RE: What went right -- once again
IMHO, it seems that declining living standards, or at least stagnating relative to productivity, represents the redefinition of what Marx referred to as the culturally-specific subsistence wage (CSSW). In Marx, the subsistence wage is defined socially. So here in the US, access to a car or health insurance would be considered part of the cultural subsistence wage. This would necessarily change over time as part of the development process. As this cultural subsistence wage is pushed down toward actual subsistence, or actual growth in cultural subsistence wage is less than its expected growth, the rate of surplus value (or, more narrowly, the profit rate) increases. With increasing profits come increased investment, lower unemployment, increased output, and etc All appear good. But why doesn't the population stand up against the relative reduction in the CSSW? A safety valve, perhaps, has been the growth of indebtedness. But indebtedness is not the only part of this. With the widening use of consumer debt and leasing, mainly autos (I think auto leases are not included in consumer debt?), broad consumption patterns have changed. I think the change over the years from a save-till-you-buy to a buy-now-pay(w/ interest)-later pattern has mediated the deleterious impacts of a lower (or stagnating) CSSW. This brings up a question, what is the impact on aggregate demand associated with a shift over time from savings-based consumption to debt-based consumption? In addition, if the capacity to add debt at an individual level can stabilize demand (assuming of course that the supply of debt is forthcoming), what happens when this option has been expended (or retracted all together)? I may be wrong, pointing to the smallest tree in the forest, or beating a dead horse. But that is not new. Jeff -- From: Michael Perelman To: [EMAIL PROTECTED] Subject: What went right -- once again Date: Thursday, March 19, 1998 12:25PM Louis Proyect said that he thought that I was being ironic with my original question. I was, but only to an extent. The economy looks so good from the top. The stock market is soaring. Business is in command. Even labor is doing a bit better in some ways. I don't think that this situation will last, but I never would have predicted that the economy would have been doing this well, this long [from the perspective of those on top]. We Marxists [even Chico Marxists] tend to see impending crises everywhere all the time. Maybe as Rob S. said, E. Asia is the thin wedge. Maybe not. Why have the capitalists succeeded? Some answered the redistribution of income and the defeat of labor [which I suspect is not unrelated to the fall of the USSR]. I also think of the opening of E. Europe, China, etc. to capitalism. I suspect that more is involved. I don't think that it will take much to prick the bubble, but still the economy has been more resiliant than I had expected. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 916-898-5321 E-Mail [EMAIL PROTECTED]
What went right -- once again
Louis Proyect said that he thought that I was being ironic with my original question. I was, but only to an extent. The economy looks so good from the top. The stock market is soaring. Business is in command. Even labor is doing a bit better in some ways. I don't think that this situation will last, but I never would have predicted that the economy would have been doing this well, this long [from the perspective of those on top]. We Marxists [even Chico Marxists] tend to see impending crises everywhere all the time. Maybe as Rob S. said, E. Asia is the thin wedge. Maybe not. Why have the capitalists succeeded? Some answered the redistribution of income and the defeat of labor [which I suspect is not unrelated to the fall of the USSR]. I also think of the opening of E. Europe, China, etc. to capitalism. I suspect that more is involved. I don't think that it will take much to prick the bubble, but still the economy has been more resiliant than I had expected. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 916-898-5321 E-Mail [EMAIL PROTECTED]
Re: What went right / SD illusions
Due to jargon deficiencies (mine, of course) I have not been following these threads very well, but there's enough to jog a memory. Back in the Sixties, when questions and answers were simple, I met a Dutch businessman somewhere in the Balkans. Apropos of something, he suddenly intimated that the Indonesians had exchanged their colonial masters for others infinitely more rapacious, that this was now a common realization, and that there existed circles bent on inviting the Dutch back. Since I knew that all rats have teeth and fleas, I was disposed to see this allegation as a national conceit and nothing more. Today, viewed from the belly of an insatiable beast, I'd give any odds on it. valis
Re: What went right ~XXI
In a message dated 98-03-14 05:06:03 EST, Dennis writes: Also, for a country were half the population in the early Fifties lived in non-urban areas, and where women were largely confined to familial jobs and brutalized by fearfully medieval gender ideologies, this expansion of the low-wage workforce gave many women a ticket out of the prison-house of the domestic sphere. That said, it's true the power and glory of Sony and Mitsubishi was (and is) built on the backs of rudely treated, miserably compensated and frightfully overworked working women. Which is why, I suspect, that the class politics of 21st century Japan are going to be the politics of gender. -- Dennis You raise some interesting points. While I think there is SOME truth to the fact that women leaving labor in the home for labor in the market does have some psychological/social/political effects which promote the 'freeing' of women in some senses, I think the double burden of two sites of exploitation also wears women down as a group. This is primarily because women don't really 'leave' the labor in the home, they keep the labor in the home and ADD the market labor. So they are then responsible for two places -- home and work, with the structure of responsibility inflexible in both locations. Further, the fact that women are now earning some money tends to be used by men and society to shift the entire burden of reproduction of the next generation on to the shoulders of women. Hence the huge increase in single headed households in most industrial countries. (I am not sure about the increase in single households in Japan, but single headed households in the Asian community are on the rise in the USA.) In short, the responsibility for household labor does not become a shared one between men and women and, at the same time, the fact that women now earn a wage is used as an excuse by many men to off load their responsibilities as a parent. maggie coleman [EMAIL PROTECTED]
Re: What went right ~XXI
That said, it's true the power and glory of Sony and Mitsubishi was (and is) built on the backs of rudely treated, miserably compensated and frightfully overworked working women. Which is why, I suspect, that the class politics of 21st century Japan are going to be the politics of gender. -- Dennis Since when has production been otherwise? As for overworked working women, the Japanese male worker hasn't had it easy either. One can think of two types of overwork: the long commutes from and to home and the other is high-intensity production (that is flexible output) which Piore and Sabel often romanticize. As for politics of the 21st century, I doubt it will be class-based and I doubt it will be about gender although it will be a welcome break if it were the case (see Sheridan). As for staying at home, not paying rent, and not owning a car, honestly irresepective of sex, I don't see them as undesirable at all. On the contrary, when ageing population is such a problem grown up children staying at home might also be a welcome break. Anthony D'Costa
Re: What went right?-unemployment
In a message dated 98-03-14 11:56:56 EST, Doug writes: I thought I was pretty unshockable, but a recent report from the U.S. Bureau of Justice Statistics shocked me. Based on present incarceration stats, a black male born today faces a 1 in 4 lifetime chance of doing prison time. Prison, where you go after conviction for a major crime, not merely jail, where you go while awaiting trial or for minor offenses. Frightening, truly frightening. maggie coleman [EMAIL PROTECTED]
Re: What went right
