupidity or bad luck or both.
But now that the economy's crashing, it turns out I've been out there
gathering valuable tips for millions of new paupers. And let me clarify, I'm
talking real poverty. My wife and I fell through many layers of poverty in a
few months. First we revisited the genteel poverty known to graduate
students, the sort of poverty where you have scary dreams about the rent
and eat a simple, wholesome diet toward the end of the month. But we fell
right through that into the sort of Dickensian privation that spoiled first
worlders like me never expected to experience. That's the kind of poverty
a lot of people are going to be experiencing soon -- and I'm here to tell
you, it can happen here and it can happen to you. And it's remarkably
unpleasant. You may be saying "Duh!" here, but you're probably not
magining the proper sort of unpleasantness. So I'll try to lay out what to
watch for, how to hunker down when it's not just a matter of cutting back
or selling your second car but having no money for heat or food . . .

Alternet: 401ks the Contemporary Version of Get Rich Quick Schemes

The essential fallacy of the 401(k) has been exposed. It took a historic
market collapse -- one that threatens to impoverish workers already in
retirement and those who are nearing it. But then, crushing hardship is
often what's required to usher out an era of unconscionable greed. The
pitch for the 401(k) was a contemporary version of the get-rich-quick
scheme: The promise of strolling along a sun-dappled beach in retirement
would be realized with ease, so long as workers regularly contributed
modest amounts to the accounts, then let the magic of the market work.

Business Week: Now Wall Street Wants to Get Its hands on Your Pension

Editor's Note: Relinked at reader request. When the pension funds collapse the way housing prices have and workers start dropping dead because they can't afford necessities, the good news for the companies is they will still manage to make money. "How can that be?" you ask. Well most of these compannies have taken out what's known as "Dead Peasents Insurance" (DPI) on their workers. DPI happens to makes up 20% of all life insurance policies sold each year:

The folks who brought you the mortgage mess and the ensuing hedge fund
blowups, busted buyouts, and credit market gridlock have another bold
idea: buying up and running troubled corporate pension plans. And despite
the subprime fiasco, some regulators may soon embrace Wall Street's
latest scheme. The Treasury Dept. on August 6th offered a blueprint for
lawmakers to allow "financially strong entities in well-regulated sectors" to
acquire pension plans , after the IRS ruled that the concept needed
legislative approval. "The Administration's proposal says these deals should
only be permitted when the acquiring entity has a higher credit-rating than
the seller," says Charles Millard, director of the Pension Benefit Guaranty
Corp. (PBGC), the federal insurer of last resort of corporate pension plans.
Breaking News: Wednesday October 15th, 2008


=========

Rick Kuhn is a pretty sharp observer but in some cases he clearly gets Grossman wrong and other times he needs to remember a simple rule "all these guys read Marx so rather than read them, go read Marx". Kuhn has obviously read Marx but could stand to inject more Marx and less Grossman into his analysis.

Kuhn quotes this from Grossman:

the very laws of capitalist accumulation impart to accumulation a cyclical form and this cyclical movement impinges on the sphere of circulation (money market and stock exchange). The former is the independent variable, the latter the dependent variable.
He says that circulation of capital (money markets) is the independent variable.

But then he later says this:

So those who own and manage corporations often prefer to invest in speculative financial assets rather than activity that produces real goods that people need. Most of the transactions on financial markets are a zero sum game: players only gain at each other's expense. While the US finance sector only realised 10 per cent of total corporate profits in 1980, the figure was 40 per cent in 2007.

So developments in the real economy explain the speculative frenzy that led to the credit crunch. Capital flocked to high-return, high-risk investments in the unproductive financial sector because profit rate in the real economy was low. The financial crisis is bringing that underlying problem of a low profit rate to the surface.
Its not an egregious error but Kuhn should know better so I can't quite write it off as a slip of the tongue/pen. Finance IS part of the REAL economy. He's right that it is merely a way of more favorably divvying profits up -- from the perspective of the "winners" of course -- but as the Grossman quote says circulation is the primary concern. Marx called stocks, bonds and other "claims to future profits" (now called "revenue streams" I guess) *fictitious capital*. But fictitious doesn't mean fake, it just means that its not directly palpable. But the exchange value IS realized. NO capital exists except that which can be realized as exchange value. There is no distinction between the real and financial economy.

If Kuhn is right on this issue, then he is wrong about everything else in article. Because in that case he tacitly AGREES with Hilferding and Rudd and the entire cast of miscreants on display in this article.

