One is supposed to imagine it roughly the following way: the crisis drags on because business simply hasn’t got going again. That’s because the banks, “lifeline of our economy,” aren’t supplying business people with the loans they need. They don’t do this because they are sitting on “lots of toxic assets,” which is why there is simply ”no more trust” between them nor in their dealings with the rest of the business world. So it’s clear that the state absolutely has to help them trust again, thereby helping all of us out of the crisis.
In the last week of September, the U.S. government announces its intention not to let another big bank fail following the collapse of Lehman Brothers. Instead, the treasury secretary intends to buy the banks’ worthless securities for 700 billion dollars, and so supply them with fresh funds. The rescue package triggers off fierce controversies in the U.S.
[translated from junge Welt 29.09.2008]
The Norwegian parliament, which awards the world’s most important peace prize in memory of one of the biggest weapons manufacturers and war profiteers, has made a worthy choice, like always. Since a warlord who had just finished his job and made peace simply couldn’t be found, a different sort of benefactor of mankind has been honored: Mohammed Junus from Bangladesh, banker.
Without a free market economy, a category five storm certainly would not have been prevented, but only with one could death and destruction on the south coast of the United States have come to such a magnitude. Actually, the responsible government agencies had rather early information that a hurricane of force five was moving on the Louisiana coast. And how did they react to this?
If one were to believe the dogma of the apostles who pronounce that economic reason alone rules in, and only in, a market economy; and if one were to believe their analysis of recent events in the stock market; then it is evident that for some time now, sheer greed for money has dominated one of the most important, supposedly forward-looking sections of the market economy; and led to a horrendous overreaction in the wake of all sorts of fraudulent insider schemes; in other words, to an extreme overvaluation of so-called growth stocks; which has now been punished by an “astronomical elimin
The Japanese national economy is sliding into recession. It is shrinking instead of growing.
The facts of the case are rather banal, since recession is a periodically recurring "phenomenon" of a capitalistic economy. Capitalistic entrepreneurs, with their investment strategies, extend social production beyond the extent to which their commodity can be profitably sold, attempting to win the competition for revenue and profits. Investment is financed by credit in expectation of future returns. At some point, sales slump and traders and producers run out of cash. Capital advanced no longer yields a profit, credit granted and taken is no longer converted into capital, and debtors go bust, hurting creditors as well. By and large, financial difficulties increasingly occur among firms as well as between firms and banks, raising demand for credit, which is decreasingly met for exactly the same reason, so that difficulties to make payments become general. Production plants, which have been flourishing and expanding up to now, are closed down and the employees depending on them are laid off, because profit can no longer be realized.
For years Thailand has been the subject of international admiration. "Sensational growth rates," a building boom sending Bangkok into the ranks of the great metropolises in the shortest period of time, a never-ending rise on the stock-market, the baht as one of the most stable currencies in Southeast Asia, and annual capital inflows of billions of dollars were taken as a proof of trust in the country. It was unanimously held that the success of this "emerging market" was owed to a government that had carried out all the correct policies demanded by the G7 countries and the IMF, namely, "liberalization," "free capital movements" and a market economy. Thailand was considered a "model" that not only other "developing countries" but even Germany could learn from, especially when it came to cheap labor ; so said German president Herzog during an Asian trip. During the spring of 1997, though, "worries in the kingdom of growth" suddenly grew. Foreign investors withdrew money, the stock market slid, and speculators bet on the depreciation of the national currency. The government tried to stop the trend by wasting some billions of dollars defending the baht's peg to the American currency. After surrendering to the money market, the Thai currency lost more than 35 percent of its value within three months. Internal demand collapsed, business and banks went bankrupt, foreign producers closed plants. Moreover, the worst was still to come, as the government had to face losses of 14 billion dollars from foreign currency exchange contracts expiring at the end of the year.
The current flurry about the increasingly miserable food situation is kind of odd. After all, hunger has its permanent place in the modern world, is regularly brought into the headlines by humanitarian organizations on public holidays, is entrusted to private charity, and just as regularly taken off the agenda in favor of other topics. Nor has this particular conflict, which is centered on the price of food and arouses the current indignation, come into the world in the year 2008. Millions of people — redundant figures of the global market economy — have long since had trouble paying for their food. Statistical data exist aplenty, and are pulled out again in view of current events, as to how many millions of “households” in how many countries spend their “income” for the most part on food. Even the insight that “anyone who survives on less than a dollar can hardly feed himself, even in the face of smaller price increases” could have been had earlier.
Political powers and the business people empowered by them “grab land” — this is hardly news. Tapping natural resources in any part of the world is a matter of fact. Developing and exploiting mineral resources requires land rights, on which claims are laid. The cultivation of crops in regions privileged by nature characterizes the modern form of agriculture practiced and propagated by North American and European multinationals. Running plantations requires a sufficient supply of water and extensive land, roads, and ports at one’s disposal. The transportation of liquid and gaseous energy resources to the centers of capitalism, which uses and markets them, requires a global system of pipelines, for which entire states are defined and treated as transit territories. “Land grabbing” takes place all the time for all these cross-border politico-economic needs. And as a further rule, money is paid whenever land under foreign dominion is acquired — proof of a ‘fair deal.’ The current “battle over the Arctic” and over sea beds that have a rich potential in natural resources but no owners also shows that intentions to annex territory politically are not dying out at all — they still belong to the national rights that states both claim and deny each other.