In a message dated 98-03-14 13:06:44 EST, you write: At 05:40 AM 3/14/98 EST, you wrote: Maggie: Certainly Germany is more unionized than the USA, but since the fall of the wall labor there has been under tremendous attack. As to Japan, the benefits accruing to labor have accrued to Japanese men. A New School student (Dave Kucera) has done some interesting research which shows that the Japanese corporations could reimburse men well because of the flexibility of the contingent female labor force. Almost HALF of the Japanese labor force is made of women working part time and temporary positions with no benefits, no pensions, etc. maggie coleman [EMAIL PROTECTED] John Gulick: From what little I know in Japan so-called "office girls" aged 15-29 can be super-exploited b/c to the extent the Japan is still a patriarchal society non-married Japanese women still live with their parents, don't pay any rent, and often don't own a car. Japanese retailing (especially in the age of deregulation of retail) during the prolonged slump is gearing itself more and more to the ever-changing fashion tastes (clothes, makeup, handbags, etc.) of these 15-29 year-old women b/c their propensity to consume has not tapered off at all but strengthened in the last 7 years. Strange how there's a reciprocal relationship between patriarchy in the home and the workplace and "market feminism" in the sphere of commerce (where effective demand equals social power). Maggie: Women's labor force participation in Japan is approximately the same as in the United States -- which means they are slightly less than half of all wage earners. I can ASSURE YOU that they are not all young, nubile office girls getting freebies to make up for poor wages (unless you subscribe to the idea that all women should die slightly before middle age to prevent their getting to the point where they are useless as male sexual object?). Your fantasies, however, are typical and mundane. Economists typically point to women's SUPPOSED lack of responsibility for things like the rent to justify the payment of low wages -- this is the old, sexist stereotype that women work for pin money. Shit, half the labor force and they still can't afford the fucking pins, and they don't pay the fuckin rent because they can't afford that either! maggie coleman [EMAIL PROTECTED] John Gulick: Maggie, I didn't mean to suggest that super-exploited Japanese women workers got "freebies to make up for poor wages." To the extent that many unmarried Japanese women live at home, it's partially a function of economic necessity dictated by the systematic labor market discrimination of which you speak. And it comes w/ a "price" obviously -- performing unpaid domestic work for one's parents. But from what I understand, this has become a major site of social conflict in Japanese society. Because of the prevalence of patriarchal family ideology, there's a lot of stories in the press and television talk shows and so on about young Japanese women abandoning taking care of their aging parents (i.e. uncompensated domestic work) and spending their free time and income (admittedly meager in many instances) on chic consumer goods. Now perhaps this phenomenon is just a patriarchal moral panic dreamed up by the media (if so, then I guess I'm to blame for not reading between the lines enough). But I think what's going on is an incipient expression of "market feminism," where liberation is attached to the sphere of consumer sovereignty and not to egalitarian gender relations at work and the household, since these institutions are so hard to revolutionize. What is struggling to be born in Japan is something like Nike's "market feminism" in the U.S. -- developing a market of single hip twentysomething female consumers and equating purchasing power with social power while super-exploiting Third World women working in sweatshops. Also the phenomenon I was talking about (even if it slightly a caricature) has a lot do with the fact that many women with a regular income (even if the work is part-time and the pay relatively speaking lousy) are delaying marriage and in many cases not marrying at all (in many instances b/c the attitudes of young men in Japan concerning sex/marriage and so on are still extremely sexist). This means that as a segment of the overall population is a growing pool of twentysomething women w/disposable income. John Gulick Your more extensive argument is much clearer to me. However, without going point by point, I would like to make the following observations: ++It would be surprising in such a traditionalist society if there weren't some sort of uproar over younger women with income. The Japanese may just be at the beginning of the social problems the USA hasNOT been dealing with for decades --if women are to by used by capitalists to reap super profits from low wages, then
Re: What went right
At 05:40 AM 3/14/98 EST, you wrote: Maggie: Certainly Germany is more unionized than the USA, but since the fall of the wall labor there has been under tremendous attack. As to Japan, the benefits accruing to labor have accrued to Japanese men. A New School student (Dave Kucera) has done some interesting research which shows that the Japanese corporations could reimburse men well because of the flexibility of the contingent female labor force. Almost HALF of the Japanese labor force is made of women working part time and temporary positions with no benefits, no pensions, etc. maggie coleman [EMAIL PROTECTED] John Gulick: From what little I know in Japan so-called "office girls" aged 15-29 can be super-exploited b/c to the extent the Japan is still a patriarchal society non-married Japanese women still live with their parents, don't pay any rent, and often don't own a car. Japanese retailing (especially in the age of deregulation of retail) during the prolonged slump is gearing itself more and more to the ever-changing fashion tastes (clothes, makeup, handbags, etc.) of these 15-29 year-old women b/c their propensity to consume has not tapered off at all but strengthened in the last 7 years. Strange how there's a reciprocal relationship between patriarchy in the home and the workplace and "market feminism" in the sphere of commerce (where effective demand equals social power). Maggie: Women's labor force participation in Japan is approximately the same as in the United States -- which means they are slightly less than half of all wage earners. I can ASSURE YOU that they are not all young, nubile office girls getting freebies to make up for poor wages (unless you subscribe to the idea that all women should die slightly before middle age to prevent their getting to the point where they are useless as male sexual object?). Your fantasies, however, are typical and mundane. Economists typically point to women's SUPPOSED lack of responsibility for things like the rent to justify the payment of low wages -- this is the old, sexist stereotype that women work for pin money. Shit, half the labor force and they still can't afford the fucking pins, and they don't pay the fuckin rent because they can't afford that either! maggie coleman [EMAIL PROTECTED] John Gulick: Maggie, I didn't mean to suggest that super-exploited Japanese women workers got "freebies to make up for poor wages." To the extent that many unmarried Japanese women live at home, it's partially a function of economic necessity dictated by the systematic labor market discrimination of which you speak. And it comes w/ a "price" obviously -- performing unpaid domestic work for one's parents. But from what I understand, this has become a major site of social conflict in Japanese society. Because of the prevalence of patriarchal family ideology, there's a lot of stories in the press and television talk shows and so on about young Japanese women abandoning taking care of their aging parents (i.e. uncompensated domestic work) and spending their free time and income (admittedly meager in many instances) on chic consumer goods. Now perhaps this phenomenon is just a patriarchal moral panic dreamed up by the media (if so, then I guess I'm to blame for not reading between the lines enough). But I think what's going on is an incipient expression of "market feminism," where liberation is attached to the sphere of consumer sovereignty and not to egalitarian gender relations at work and the household, since these institutions are so hard to revolutionize. What is struggling to be born in Japan is something like Nike's "market feminism" in the U.S. -- developing a market of single hip twentysomething female consumers and equating purchasing power with social power while super-exploiting Third World women working in sweatshops. Also the phenomenon I was talking about (even if it slightly a caricature) has a lot do with the fact that many women with a regular income (even if the work is part-time and the pay relatively speaking lousy) are delaying marriage and in many cases not marrying at all (in many instances b/c the attitudes of young men in Japan concerning sex/marriage and so on are still extremely sexist). This means that as a segment of the overall population is a growing pool of twentysomething women w/disposable income. John Gulick
Re: What went right?-unemployment
