economic crisis

Let’s have a Jubilee

economic crisis
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Let’s face it, it isn’t working, is it? All those measures the Serious People have taken since the bankers’ crisis hit in 2007 to get out of recession have failed. Now it’s not just banks, but whole countries that need to be rescued, where being rescued means that everybody suffers but the bankers and while the Greek government might push through their spending cuts, it’s at the cost of risking a new civil war. Meanwhile the housing boom and crash all over Europe has led to a lot of people with huge mortgages who’ll be fscked if they lose their jobs, many banks still have loads and loads of dodgy debts on board, while governments are standing by to pump more money into them, like just happened with Dexia, wif/when these debts turn poisonous. It’s all a big, complicated mess and nobody has a clue what to do.

Since running a post-capitalist, marxist dictatorship of the proletarian is not quite on the cards this year, let’s try something equally radical, from the bible: let’s have a jubilee. In the Jewish tradition, a Jubilee was held once every fifty years, in which all debts were annulled, land returned to the original owner and slaves were freed. We need one now, in which everybody and everything in the EU starts with a clean slate. If you have a mortgage or credit card debt: poof, it’s gone. In return, all these banks owning money to governments will have their debts forgiven while the governments itself should just default. No more debt, no more problem. We get to start over and not have to worry what “the markets” will think.

Truth will out

economic crisis, Life under Capitalism, video
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Of course this video is bagatalised, made fun off, “revealed” to be a fake, dismissed as “old news”. All of which should not distract you from its message, which is not so much what this douchenozzle says but what it means. There’s no such thing as “the markets”, there are only people who have no problem profiting from sending the whole of Europe back into recession again.

(Via Vuijlsteke.)

Why we need populist anger

Activism, economic crisis
Published on 1 Comment on Why we need populist anger

Amongst the best example of trolling your own blog I’ve ever seen, Dsquared does make one point that, if not convincing, does deserve some consideration:

However, of course, there were plenty of people who didn’t own houses in the 90s and 00s, and who thus didn’t benefit from the boom, who are suffering as a result of the recession, including the benefit claimants from whose mouths I was accused of taking the bread. Even in this case, though, I think that making a big deal about “the bankers caused this crisis/stole from us/etc” is a big mistake.

And that’s basically for the simple reason that there is no hope for egalitarian politics if you are going to build it on such weak grounds. This was the lasting contribution of Jerry Cohen’s criticism of Marx. The demands of egalitarian justice are not based in some convoluted proof that the rich have in some way stolen from the poor. The case for redistributive taxation does not rest on bankers’ bonuses being stolen goods, or even on them being undeserved. If you try to agitate for egalitarian policies based on this kind of argument, you are never going to make a strong case, because in the first place, “bankers” didn’t actually steal that money, for the most part, and secondly, if you are giving all the agency to “bankers” then you are accepting the first premis of the “wealth creators” rhetoric, and this is going to destroy you, politically, across the business cycle.

…even if it does feel like special pleading. Moreover, it sounds like exactly the sort of claptrap centrist Democrats put out whenever the hoi polloi get too uppity, that emotions and populist anger have no place in grownup politics. It’s trying to discredit genuine feelings of anger by throwing up procedural objections. It’s wrong too. Sure, populist anger at the bankers and their crimes isn’t enough to drive change, but it is necessary. If left to the financial sector and the politicians nothing will change, reasoned argument won’t work, only fear and anger will.

Because we’ve seen what happens when the financial world thinks it’s business at usual again. Only moments after they were bailed out and rescued from their own follies and criminality the banks started to complain about how they couldn’t possible be expected to pay more taxes on their unearned bonuses or actually adhere to rules that would stop another crisis. They hadn’t learned a thing from the economic meltdown because they hadn’t suffered enough. They still had their money, their power, their freedom, but for the incidental scapegoat. That obviously needs to change.

Why the Euro’s in trouble

economic crisis, Europe
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Paul de Grauwe examines how participing in the Euro makes countries that much more vulnerable to assault in the financial markets,
because they now lack control of their own money:

When entering a monetary union, member-countries change the nature of their sovereign debt in a fundamental way, i.e. they cease to have control over the currency in which their debt is issued. As a result, financial markets can force these countries’ sovereigns into default. In this sense member countries of a monetary union are downgraded to the status of emerging economies. This makes the monetary union fragile and vulnerable to changing market sentiments. It also makes it possible that self-fulfilling multiple equilibria arise.

What he doesn’t examine in his paper, but what’s clearly is happing as well is that in a monetary union like the Eurozone, such crisises are vulnerable to cascades. The rescue of Ireland and Greece makes Spain and Portugal weak, which means they need to be bailed out which made Italy look worse and France a bit wobbly… Before you know it even very safe countries like Holland or Germany are brought down. Which makes it all that much more important that the Eurozone learns to deal properly with these crisises.

Courtiers in royal flattery shock

economic crisis
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In the most surprising development ever, a group of twenty rightwing economics claimed that the poor starving masses of the UK superrich are paying too much tax and will throw their toys out of the pram and move to Switzerland if this doesn’t change. Serious journalists call this news, sensible people the inevitable result of not having strung up some of the more cheeky bankers and foolish economists way back when the crisis first started. The crisis never really scared the rich once it became clear public anger would limit itself to angry muttering, but their courtiers in the media had been a bit more circumspect for a few years. That they’re now back in force means they think it’s business as usual again.

They’ll be surprised.