In fact, Kuhn's words belie his own analysis even further if we consider the above sentence: invest in speculative financial assets rather than activity that produces real goods that people need.

But I am not idly parsing phrases just for the hell of it because here is what Kuhn, channeling Grossman, says just a bit later:

Capitalism has a tendency to break down that is expressed in deep crises like the current one. Grossman argued that

capitalist production is characterized by insoluble conflicts. Irremediable systemic convulsions necessarily arise . . . from the immanent contradiction between value and use value, between profitability and productivity, between limited possibilities for valorisation and the unlimited development of the productive forces.

The fact that production is organised not to satisfy human needs but to make profits for the capitalist class is the ultimate cause of the system's recurrent crises.
Grossman tells us -- literally -- that capitalists never invest in producing goods that people need. Instead they invest to generate surplus value -- a profit. That IS the contradiction -- capitalists don't produce things based upon any concern for need or, more broadly, use-value. And yet all production is social -- it is produced socially, it is allocated socially. This is subtle, but is a major error of understanding on the part of Kuhn. It harks back once again to the question of whether the problem is that more use-value should be produced at the expense of speculative captal. Kuhn's lips are fiercely saying no, but his eyes are saying yes..

Further, there is a problem built into Grossman's quote as well -- he talks about unlimited development of the productive forces but this is beside the point (and much debated). It is the capitalist imperative to constantly develop the productive forces that matter, weighed against the limited possibilities for valorization.

But that is really only the beginning of the argument -- what does limited possibilities for valorization mean and how does capitalism resolve that crisis? How does that connect with Imperialism? How does that connect with the cyclical crises Grossman's quote cryptically refers to above?

By failing to answer -- or even address -- these questions we're ultimately left with Kuhn's assertion of Grossman's assertion that capitalism has a cyclic boom/bust nature.

Not good enough

http://mrzine.monthlyreview.org/kuhn171008.html


The Problem Is Capitalism, Not Just the Banks
by Rick Kuhn

Don't panic! That's the panicked cry of governments and central bankers around the world. Meanwhile their behaviour shows that they expect a very, very deep recession.

After repetition over more than a quarter of century -- by mainstream economists, ministers, the World Bank and International Monetary Fund -- neo-liberal platitudes have been forgotten. Today, we just aren't hearing about the efficiency of markets, the importance of balanced budgets or, better, budget surpluses.

Bush in the USA and Brown in Britain have been prepared to shell out billions to prop up the financial system. The pattern is being repeated, with local variations across the developed world.

Less than a year ago, before the election that made him Prime Minister, Kevin Rudd reassured Australian business that he was 'a fiscal conservative'. But the Labor Government decided valour was the better part of discretion by speeding up expenditure on public infrastructure from the Future Fund. Again, this was designed to reassure corporate Australia: Labor will do whatever it takes to secure growth and, especially, their profits.

In the face of the crisis, a prolonged and careful assessment of how to spend the billions of dollars in the Fund on competing projects was set aside. It was necessary to get the money flowing to make up for the anticipated slow-downs in Australian investment, consumption and income from the export of minerals to China.

The Australian Reserve Bank Board, on which the head of Treasury sits alongside a majority of corporate heavyweights, has the same fears as the Government. So it slashed the official interest rate by a whole one percent on 7 October, for the first time since 1992.

Australia is following a pattern set in the United States, Britain and other countries in Europe.

This looks like Keynesian economics, where the government steps in to sustain growth, to make up for the deficiencies of markets. But the massive policy shift underway is more than Keynesian, as states are taking over some very large businesses.

Governments in the most prosperous countries in the world have been providing tens and hundreds of billions of dollars to bail out private and state banks. In the USA, Britain, Belgium, Luxembourg, the Netherlands and Iceland, they have nationalised failing banks.

Will these policies work? It's unlikely.

After the pit of the Depression of the early 1930s, the US economy stagnated for a couple of years and then entered a new downturn. World War II not President Franklin D. Roosevelt's 'New Deal" economic policies, really ended the Depression.

Hard-core Keynesian policies never had to be applied during the 1950s and 1960s because economies were chugging along nicely for other reasons. Instead the concern of economists during that period was 'fine-tuning' or, more accurately, tinkering with policy.

When the long post-war boom ended in the mid 1970s and the Keynesian heavy guns were rolled out their impact was more that of a fart than an explosion. There was rising unemployment and inflation, which was supposed to be impossible according to the Keynesian orthodoxy of the period.