Quoth Doug, in shock: I thought I was pretty unshockable, but a recent report from the U.S. Bureau of Justice Statistics shocked me. Based on present incarceration stats, a black male born today faces a 1 in 4 lifetime chance of doing prison time. Prison, where you go after conviction for a major crime, not merely jail, where you go while awaiting trial or for minor offenses. And the paired opposite of that sorry stat is found on the personals page of any underground newspaper any day, more than once (a composite): One-man woman, SBF, educated, 30-ish, willing to risk her heart again, ISO a solvent dependable M, n/s, n/d, race unimportant. You stat freaks who await the daily serving from our spy at the BLS could learn nearly as much about our happy land from the personals; not so many numbers to crunch, either. valis
Re: What went right?-unemployment
MScoleman wrote: The point of adding in the prison population isn't the great absolute rise in unemployment, but the huge proportional rise in unemployment for African American and Hispanic men. Since the vast majority of prison inmates are AFrican American and Hispanic men, the inclusion of prison inmates in their statistics would make the "great recovery" look even more dismal for them than it already does. I thought I was pretty unshockable, but a recent report from the U.S. Bureau of Justice Statistics shocked me. Based on present incarceration stats, a black male born today faces a 1 in 4 lifetime chance of doing prison time. Prison, where you go after conviction for a major crime, not merely jail, where you go while awaiting trial or for minor offenses. Doug
Re: What went right?-unemployment
In a message dated 98-03-14 01:24:56 EST, Paul Meyer writes: Sorry Maggie, for being anonymous but I am lazy about signing my name. (ie Paul Meyer) No problem, I was just curious as to who you are. As to the triumphalism of the business press, some stations have taken steps to moderate this in the last few days. Channel 4 in New York (NBC?) has been tempering its crowing with some more sobering statistics: 1.25 trillion in personal debt, 5.5 million US children in poverty, 63% of whom have a working parent who can't afford to make ends meet, and interviews with people in the heartland running soup kitchens with growing clientels. However, in the same news segment, they interviewed Paul Samuelson who said that large swings in the business cycle are a thing of the past. He said (I paraphrase here) 'just like we've seen the end of all those diseases like diptheria which were around prior to penicillin, we've seen the end of deep depressions'. First, I think he's dead wrong about deep depressions, second he did not address the central question -- the rising tide is NOT lifting all boats, and third, his analogy is just dead wrong. Overuse of antibiotics has given rise to a whole host of new germs which are killers against which we have no defense. As to you main question -- how to tout the problems of capitalism in the midst of a booming economy -- the idea that the economy is only booming for some seems to me to be the main point. maggie coleman [EMAIL PROTECTED] I was interested in how one should interpret the macro-economic stats given how central they are to selling the "American model." (I mean the triumphalism of the business press is nauseating). It seems to me, admittedly coming from a naive point of view, that 1) You should factor in prison population when doing the comparative analysis 2) The whole issue of "guard labor" seems relevant as well, ie how much of the labor force is needed to just keep order. How much of the labor force is employed in dealing with the effect of the social disintegration "re-organization" has caused. (Probably not enough) 3) How do the relatively high levels of part-time workers play into a comparison. 4) Aren't American rates of labor force participation historically low compared to Western Europe, again skewing the comparison in favor of the US 5)It also seem that a more fair or revealing analysis of unemployment rates would take as it scope not just the post 92 performance of the US but would at least go back 1980 when the incredibly devastating "re-organization" of the industrial heartland was kicking into high gear. (Thomas Geoghan said it best when he wrote the numbers of people affected by de-industrialization in the Rust Belt were so large that they even scared social scientists). I mean are we really right in touting the superiority of rational and democratic intervention in the economy. I think so but how do we make that argument more effectively in the current climate. --- Headers Return-Path: [EMAIL PROTECTED] Received: from relay13.mx.aol.com (relay13.mail.aol.com [172.31.109.13]) by air18.mail.aol.com (v40.7) with SMTP; Sat, 14 Mar 1998 01:24:56 -0500 Received: from galaxy.csuchico.edu (galaxy.CSUChico.EDU [132.241.82.21]) by relay13.mx.aol.com (8.8.5/8.8.5/AOL-4.0.0) with ESMTP id BAA23345; Sat, 14 Mar 1998 01:24:55 -0500 (EST) Received: from host (localhost [127.0.0.1]) by galaxy.csuchico.edu (8.8.8/8.8.8) with SMTP id WAA13783; Fri, 13 Mar 1998 22:24:41 -0800 (PST) Received: from imo20.mx.aol.com (imo20.mx.aol.com [198.81.17.42]) by galaxy.csuchico.edu (8.8.8/8.8.8) with ESMTP id WAA13762 for [EMAIL PROTECTED]; Fri, 13 Mar 1998 22:23:38 -0800 (PST) Received: from [EMAIL PROTECTED] by imo20.mx.aol.com (IMOv13.ems) id 0LFDa04959 for [EMAIL PROTECTED]; Sat, 14 Mar 1998 01:22:07 -0500 (EST) Message-Id: [EMAIL PROTECTED] Date: Sat, 14 Mar 1998 01:22:07 EST Reply-To: [EMAIL PROTECTED] Sender: [EMAIL PROTECTED] From: PJM0930 [EMAIL PROTECTED] To: [EMAIL PROTECTED] Subject: Re: What went right?-unemployment Mime-Version: 1.0 Content-type: text/plain; charset=US-ASCII Content-transfer-encoding: 7bit X-Listprocessor-Version: 8.1 -- ListProcessor(tm) by CREN
Re: What went right ~XXI
On Fri, 13 Mar 1998, MScoleman wrote: As to Japan, the benefits accruing to labor have accrued to Japanese men. A New School student (Dave Kucera) has done some interesting research which shows that the Japanese corporations could reimburse men well because of the flexibility of the contingent female labor force. Almost HALF of the Japanese labor force is made of women working part time and temporary positions with no benefits, no pensions, etc. Quite true. Still, it's important to emphasize that because unemployment is so low in Japan (3.4% or so) and the distribution of wealth relatively egalitarian compared to the US, there's more of a floor under wages and less outright immiseration than in America (real wages in Japan have, I think, kept on rising slowly in the Nineties, whereas US wages have still to bounce back to their late Eighties level). These jobs don't pay well, but at least you can get one pretty easily (Japan also has nationalized health insurance, making for still more egalitarianism). Also, for a country were half the population in the early Fifties lived in non-urban areas, and where women were largely confined to familial jobs and brutalized by fearfully medieval gender ideologies, this expansion of the low-wage workforce gave many women a ticket out of the prison-house of the domestic sphere. That said, it's true the power and glory of Sony and Mitsubishi was (and is) built on the backs of rudely treated, miserably compensated and frightfully overworked working women. Which is why, I suspect, that the class politics of 21st century Japan are going to be the politics of gender. -- Dennis
Re: What went right?-unemployment
Sorry Maggie, for being anonymous but I am lazy about signing my name. (ie Paul Meyer) I was interested in how one should interpret the macro-economic stats given how central they are to selling the "American model." (I mean the triumphalism of the business press is nauseating). It seems to me, admittedly coming from a naive point of view, that 1) You should factor in prison population when doing the comparative analysis 2) The whole issue of "guard labor" seems relevant as well, ie how much of the labor force is needed to just keep order. How much of the labor force is employed in dealing with the effect of the social disintegration "re-organization" has caused. (Probably not enough) 3) How do the relatively high levels of part-time workers play into a comparison. 4) Aren't American rates of labor force participation historically low compared to Western Europe, again skewing the comparison in favor of the US 5)It also seem that a more fair or revealing analysis of unemployment rates would take as it scope not just the post 92 performance of the US but would at least go back 1980 when the incredibly devastating "re-organization" of the industrial heartland was kicking into high gear. (Thomas Geoghan said it best when he wrote the numbers of people affected by de-industrialization in the Rust Belt were so large that they even scared social scientists). I mean are we really right in touting the superiority of rational and democratic intervention in the economy. I think so but how do we make that argument more effectively in the current climate.
