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So. Shockingly, the IMF has tepidly endorsed controlling capital flows but insist all the usual Washington Consensus policy tools are OK for the job over a longer term.
Those terrible Chinese! How dare they insulate their economy and stimulate domestic spending! (Isn't that what Sweden and other countries tried to do during the Great Depression? Well shame on them, too. Never mind that Sweden recovered its 1929 industrial output by 1934. :P )
Dani Rodrik's article is a nice one. :)
The occasion was Brazil's decision to impose a 2% tax on short-term capital inflows to prevent a speculative bubble and further appreciation of its currency. When asked about the role of capital controls, Strauss-Kahn said he was not wedded to any rigid ideology on the subject. Nonetheless, according to the Financial Times which reported the IMF chief's views, "the IMF would not recommend them as a standard prescription either - as they carried costs and were usually ineffective." Unfortunately, this makes the new IMF sound too much like the old one.
Never mind that Malaysia slammed down controls over capital flows in 1998 and while the speculators whined and moaned about it, that country got on with the business of reflating its economy and putting everything back on an even keel.
Also: YAY! Brazil just imposed a financial transactions tax of 2% on all inbound and outbound flows. Eat that, USA! :P
Fred Magdoff and Michael Yates over at Monthly Review have written a book about the economic crisis. I think it's probably fair to say that the crisis is not merely a financial one, what with the huge job losses and so on. Anywy, the book by Magdoff and Yates is called The ABC's of the Economic Crisis: what working people need to know.
Here are some of the comments ...
That last sentence is a good one.
They also have a SERIES of essays for reading on the Global Economic Meltdown over here. Reading the essays on political economy over the last year or two at MR, as well as picking up a copy of The Great Financial Crisis, has been very helpful in clarifying a lot of issues for me.
==============================================
Of course, we should not forget the materials from the CCPA - one of the supporting organizations of rabble. For example, there is the piece on The Global Economic Crisis and the Candian Dimensions by Bruce Campbell. On the whole, however, the theoretical focus of Monthly Review differs from the nuts and bolts approach of the CCPA. It's all good.
===============================================
Incidently, I found an Indian sister magazine to Monthly Review called Analytic Monthly Review. They have a good summary of (orthodox) economic thinking over the past decades and how we're come to the current impasse. It is also good reading. I've misplaced the link, however.
Red Alert: The Second Wave:
http://www.globalresearch.ca/index.php?context=va&aid=16218
Worst Case Scenario: How to Prepare for Potential Global Collapse:
http://www.globalresearch.ca/index.php?context=va&aid=16171
Demonstrating once again that no good turn is left unpunished, American banks needing to come up with money to repay that portion of aid to them that was repayable are expanding the amount of work they outsource to India.
India may get $1 billion in outsourcing contracts
The public will not bail out the financial services sector for a second time if another global crisis blows up in four or five years time, the managing-director of the International Monetary Fund warned this morning.
Dominique Strauss-Kahn told the CBI annual conference of business leaders that another huge call on public finances by the financial services sector would not be tolerated by the “man in the street” and could even threaten democracy.
Well, it's less that it wouldn't be tolerated and more that there is just no way for most governments now to afford a second bailout even if they want to. This is why leaving financial regulation unreformed is such a danger, because if things go wrong again any time in the near future we go directly to Depression.
Red Alert: The Second Wave of The Financial Tsunami The Wave Is gathering force & could hit between the first & second quarter of 2010
Matthius Chang on the toilet paper scam.
Now this is less of a result of a bad economy and more of possibly misplaced spending to prop it up. China has a new city - trouble is, it's almost empty.
China's empty city
Dubai, DuBubble, DuBurst:
http://www.washingtonsblog.com/2009/11/dububble-duburst.html
"You know about Dubai's economic crisis. But do you know the background to - and fallout from...?"
We are all Palestinians Now
"The same ideology that brought carnage on Iraq and Palestine is the same ideology that makes you lose your home tomorrow.."
http://www.gilad.co.uk/writings/we-are-all-palestinians-now-by-maidhc-o-...
Ya! Like US and Canadian city mayors are tripping over themselves to report eight percent growth, like a every day!
It's in the Mongolian hinterland region. I've read that they build one new city like that one about every two or three weeks in China. Eight percent? WTF? When have we ever had eight percent growth in the Northern Puerto Rico here?
Every day more hits on the system - how much more can it take. General Motors chief executive resigns sending shockwaves through industry
Fritz Henderson departs eight months after predecessor Rick Wagoner was fired by the Obama administration
http://www.guardian.co.uk/business/2009/dec/01/general-motors-fritz-henderson-resigns
Now I hear Greece is having financial trouble - will they be next on the hit list?
The new Iceland? Greece fights to rein in debt
Fears of default grow as years of profligacy come home to roost
http://www.guardian.co.uk/business/2009/nov/30/greece-iceland-debt
Manufacturing slowdown confounds City
• Purchasing managers' index shows output fell in November
• Export orders grow but domestic demand remains weak
http://www.guardian.co.uk/business/2009/dec/01/manufacturing-slowdown-november
Well if the capitalist system can't sustain itself economically, there is only one thing left to do. Hasn't that been our pattern?