Already Republicans in the United States and conservatives elsewhere are expressing concerns about creeping 'socialism', as governments take over some banks and promise to regulate the rest much more closely. There is bound to be even more overt state involvement in economic activity as the crisis deepens.

Indeed, the famous social democratic economist Rudolf Hilferding believed that it was possible for the working class to take state power by parliamentary means and to overcome the pattern of booms and slumps on the road to socialism. Twice during the 1920s, he was Germany's Finance Minister. He argued that the growing domination of production by larger and larger corporations meant that a government putting in place a forthright program of reform could achieve this by managing the capitalist economy and particularly through state control over the banking system.

It must be noted, however, that neo-liberal policies of liberating markets, privatising, corporatising and contracting out state activities were themselves state policies, mainly designed to put the pressure on workers who actually produce the wealth on which profits are based. In Australia, the conservative Howard Government's market-freeing activities went hand-in-hand with a bigger role for government in policing the population in general and unionists in particular.

Even heavy-duty state intervention is unlikely to solve the world's current economic problems for two reasons.

First, the problems are not simply financial. As Henryk Grossman put it in 1929, before the stock market crash,

the very laws of capitalist accumulation impart to accumulation a cyclical form and this cyclical movement impinges on the sphere of circulation (money market and stock exchange). The former is the independent variable, the latter the dependent variable.

In other words, the way capitalist production is organised necessarily gives rise to economic crises. Developments in production directly and indirectly affect the financial system.

More 'transparency' and better regulation of banking won't deal with the underlying issue which is low average rates of profit across the global economy.

During the long boom after World War II, capital intensive investment meant that outlays on employing workers declined compared to business spending on machinery, equipment, buildings, raw materials and other goods used in production.

Yet it is only the labour of workers that creates new value. The rate of profit fell and the period between the mid 1970s and the early 1990s saw the deepest global recessions since the 1930s. Profit rates have recovered somewhat, largely thanks to neo-liberal policies that squeezed more work out of employees and, especially in the United States, led to declining real wages.

Even so, the rate of profit did not recover to the levels of the long boom to the early 1970s.

So those who own and manage corporations often prefer to invest in speculative financial assets rather than activity that produces real goods that people need. Most of the transactions on financial markets are a zero sum game: players only gain at each other's expense. While the US finance sector only realised 10 per cent of total corporate profits in 1980, the figure was 40 per cent in 2007.

So developments in the real economy explain the speculative frenzy that led to the credit crunch. Capital flocked to high-return, high-risk investments in the unproductive financial sector because profit rate in the real economy was low. The financial crisis is bringing that underlying problem of a low profit rate to the surface.

Capitalism has a tendency to break down that is expressed in deep crises like the current one. Grossman argued that

capitalist production is characterized by insoluble conflicts. Irremediable systemic convulsions necessarily arise . . . from the immanent contradiction between value and use value, between profitability and productivity, between limited possibilities for valorisation and the unlimited development of the productive forces.

The fact that production is organised not to satisfy human needs but to make profits for the capitalist class is the ultimate cause of the system's recurrent crises.

Financial regulation and even an expansion of state ownership, which conservatives and supporters of traditional social democracy label 'socialism', cannot overcome this tendency. Governments will soon demand that 'everyone' tighten their belts. Unemployment will rise, while employers and governments try to boost profits by driving wages down.

In Australia, this will be easier because Rudd has promised not to touch key elements of John Howard's industrial relations laws. These include secret ballots for strikes, restrictions on union officials' ability to talk to their members at work, and the ban on 'pattern bargaining', that is, industry-wide campaigns. As the crisis deepens the priority the Government places on subsidising business will increase and it will be under pressure to cut back the public services, and spending on health, education and welfare that benefit the Australian working class which is roughly two thirds of the population.

The alternative is a real socialism in which workers replace production for profit with production to fulfill human needs and the despotic structures of all corporations with democratic control over workplaces and society as a whole. Now that neo-liberalism has ceased to be common sense, it is worth considering.

==========

There is a lot of talk here but it misses the most basic point: markets are bounded while accumulation is not. The "cyclical" nature of the circuit (or "the business cycle") stems fundamentally from this fact. Of course, markets are not fixed either, so that all of this is fluid... yet, it is common to see the boom/bust cycle as nothing other than accumulation outstripping market development, bringing in turn a shock wave in the financial superstructure built on those markets, followed by an unraveling of the mechanisms of interest and credit, the destruction of capital, the contraction and reformulation of markets, and all of it topped off with a new "boom" cycle in which new markets are conquered and old ones exploited in new ways.