Re: What went right
Dennis wrote: Wars in late capitalism are police actions against rogue semi-peripheries or raw materials producers; And as long as that remains the case there is no possibility that Europe or Asia will shove US imperialism aside. The euro, which will most likely be a soft currency, the yen or even the yuan will not replace the dollar as international reserve currency, store of value, and currency of last resort. Based on its military reserves, control of the sealanes and Gulf oil, and seignorage, the US will continue to reign supreme. military budgets are giant subsidy programs for aerospace/electronics Which are paid for in part thru seignorage, tribute or mercenary funding of US military presence as with Japan, but which help guarantee into the foreseeable future continued US scientific and technical leadership. Mark
re: What went right ~XXI
On Thu, 12 Mar 1998, valis wrote: Your immense admiration for the German and Japanese systems suggests to me that their judicious compromise between stalemated capitalist and SD forces is the best we can hope for, there or here. Is that so? Admiration? Hardly. They're capitalist, planet-raping bastards, too, it's just that working folk in their system have won a fairer deal from their systems than we ever achieved in ours. In reality, we've got to fight against the US warlords *and* the EU/Pacific Rim hegemons, at the same time. But that can't happen unless the American Left starts to think and act globally: meaning, turning the globalization-is-necessity mantra of our ruling elites against itself, by fighting for European-style proportational representation for US elections, rebuilding the welfare state, re-unionizing the de-unionized, building a mass Green or Labor Party, and applying some of the economic measures implemented in a haphazard and uncoordinated way by the Pacific Rim countries, i.e. developmental planning, controls on capital and finance, etc. as part of a conscious strategy (a fancy way of saying, putting the flame-thrower on Wall Street). This is a tall order, to be sure, but so was suffrage for women, rights for African Americans, and Social Security and Medicare for all, once. -- Dennis
Re: What went right
Mark Jones wrote: No need to speculate, Bill, here are the facts (we were discussing Dennis's views about the unimportance of the UK vis a vis Japan and Germany). I suspect a lot of those purchases attributed to the UK are for international operations of all kinds of financial institutions based in London - meaning that the final owners are not British. Could just as well be the Eurobranches of Morgan and Deutsche Bank. Doug
Re: What went right
Dennis R Redmond wrote: You're making the classic rentier mistake of confusing short-term profitability I hope I manage to profit from my mistakes as much as they do. (the accumulation of finance capital) versus long-term profitability (market share). The whole point of my argument is that the banking system of the Central European and East Asian metropoles (let's call 'em, for sake of brevity, the CEM and the EAM) is basically designed to funnel capital to industry, and not primarily to make super-profits off of stock market bubbles. Arguably, that is also true of Anglo-Saxon banking and Wall Street/Square Mile generally. Arguments about alleged 'short-termism' do not alter the fundamentals, which are more adverse to German/Japanese mercantile/manufacturing models than you seem to think, and more sanguine about the Anglo-Saxon model. I read Doug Henwood's book attentively. Yes, it is a good book. But his view that Wall St was not a good custodian of US national and industrial assets, cannot surely be our final judgment. Wall St led and initiated a massive restructuring of US capitalism, hauling it round after the oil-shock disaster of the 70s. Wal St succeeded. Germany and Japan tried a different approach, which has yet to demonstrate the same results. The judgment of the 90s on the retsructuring of world capitalism in the 80s, has been harshest on the non-Anglo-Saxon metropoles. The result is that CEM/EAM bank profitability is indeed lower on average, the total volume of lending is higher, because the money which would've gone into the pockets of shareholders ends up being reinvested in low-interest loans to corporations. Exactly the strategy, combined with opacity, which has led to the E Asia meltdown and which is likely to produce a similar deacle in Europe. Or why else is sterling 15% overvalued, if it is not being used as a hedge against such an outcome? The same is true for industrial strategy, by the way -- Japanese car companies didn't make a dime for years on many of their American transplants; rather, the point was to make a long-term investment in the global car market, regardless of profitability considerations. And that is just the problem witht he Japanese economy, isn't it? Making things regardless of profit considerations in the end results in the (Wall ST/Square Mile) receivers being put in. This is why EAM/CEM firms are, on average, far more leveraged than their American counterparts: ie, they're broke The EAM/CEM systems are designed, however, to redistribute the social surplus back to the productive economy. No, they were designed to take whatever advantage there was in the specific (and analogous) circumstances which German and Japanese capital found themselves in, in 1945. So you have a situation where the German banking system has doubled in size from 1990 to 1996, precisely where the American stock market doubled in size during the same period. Both are speculative claims on future assets, of course, but only the German system has something to do with the real economy; the Wall Street bubble, on the other hand, is a stupendous disaster in the making, which will undoubtedly require a humongous Government bailout (financed by our old friend, the real economy) of some sort during the next recession. Leaving aside the question of whether or not Wall Street is just a bubble (it isn't), you may well be right that a crisis is in the making. But the experience of the past 30 years leaves no doubt about who will pay the price, and who will benefit. The US will certainly retain it pre-eminence thru any conceivable crisis short of a world war. Wasn't it Adam Smith who first noted that excessive profits were a sign of economic decadence, whereas rising economies showed lower profits but grew faster, precisely because they were forced to adopt labor-saving innovations sooner? Or am I mixing up my classicists here? Adam Smith was very impressed by China, which he considered to be wealthier and technically more advanced than Europe. When he wrote, England was in the position of say Korea 30 years ago or Japan in 1945 - borrowing technologies and doing all the right things to grow. But the difference was that even then, there were no Chinese naval junks moored off London, but the British were alreayd key players in Asian trade. Unless you can think of a way that German and Japanese capitalisms can enforce a radical change in the Anglo-Saxon world system, then the US and its principal (and most effective) military ally, Britain, will continue to rule the roost. You seem to think that guns don't matter. But they don't agree, do they?
Re: What went right
Mark Jones wrote: I read Doug Henwood's book attentively. Yes, it is a good book. But his view that Wall St was not a good custodian of US national and industrial assets, cannot surely be our final judgment. Wall St led and initiated a massive restructuring of US capitalism, hauling it round after the oil-shock disaster of the 70s. Wal St succeeded. Germany and Japan tried a different approach, which has yet to demonstrate the same results. I don't think it's this simple. Japan is suffering from a serious hangover from its bubble days, a bubble caused in part by the partial deregulation of its financial sector, itself caused in part by a policy of low interest rates urged on them by the U.S. Germany and the rest of Europe are suffering from a project of economic unification which is in part driven by a desire to be more like the U.S. Wall Street imposed upon U.S. industry and government cutbacks in real investment and RD that helped boost profit rates today, but at what cost for the future? Michael Perelman has a book coming out any week now that addresses that final point. Any comments, Michael? Doug
Re: What went right?-unemployment
In a message dated 98-03-12 23:06:59 EST, you write: Even if you did throw the prison population into the stats, how much would effect the official unemployment rate? 1 or 2 per cent? The person who sent this comment didn't sign their message, and their email address was no clue -- however The point of adding in the prison population isn't the great absolute rise in unemployment, but the huge proportional rise in unemployment for African American and Hispanic men. Since the vast majority of prison inmates are AFrican American and Hispanic men, the inclusion of prison inmates in their statistics would make the "great recovery" look even more dismal for them than it already does. maggie coleman [EMAIL PROTECTED]
Re: What went right ~XXI
valis: Your immense admiration for the German and Japanese systems suggests to me that their judicious compromise between stalemated capitalist and SD forces is the best we can hope for, there or here. Is that so? Redmond: Admiration? Hardly. They're capitalist, planet-raping bastards, too, it's just that working folk in their system have won a fairer deal from their systems than we ever achieved in ours. maggie: Certainly Germany is more unionized than the USA, but since the fall of the wall labor there has been under tremendous attack. As to Japan, the benefits accruing to labor have accrued to Japanese men. A New School student (Dave Kucera) has done some interesting research which shows that the Japanese corporations could reimburse men well because of the flexibility of the contingent female labor force. Almost HALF of the Japanese labor force is made of women working part time and temporary positions with no benefits, no pensions, etc. maggie coleman [EMAIL PROTECTED]
Re: What went right