Greece was jolted on Tuesday by the downgrading of its debt rating to the lowest level in the euro zone as worries grow about its public finances, driving bank shares, bonds and the euro down in its wake.
The financial blow came as the government struggled to calm two days of youth riots on the anniversary of the police shooting of a 15-year-old boy last year that triggered widespread violence fuelled by anger over the economy.
Citing a fiscal deterioration, Fitch Ratings cut Greek debt to BBB+ with a negative outlook, the first time in 10 years a major ratings agency has put Greece below an A grade.
Two other agencies, Moody's and Standard and Poor's, have put its credit outlook on negative watch due to a debt mountain forecast to hit 125 per cent of gross domestic product next year, making it proportionately the most indebted member of the 16-member currency bloc.
http://www.theglobeandmail.com/report-on-business/markets-fret-over-gree...
Working people may be hurting, but it's a GOLDEN AGE FOR CANADIAN BANKS AS PROFITS SOAR. That's capitalism for ya.
taxpayers bailing banks... the new 'capitalism' displaying socialism in a favourable light... our 'conservatives' on a perpetual bender while the mainstream media pimps propaganda for them...
The former US Federal Reserve chairman told an audience that included some of the world's most senior financiers that their industry's "single most important" contribution in the last 25 years has been automatic telling machines, which he said had at least proved "useful".
Echoing FSA chairman Lord Turner's comments that banks are "socially useless", Mr Volcker told delegates who had been discussing how to rebuild the financial system to "wake up".
Works for me.
http://www.theglobeandmail.com/blogs/bureau-blog/is-liberal-caucus-disci...
Bad bank loans a threat to Russia: S&Phttp://www.theglobeandmail.com/report-on-business/bad-bank-loans-a-threa...
Michael Hudson said about neo-socialism for the rich in 2008:
The bailout money to banks could have funded another 50 years of social security, or socialized medicine for all Americans. But handing government powers to Wall Street is economic suicide.
Too early to pull plug on stimulus spending: Flaherty
Translation: We'd like to put the economy on its ass and drive the country into a debt hole as a favour to banksters and international creditors, like Mulroney and Chretien did before us. But this plan seems to be incompatible with democracy at the moment, and as well, at cross purposes with our chances for election to a phony-baloney majority next time around.
Just finished reading this: http://www.amazon.ca/exec/obidos/ASIN/0771046065/flatwave-20
Very good. In a nutshell, globalization is dead.
I like this game!
Whack-a-banker
Drug Money Saved Banks in Global Crisis Claims UN Advisor:
http://www.guardian.co.uk/global/2009/dec/13/drug-money-banks-saved-un-c...
"Drugs and Crime Chief says $35BN in Criminal Proceeds was effectively laundered by financial institutions.."
Congressman Ron Paul's "Free Competition in Currency Act" Won't Solve the Problem But Still Raises Vital Issues
Gotta hand it to lunatic rightwing fringe. They're at least trying.
Afghanistan, Drugs and Bank Bailouts
http://redioactive.blogspot.com/2009/12/afghanistan-drugs-bank-bailouts....
"Ever wonder where some of the bank bailout money came from...?"
The following is from an interview in Amandla. The title is "A Failed Economy".
As Foster points out, one of his predecessors as editor of Monthly Review, the late Paul Sweezy (1910-2004), was perhaps the best to outline the new role of the financial bubbles and the "symbiotic relationship" between stagnation and financialization.
Plenty more, including remarks on Galbraith's (the younger) new book, The Predator State, etc.
Sounds like a good book. JBF has written excellent analysis on the latest crisis of capitalism. One analyst on the crisis pointed out recently that Obama's regulations are a good step in the right general direction, but he said that it does not go nearly far enough. The US senate has a chance to beef up the recently proposed regulations. But something he said everyone is concerned about are credit default swaps, or CDS. I wasn't exactly sure what they are, but the same financial analyst likens CDS to life insurance. If someone dies under mysterious circumstances, and there is a life insurance payout as a result, then the beneficiaries usually become prime suspects in a possible murder case. Not so with banks and other financial institutions. They are able to bet against other banks and are not typically investigated for working to cause another bank to collapse in the event that it happens. It's totally predatory and legal.
And there are something like $600 trillion in derivatives floating around the world. This is a going concern for masters of the universe in banking and finance right now. If derivatives markets fail, it would thoroughly collapse the western financial system far worse than it has since 2008. Apparently the problem in the US right now is that banks don't want to lend to small business or average Americans. They want little to do with supporting economic recovery at local levels. They just want to gamble bigger and better in global stocks and bonds and derivatives markets. That's where the big money is as far as they are concerned still.
There is also the following ...
... and the preface and first 2 chapters can be found OVER HERE.
Top 10 most likely to default:
http://www.bloggingstocks.com/2009/12/20/which-government-debt-issuers-are-most-likely-to-default/