The bigger problem is that while the cycle has no "micro"/"macro" formulation, that is true only from the perspective of capital as a whole. From the standpoint of national capital, two things happen:

1) It is possible to talk about "fundamental" crisis, in which market reorganization is not possible (or "acceptable") on the one hand but is also denied to others, on the other hand, through political, commercial, or military superiority. This is the charge that was leveled at the Brits before 2 world wars and also at the United States in the 1970s and today. What follows is a period of enforced stagnation OR a period of increasingly strident attempts to resolve market competition through "other means".

2) This moves us from a purely economic and largely technical formulation to a political one. Clausewitz said that war was the continuation of politics by other means. He should have added that politics is itself the continuation of economics, and in this case, of commercial competition.

In large part, it is the entrance of politics into the scene that confuses these guys... and politics is crucial (they don't call it political economy for nothin'). The U.S. problem is essentially different from the problem faced by "everyone else".

===========

To be honest, I wish I'd had seen BPs quote from the Manifesto (which off hand I would've guessed was from something else written by later Marx), because that sums it up perfectly IMO:

A similar movement is going on before our own eyes. Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells. For many a decade past the history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeois and of its rule. It is enough to mention the commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.

=========

It is as if a titanic natural catastrophe has occurred: a gargantuan hurricane... a super volcano... an earthquake large enough to push California into the Pacific and submerge Japan...

And what really happened? Nothing at all. "The productive forces" have simply come into contradiction with "the social relations". The social system has broken down and even here, no new wars are seen or cataclysmic events detected. It is a 150 year old story, played out as if nothing had changed and nothing learned. With the return of that story, decades of assumptions, conclusions and "ideology" are flushed, all at once, into the plumbing. The social hierarchy, laboriously built of sand, faces high tide. Talk the ocean out of rising, if you can...

A new era is dawning... inexorable and irresistible. It is left to the many to try to clean up the debris before the next winds blow.

Yet, it was not nature which did this. Conscious or not, there are those who were responsible - they have a name.
And, they will do it again...

Yes,a new era is dawning,both for the country,the world,and for some of us as individuals. :P This is going to be a very exciting time. The GOP is self-detsructing before our very eyes.Barring a "Bradley effect",a neoliberal,capitalist warmonger,will become president,elected both by deluded "pwogwessives",and corporate imperalists.The wars will escalate,and like The Soviet Union,a war in Afghanistan,will be the downfall of The American Empire.Only this time,we might get reeal lucky,and see the collapse of capitalism,as it has been built up ever since the time of Adam Smith.Or if nothing else,the wake of the damage,of The Obama Administration,will provide the most fertile ground for socialist rebellion,we have seen since the 1930s.

That,and some other incredible events,in my own life,in the past two weeks,give me all sorts of reasons to be cheerful.

Why i am not a Democrat in one easy lesson:

"Democrats believe in a free market."

- Nancy Pelosi September 28,2008

==========

Found here:

http://www.thebellforum.net/Bell2/www.t ... ml?t=48500

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Re: Hurricanes...

Post by blindpig » Mon Feb 18, 2019 1:12 am

and here we are eleven years later and the whole teetering mess is looking for an excuse to go Way South. Again.Lord, how long? Everything started going to shit shortly after this was written, and the Reaction began, serial color revolutions. I dunno wtf happened in W Europe. The beginning of retaliation in Latin America. We ain't playin' with amateurs. Nonetheless it seems that the ruling class, since the dissolution of the USSR, believes it's own propaganda. Their miscalculation with China becomes more apparent daily.Yet their arrogance is at a pace with their growing wealth.They seek to stomp out every vestige of resistance, but their strength while great is receding, relatively. Venezuela is the test of the moment, they must win but I think they may not.

And what are we in the USA doing?
"There is great chaos under heaven; the situation is excellent."

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Re: Hurricanes...

Post by blindpig » Fri Oct 04, 2019 8:39 pm

tragedy or farce?
"There is great chaos under heaven; the situation is excellent."

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Re: Hurricanes...

Post by blindpig » Tue May 05, 2020 4:37 pm

It's crisis time again...And be assured, #19 was only the fuse.
"There is great chaos under heaven; the situation is excellent."

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