At 05:28 PM 3/13/98 EST, Maggie Coleman wrote: maggie: Certainly Germany is more unionized than the USA, but since the fall of the wall labor there has been under tremendous attack. As to Japan, the benefits accruing to labor have accrued to Japanese men. A New School student (Dave Kucera) has done some interesting research which shows that the Japanese corporations could reimburse men well because of the flexibility of the contingent female labor force. Almost HALF of the Japanese labor force is made of women working part time and temporary positions with no benefits, no pensions, etc. maggie coleman [EMAIL PROTECTED] From what little I know in Japan so-called "office girls" aged 15-29 can be super-exploited b/c to the extent the Japan is still a patriarchal society non-married Japanese women still live with their parents, don't pay any rent, and often don't own a car. Japanese retailing (especially in the age of deregulation of retail) during the prolonged slump is gearing itself more and more to the ever-changing fashion tastes (clothes, makeup, handbags, etc.) of these 15-29 year-old women b/c their propensity to consume has not tapered off at all but strengthened in the last 7 years. Strange how there's a reciprocal relationship between patriarchy in the home and the workplace and "market feminism" in the sphere of commerce (where effective demand equals social power). John Gulick John Gulick Ph. D. Candidate Sociology Graduate Program University of California-Santa Cruz (415) 643-8568 [EMAIL PROTECTED]
Re: What went right
On Fri, 13 Mar 1998, Mark Jones wrote: why else is sterling 15% overvalued, if it is not being used as a hedge against such an outcome? Because British interest rates are higher than Continental European rates. Too high to ever permit Britain to get rich off of exports like Denmark or Austria, but not so high as to completely strangle the economy, and high enough to keep the noses of Britain's working folk to the treadmill, instead of organizing radical unions or lobbying for Green political alternatives. Unless you can think of a way that German and Japanese capitalisms can enforce a radical change in the Anglo-Saxon world system, then the US and its principal (and most effective) military ally, Britain, will continue to rule the roost. You seem to think that guns don't matter. But they don't agree, do they? Do you seriously think that the United States would ever seriously consider nuking Berlin and Tokyo just because their elites have a slightly different stock portfolio than ours do? Not even Edward Teller got this out of hand. US rentiers are simply far too spoiled and wealthy to bother with huckstering the masses to arm themselves against the Teutonic hordes. Wars in late capitalism are police actions against rogue semi-peripheries or raw materials producers; military budgets are giant subsidy programs for aerospace/electronics firms, nothing more. It wasn't always like this -- liberal and monopoly capitalism did indeed rely on direct military interventions to enforce its rule. But global capitalism is a very different kettle of fish. -- Dennis
Re: What went right
Doug Henwood wrote: I don't think it's this simple. Japan is suffering from a serious hangover from its bubble days, a bubble caused in part by the partial deregulation of its financial sector, itself caused in part by a policy of low interest rates urged on them by the U.S. Germany and the rest of Europe are suffering from a project of economic unification which is in part driven by a desire to be more like the U.S. Wall Street imposed upon U.S. industry and government cutbacks in real investment and RD that helped boost profit rates today, but at what cost for the future? Michael Perelman has a book coming out any week now that addresses that final point. Any comments, Michael? Doug The Japanese bubble -- the miraculous self-levitation of Tokyo after the stock market crash on '87 -- was a great source of self-satisfaction to the Japanese then, who thought the debacle in Wall St and London marked Tokyo's final arrival. If Tokyo prices had collapsed then (as they later did) this would have tugged the world into a pandemic depression. But the truth is the Japs were suckered into paying the bill for the 80s party, and they've been paying it ever since.And the truth of the 80s was all about capitalist restructuring after the oil shocks which marked a radical limit-point which as a matter of fact the capitalist world-system STILL has not overcome, and may never will. What Dennis and others need to remember is that there IS no 'real economy' somehow apart from the actual, living process of capitalist accumulation, valorisation and revalorisation thru crisis and restructuring. What there is, is value-production in a unicentric world dominated financially and militarily by US hegmonic imperialism. It is because the US (and its British partner) ruling class is supremely self-confident about the unassailable historical strength of its position, growing stronger all the time, that it is prepared to take such phenomenal risks as Reaganism/Thatcherism -- and it has reaped staggering, colossal rewards for this courage. Meanwhile, yes, it is true that in Stuttgart and Hiroshima and Milan they continue doing not-very-clever things with sheet steel... As far as cutbacks in RD spend go, I've been doing some digging on this and again the truth is not quite as it seems. The long and short of it is that in all spheres of basic science and tech RD the US contineus to move ahead -- together with the UK, which still has the highest per capita rate of citations of research articles, and is first or 2nd (after the US!) in the rate of patents. Thus the United Kingdom is not only the world's second largets financial centre, and the US principal military ally, it is also a leading international RD and basic science centre after the US.
Re: What went right
Doug Henwood wrote: Mark Jones wrote: No need to speculate, Bill, here are the facts (we were discussing Dennis's views about the unimportance of the UK vis a vis Japan and Germany). I suspect a lot of those purchases attributed to the UK are for international operations of all kinds of financial institutions based in London - meaning that the final owners are not British. Could just as well be the Eurobranches of Morgan and Deutsche Bank. Doug They certainly are. In 1993 for example more than $100bn of hot money from central and eastern Europe alone, was cooled and laundered thru the City. This does not make the City just a glorified offshore any more than Wall Street is, and the essential parasitism of contemporary finance capital does not alter the fact that command and control of the capitalist world-system is primarily vested in the 2 places where the Big Swinging Dicks still hand out. They may not be masters of the universe, but they lord it over this cosmological dust-fleck.
re: What went right
To whom..., Hi. New here, but not to everybody. When Dennis Redmond wrote that "EAM/CEM firms are, on average, far more leveraged than their American counterparts", it really surprised me for two reasons. First, I know that management consultants and investment bankers have been encouraging US firms to get cash *off* their balance sheets for some years now. Second, Doug Henwood posted something to another list suggesting that the ratio of capital to output was much lower for US firms than for Japanese and European ones. Does what Dennis wrote conflict with these observations? Second, I'd like to suggest that "return on equity" does, in some fashion, cut across all economic systems, and that high return on equity seems universally desirable. peace
Re: What went right
Interesting data. Why would the Canadian and U.S. banks be so much more successful in increasing their profitability? Mark Jones wrote: Here are the figures on commercial bank profitability, from the IMF 1997 report, International Capital Markets Developments, Prospects, and Key Policy Issues (supplementary tables), which demonstrates the adverse turn in the fortunes of Germany and Japan v. the Anglo-Saxon world. Not much signs of hyperaccumulation here (and the opaque German and Japanese figures are probably over-optimistic). In the later period it would appear to be the case that the major purchaser of US govt. and commercial bonds was not Germany or Japan - but the United Kingdom. Major Industrial Countries: Commercial Bank Profitability Real Return on Equity 1(In percent of total assets) 1985-89 1990-94 Canada7.9 12.1 France . . . -3.3 Germany 6.5 2.7 Italy. . .-1.2 Japan 10.4 1.5 United Kingdom 6.1 4.9 United States 5.0 8.5 Sources: International Monetary Fund, World Economic Outlook database; OECD (1996); and IMF staff estimates. 1. Calculated as net income after taxes divided by capital and reserves at the end of the previous year, minus consumer price index for the year. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 916-898-5321 E-Mail [EMAIL PROTECTED]
Re: What went right?
Jeffrey, PKs don't subscribe to ISLM and I did not imply that they do. That's why Doug's jibe would be at PKs, not "garden variety Keynesians". The outcome is indeed explicable by an ISLM model with a reduced budget deficit shifting back LM substantially and higher taxes on the rich not shifting back IS much. Not all policymakers or models buy ISLM, but it is very deeply entrenched, so much so that Robert Lucas was led to remark when he received the Nobel Prize that, "there still is no alternative to the Keynesian model" (despite he and many others having declared it dead many times over). Post Keynesians have a harder time explaining "why things have gone right" (probably Michael P. should introduce this thread over on pkt, just for kicks, :-)). Barkley Rosser On Thu, 12 Mar 1998 09:15:00 -0500 "Fellows, Jeffrey" [EMAIL PROTECTED] wrote: Since when do Post-Keynesians subscribe to the ISLM model? -- From: Rosser Jr, John Barkley To: [EMAIL PROTECTED] Cc: [EMAIL PROTECTED] Subject: Re: What went right? Date: Wednesday, March 11, 1998 5:41PM Doug, You should have said "take that, Post Keynesians!" Most garden variety Keynesians who believe in the ISLM model (supposedly nobody does, but all policymakers and all macroeconometric forecasting models do) would and did predict that taxing the rich to reduce the deficit would lower interest rates and stimulate investment in a situation with a high budget deficit to begin with, as we had. The rich have lower mpc's than the poor, so raising their taxes does not reduce consumer spending as much as raising taxes on the poor, again, a garden variety Keynesian viewpoint. Barkley Rosser (now all the PKs will get on my case) On Tue, 10 Mar 1998 19:58:35 -0500 Doug Henwood [EMAIL PROTECTED] wrote: Michael Perelman wrote: I would like to start a dialogue on why the (U.S.) economy has been doing as well as it has over the past few years. We know about the problems, inequities , but why has the house of cards stayed up as long as it has. Hey, how about this - taxing the rich reduced the budget deficit, allowing interest rates to fall (take that, Keynesians!), but without compromising aggregate demand. The reduction in interest rates explains a lot of the rise in corp profits, which has sustained investment. I've been away for a few days, so I don't know what anyone else said yet. Doug -- Rosser Jr, John Barkley [EMAIL PROTECTED] -- Rosser Jr, John Barkley [EMAIL PROTECTED]
Re: What went right?
Doug, Hmmm, must have missed those questions on pkt. Actually some of the newer open economy ISLM models have the main stimulus of an expansionary monetary policy, or of any policy such as reducing budget deficits without a monetary tightening that leads to lower interest rates (remember Alan Greenspan sitting between Hillary and Tipper when Bill proposed those tax increases much to Republican horror?) as operating through an export stimulus arising from a depreciation of the currency. Of course, now that the US dollar is surging, what does this mean for the export stimulus? For that matter, why is it that the stock market is so easily shaking off the lousy profit reports out of Compaq, etc.? Barkley Rosser On Thu, 12 Mar 1998 16:02:50 -0500 Doug Henwood [EMAIL PROTECTED] wrote: Rosser Jr, John Barkley wrote: Post Keynesians have a harder time explaining "why things have gone right" (probably Michael P. should introduce this thread over on pkt, just for kicks, :-)). I've tried that twice now, and the closest approximation of a credible answer I've gotten was Paul Davidson's - that it's exports. To the retort that imports have grown more rapidly than exports, Davidson rightly points out that it doesn't necessarily matter: if exports stimulate income growth, and income growth increases import demand, then of course M will grow along with X. This is a point that worries me about EPI's trade work; do they take this into account? By the way, does anyone know anything about the relative profitability of exports vs. imports? Doug -- Rosser Jr, John Barkley [EMAIL PROTECTED]
Re: What went right
No need to speculate, Bill, here are the facts (we were discussing Dennis's views about the unimportance of the UK vis a vis Japan and Germany). Net Foreign Purchases of U.S. Bonds (In millions of U.S. dollars) Government Corporate Total Bonds Bonds 199358,980 30,572 89,552 1994 100,481 37,992 138,473 1995 162,844 57,853 220,697 1996 293,685 77,978 371,663 Of which: Europe137,148 56,194 193,342 Germany19,297 3,514 22,811 United Kingdom 76,323 43,702 120,025 Spain 18,421 462 18,883 Asia 112,597 9,806122,403 Japan 48,985 6,099 55,084 China 17,209 25717,466 Hong Kong, China 15,2811,73717,018 1997:Q1 17,048 20,82697,874 Source: U.S. Department of Treasury, Treasury Bulletin. William S. Lear wrote: Mark's claim that "the major purchaser of US govt. and commercial bonds was not Germany or Japan - but the United Kingdom" is not only wrong by his criteria (Mark probably meant to say "relative to Japan and Germany"), but it also seems a dubious leap. If I were given a table as Mark provided and asked to draw conclusions from it, I would not, in my ignorance, conclude anything about the relative size of purchases (holdings?) of US govt/commercial paper. Enlightenment welcomed. Bill
re: What went right ~XXI
You're making the classic rentier mistake of confusing short-term profitability (the accumulation of finance capital) versus long-term profitability (market share). The whole point of my argument is that the banking system of the Central European and East Asian metropoles . Wasn't it Adam Smith who first noted that excessive profits were a sign of economic decadence, whereas rising economies showed lower profits but grew faster . Right you are, Dennis, and I'd be even more impressed than I am were it not for the almost orgasmic delight you appear to take in showing that the American financial system is utterly fucked in comparison with those of Germany and Japan. What's the point if in the end there will be imperialist rivalry, global chaos and war regardless of all this. (8^[ Yes, the German and Japanese systems, truth told, reflect a) surviving elements of monarchic mercantilism, and b) genuine _nationhood_, in the anthropological sense of the term. The American system, OTOH, reflects Wild West freebooting at its most anarchic post-Civil War heights. Your immense admiration for the German and Japanese systems suggests to me that their judicious compromise between stalemated capitalist and SD forces is the best we can hope for, there or here. Is that so? valis (no rentier)
Re: What went right?
In a message dated 98-03-09 17:23:04 EST, you write: Well? By what standards? Unless you mean relatively low unemployment. Not hard to understand, given the 1.2 million employeable Americans in prison. Or do you mean the sheer length of the current US business cycle, now wheezing along in its seventh year? Let's not forget the beneficience of Even if you did throw the prison population into the stats, how much would effect the official unemployment rate? 1 or 2 per cent?
Re: What went right
On Thu, 12 Mar 1998, Mark Jones wrote: Net Foreign Purchases of U.S. Bonds (In millions of U.S. dollars) Government Corporate Total Bonds Bonds 1996 293,685 77,978 371,663 Of which: Europe137,148 56,194 193,342 Germany19,297 3,514 22,811 United Kingdom 76,323 43,702 120,025 Asia 112,597 9,806122,403 Japan 48,985 6,099 55,084 China 17,209 25717,466 Hong Kong, China 15,2811,73717,018 Interesting stats. British capital seems mighty keen to flee to US shores -- assuming that these figures are measuring British purchases of US debt, and not transshipments or resales further along the value chain to European banks merely doing business in London. But does this have anything to do with the fact that the Brits are one the biggest overseas investors in the US economy anyway? I.e. aren't these flows simply part of the merger/buyout wave being co-financed by the Wall Street bubble? (This would explain the low figure for Asian purchases of corporate bonds: T-bills are a global hedge for doing business in the Pacific Rim, whereas US bonds would imply takeovers or other direct investments in the US). If so, how do the above figures compare as a percentage of, say, total Brit/German/Japanese investments in the US, and is this percentage rising or falling over time? -- Dennis
re: What went right
On Thu, 12 Mar 1998, Mark Jones wrote: Here are the figures on commercial bank profitability, from the IMF 1997 report, International Capital Markets Developments, Prospects, and Key Policy Issues (supplementary tables), which demonstrates the adverse turn in the fortunes of Germany and Japan v. the Anglo-Saxon world. Not much signs of hyperaccumulation here (and the opaque German and Japanese figures are probably over-optimistic). [IMF statistics showing that Canadian banks were far more profitable from 1990-1994 than US banks, which in turn were more profitable than German or Japanese banks] You're making the classic rentier mistake of confusing short-term profitability (the accumulation of finance capital) versus long-term profitability (market share). The whole point of my argument is that the banking system of the Central European and East Asian metropoles (let's call 'em, for sake of brevity, the CEM and the EAM) is basically designed to funnel capital to industry, and not primarily to make super-profits off of stock market bubbles. The result is that CEM/EAM bank profitability is indeed lower on average, the total volume of lending is higher, because the money which would've gone into the pockets of shareholders ends up being reinvested in low-interest loans to corporations. The same is true for industrial strategy, by the way -- Japanese car companies didn't make a dime for years on many of their American transplants; rather, the point was to make a long-term investment in the global car market, regardless of profitability considerations. This is why EAM/CEM firms are, on average, far more leveraged than their American counterparts: the interest burden on the extra debt is quite low, so there's no problem paying these off, and the interest gets funneled straight back to new investments anyway. All this feeds back into the culture of finance capital -- since there are very few businesses out there which generate the 15% return on equity demanded by Wall Street these days, what you get in the US (as well as the UK and Canada) is a banking system designed to concentrate what growth there is into the portfolios of the superrich (investment, on the other hand, as Doug's excellent "Wall Street" points out in some detail, is mostly self-financed instead of bank-financed). The EAM/CEM systems are designed, however, to redistribute the social surplus back to the productive economy. So you have a situation where the German banking system has doubled in size from 1990 to 1996, precisely where the American stock market doubled in size during the same period. Both are speculative claims on future assets, of course, but only the German system has something to do with the real economy; the Wall Street bubble, on the other hand, is a stupendous disaster in the making, which will undoubtedly require a humongous Government bailout (financed by our old friend, the real economy) of some sort during the next recession. Wasn't it Adam Smith who first noted that excessive profits were a sign of economic decadence, whereas rising economies showed lower profits but grew faster, precisely because they were forced to adopt labor-saving innovations sooner? Or am I mixing up my classicists here? -- Dennis
Re: What went right
Part of the answer may lie in the correlation between the Fed and the Canadian Central Bank. I remember a study by a former professor of mine at Utah indicating the CCB acted like the 13th District in the U.S. Federal Reserve System. How this may relate to wider economic experiences between Canada and the US I cannot say. Jeff -- From: Michael Perelman To: [EMAIL PROTECTED] Subject: Re: What went right Date: Thursday, March 12, 1998 10:44AM Interesting data. Why would the Canadian and U.S. banks be so much more successful in increasing their profitability? Mark Jones wrote: Here are the figures on commercial bank profitability, from the IMF 1997 report, International Capital Markets Developments, Prospects, and Key Policy Issues (supplementary tables), which demonstrates the adverse turn in the fortunes of Germany and Japan v. the Anglo-Saxon world. Not much signs of hyperaccumulation here (and the opaque German and Japanese figures are probably over-optimistic). In the later period it would appear to be the case that the major purchaser of US govt. and commercial bonds was not Germany or Japan - but the United Kingdom. Major Industrial Countries: Commercial Bank Profitability Real Return on Equity 1(In percent of total assets) 1985-89 1990-94 Canada7.9 12.1 France . . . -3.3 Germany 6.5 2.7 Italy. . .-1.2 Japan 10.4 1.5 United Kingdom 6.1 4.9 United States 5.0 8.5 Sources: International Monetary Fund, World Economic Outlook database; OECD (1996); and IMF staff estimates. 1. Calculated as net income after taxes divided by capital and reserves at the end of the previous year, minus consumer price index for the year. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 916-898-5321 E-Mail [EMAIL PROTECTED]
Re: What went right?
Rosser Jr, John Barkley wrote: Post Keynesians have a harder time explaining "why things have gone right" (probably Michael P. should introduce this thread over on pkt, just for kicks, :-)). I've tried that twice now, and the closest approximation of a credible answer I've gotten was Paul Davidson's - that it's exports. To the retort that imports have grown more rapidly than exports, Davidson rightly points out that it doesn't necessarily matter: if exports stimulate income growth, and income growth increases import demand, then of course M will grow along with X. This is a point that worries me about EPI's trade work; do they take this into account? By the way, does anyone know anything about the relative profitability of exports vs. imports? Doug
Re: What went right
At 07:44 AM 3/12/98 -0800, Michael Perelman writes: Interesting data. Why would the Canadian and U.S. banks be so much more successful in increasing their profitability? in response to Mark Jones' presentation of the following data for bank profitability: Major Industrial Countries: Commercial Bank Profitability Real Return on Equity 1(In percent of total assets) 1985-89 1990-94 Canada7.9 12.1 United States 5.0 8.5 An important reason for this is the steepening of the bond yield curve between the two periods. The recession and then US Fed pushed down short term interest rates in the latter period, but long-term rates stayed high because of uncertainty about the future. This allowed the banks to save their asses by charging high loan rates (connected with the LT bond rates) while paying low rates on deposits (connected with the ST bond rates). BTW, shouldn't it be as a percent of total equity (assets - liability) rather than as a percent of assets (loans, bond holdings, etc.)? in pen-l solidarity, Jim Devine [EMAIL PROTECTED] http://clawww.lmu.edu/1997F/ECON/jdevine.html Economic theories "have become little more than vain attempts to revive exploded superstitions, or sophisms like those of Mr. Malthus, calculated to lull the oppressors of mankind into a security fo everlasting triumph." -- adapted from Percy Bysshe Shelley.
Re: What went right
On Thu, March 12, 1998 at 07:44:34 (-0800) Michael Perelman writes: Interesting data. Why would the Canadian and U.S. banks be so much more successful in increasing their profitability? I have a further question: how do you make the leap from profitability to the size of the stakes purchased, as Mark does? What about the possibility that the percentage and amount of US govt/commercial bonds in the various portfolios varied wildly? If we rank the various countries by commercial bank profitability 90-94, we get Canada, US, UK, Germany, Japan, Italy, France: Canada 12.1 United States 8.5 United Kingdom 4.9 Germany 2.7 Japan 1.5 France -3.3 Italy -1.2 Is it really true therefore that US commercial banks purchased less US govt/commercial paper than Canadian banks during this period? Mark's claim that "the major purchaser of US govt. and commercial bonds was not Germany or Japan - but the United Kingdom" is not only wrong by his criteria (Mark probably meant to say "relative to Japan and Germany"), but it also seems a dubious leap. If I were given a table as Mark provided and asked to draw conclusions from it, I would not, in my ignorance, conclude anything about the relative size of purchases (holdings?) of US govt/commercial paper. Enlightenment welcomed. Bill
re: What went right
Here are the figures on commercial bank profitability, from the IMF 1997 report, International Capital Markets Developments, Prospects, and Key Policy Issues (supplementary tables), which demonstrates the adverse turn in the fortunes of Germany and Japan v. the Anglo-Saxon world. Not much signs of hyperaccumulation here (and the opaque German and Japanese figures are probably over-optimistic). In the later period it would appear to be the case that the major purchaser of US govt. and commercial bonds was not Germany or Japan - but the United Kingdom. Major Industrial Countries: Commercial Bank Profitability Real Return on Equity 1(In percent of total assets) 1985-89 1990-94 Canada7.9 12.1 France . . . -3.3 Germany 6.5 2.7 Italy. . .-1.2 Japan 10.4 1.5 United Kingdom 6.1 4.9 United States 5.0 8.5 Sources: International Monetary Fund, World Economic Outlook database; OECD (1996); and IMF staff estimates. 1. Calculated as net income after taxes divided by capital and reserves at the end of the previous year, minus consumer price index for the year.
Re: What went right?
On Mon, 9 Mar 1998, john gulick wrote: Your persistent celebration of Central European and Japanese neo-mercantilism misses the flip side of the dialectical coin -- neo-liberal America with its super-dollar and its credit card Keynesianism realizes the value that these countries' workers produce (kind of like the pre-Plaza Accord days all over again). You can't have your cake (boosting Germany and Japan) and eat it too (busting on late imperial Amerikka), b/c they are partners in crime. Ah, but I come not to praise the new metropoles, but to specifically point out that they really are *metropoles* -- zones where the wealth of the entire planet has, through the incidents of accident and the magic of late development accumulation regimes, been super-concentrated. Surely this fact alone is of some small importance to Left praxis and theory, which remains all too Americentric. The answer isn't to start hawking the virtues of the yen-euro codominion, which will surely be one of the budding growth industries of the early 21st century (one shudders to think of the hordes of indigenous Thurows, Krugmans and Peters which will soon be gracing the covers of Asian and European business Web-channels), so much as to uncover the objective rifts, fissures, and non-identities of the world-system -- the immanent, shifting but inevitable conflict, occasionally open, but usually veiled -- between the global proletariat and the multinational corporations which employ them. The point is that East Asia and Central Europe are going to be the key battlegrounds for the global class struggle; in a world-economy where the US makes up only around 20% of total production, and is trillions of euros in debt to the new metropoles, we like Britain before us are slowly but inexorably becoming irrelevant to the command-and-control functions of the global economy. We've got to fight the Silicon capitalists of the 21st century as well as the mouldering Gingrichite revenants of the 19th. -- Dennis
Re: What went right?
Dennis R Redmond wrote: Ah, yes, this explains the amazing resurgence of that British car industry, yes? Dennis, your fascination with widgets blinds you to certain truths about the contemporary set-up. As well as those powerhouse Brit electronics/software/ semiconductor firms, busily clobbering Mitsubishi and Microsoft for market share. I'm glad you think something is right with the US, after all. But in fact the future lies with MS, not Mitsubishi. The DM is undervalued, deliberately so; This is where I have a serious problem with your thinking. German industrialists didn't like the Bundesbank's neo-monetarist interest rate policy in the early Nineties, so since then German rates have been reduced to subzero levels. If you mean both the Japanese and German economies have over-deflated as a result of their generally-unsuccessful attempt to outcompete the Wall Street-led US, and now have to loosen the screws before something goes pop, you are right, only I know you don't mean this. Japan is exhibiting a similar, temporary undervaluation vis-a-vis the American dollar, due to superlow real interest rates as compared with the American Fed's relative tightness. Funny in that case why Japan is in the shit and the US ain't. And I know I've said this before, but I'll keep saying it until people understand: Now, now, Dennis, hectoring gets you nowhere we are NOT dealing with some WW II return of the evil Japs/Krauts scenario, we're dealing with Central Europe and East Asia, multinational zones of hyperaccumulation. If you think that Central Europe is hyperaccumulating, you are wrong. Hyperventilating, maybe. These zones are self-financing, meaning that they can get away with reducing interest rates to nothing and still haul in the cash from their industrial investments. Meaning that their industries are so unprofitable and their banks so shaky that even negative interest rates may not save them; what negative rates actually means is that they are poised over a precipice of REAL price and asset deflation of an unprecedented kind. The US, on the other hand, is a net international debtor, meaning that we are dependent on those low overseas rates for our capital financing, and not the other way around. Unless you've got solid evidence to the contrary? Yes, the US is a net debtor, so what is else is new? All this means is that you simply do not understand the power of seignorage or the the real and colossal historical advantages which being the world hegemon endows. And you don't. Mark
Re: What went right?
Doug, You should have said "take that, Post Keynesians!" Most garden variety Keynesians who believe in the ISLM model (supposedly nobody does, but all policymakers and all macroeconometric forecasting models do) would and did predict that taxing the rich to reduce the deficit would lower interest rates and stimulate investment in a situation with a high budget deficit to begin with, as we had. The rich have lower mpc's than the poor, so raising their taxes does not reduce consumer spending as much as raising taxes on the poor, again, a garden variety Keynesian viewpoint. Barkley Rosser (now all the PKs will get on my case) On Tue, 10 Mar 1998 19:58:35 -0500 Doug Henwood [EMAIL PROTECTED] wrote: Michael Perelman wrote: I would like to start a dialogue on why the (U.S.) economy has been doing as well as it has over the past few years. We know about the problems, inequities , but why has the house of cards stayed up as long as it has. Hey, how about this - taxing the rich reduced the budget deficit, allowing interest rates to fall (take that, Keynesians!), but without compromising aggregate demand. The reduction in interest rates explains a lot of the rise in corp profits, which has sustained investment. I've been away for a few days, so I don't know what anyone else said yet. Doug -- Rosser Jr, John Barkley [EMAIL PROTECTED]
Re: What went right?
On Wed, 11 Mar 1998, Mark Jones wrote: The US is not falling behind, it is moving ahead. And Japan and Germany are not going to catch up and overtake Anglo-Saxon capitalism anytime soon, if ever. BTW, people write off Rule Britannia too easily. As the 51st state of the Union, we are doing rather well. To call us 'irrelevant' is seriously wide of the deutschmark, now worth one-third less than the UK pound from 18 months ago. Ah, yes, this explains the amazing resurgence of that British car industry, yes? As well as those powerhouse Brit electronics/software/ semiconductor firms, busily clobbering Mitsubishi and Microsoft for market share. The DM is undervalued, deliberately so; German industrialists didn't like the Bundesbank's neo-monetarist interest rate policy in the early Nineties, so since then German rates have been reduced to subzero levels. Japan is exhibiting a similar, temporary undervaluation vis-a-vis the American dollar, due to superlow real interest rates as compared with the American Fed's relative tightness. And I know I've said this before, but I'll keep saying it until people understand: we are NOT dealing with some WW II return of the evil Japs/Krauts scenario, we're dealing with Central Europe and East Asia, multinational zones of hyperaccumulation. These zones are self-financing, meaning that they can get away with reducing interest rates to nothing and still haul in the cash from their industrial investments. The US, on the other hand, is a net international debtor, meaning that we are dependent on those low overseas rates for our capital financing, and not the other way around. Unless you've got solid evidence to the contrary? -- Dennis
Re: What went right?
In a message dated 98-03-11 09:36:51 EST, Mark writes (amongst other things): Anglo-Saxon world dominion has lasted for almost three centuries and will probably last as long as capitalism. Mark It depends on how you define Anglo-Saxon. maggie coleman [EMAIL PROTECTED]
Re: What went right?
Dennis wrote: The point is that East Asia and Central Europe are going to be the key battlegrounds for the global class struggle; in a world-economy where the US makes up only around 20% of total production, and is trillions of euros in debt to the new metropoles, we like Britain before us are slowly but inexorably becoming irrelevant to the command-and-control functions of the global economy. We've got to fight the Silicon capitalists of the 21st century as well as the mouldering Gingrichite revenants of the 19th I have yet to be convinced of this. The US is not falling behind, it is moving ahead. And Japan and Germany are not going to catch up and overtake Anglo-Saxon capitalism anytime soon, if ever. BTW, people write off Rule Britannia too easily. As the 51st state of the Union, we are doing rather well. To call us 'irrelevant' is seriously wide of the deutschmark, now worth one-third less than the UK pound from 18 months ago. As for thinking we Brits were pushed off the pedestal, we weren't. It should be remembered that the British, especially under Churchill, had to practically push the baton into an unwilling (at first) American grasp. That was his plan and it worked. Anglo-Saxon world dominion has lasted for almost three centuries and will probably last as long as capitalism. Mark
Re: What went right?
"... much of the recent [noninflationary] economic growth [in the US] has been caused not by productivity gains but by new jobs and by the greater number of hours worked by those already employed. Workers 'are coming out of the woodwork' as jobs become available, so the pressure raise wages and therefore prices has been dampened. The work force seems to be other larger and more flexible, than was previously realized, which is another way of saying that the unemployment rate was really higher tan reported, and may still be. Two decades of surplus labor have also kept workers too docile to demand serious wage hikes. We are also all aware of what has happened to the power of organized labor, which once represented one third of all workers and now represents about one tenth of them. "In addition, prices of imported goods, which account for nearly 15 percent of what Americans buy, have been falling for several years, and are currently well below their 1992 level. Just as important but rarely commented on is that there may be an oversupply of services in the US. Consider the large number of health are and financial institutions, in addition to retail outlets such as coffee shops and department stores. The highly competitive environment keeps companies from raising prices rapidly. The problem for future rates of growth is that none of these conditions is permanent. The unemployment rate cannot fall indefinitely, for example. This is why few economists believe that a rate of growth of more than 2.5 percent [or real GDP] or slightly higher at best can be sustained indefinitely." -- Jeff Madrick, NEW YORK REVIEW OF BOOKS, March 26, 1998, p. 30 ("Computers: Waiting for the Revolution.") Madrick is the editor of CHALLENGE, a magazine with a social-democratic tilt. He also points to the unsustainably high stock market and consumer indebtedness as signs of instability. I would add to his list... in pen-l solidarity, Jim Devine [EMAIL PROTECTED] http://clawww.lmu.edu/1997F/ECON/jdevine.html "he who is unable to live in society or has no need, because he is sufficient for himself, must be either a beast or a god." -- Aristotle
Re: What went right?
Amongst other things Jim Devine writes: Another reason for the US boom has increased consumer indebtedness. This, partly caused by relatively stagnant real wages, has allowed consumer spending to do relatively well. Good point. Now a question about the relation of consumer debt to surplus value: Since most consumer debt is accrued by wage earners, and those earning less wages wrack up higher debts to keep up with even basic socially acceptable standards of living AND pay more than higher prices borrowers -- does this become part of the surplus value extracted from the working class? To me, this seems to be a nationalized version of the company store. The working class earns wages which do not pay for all the goods which the media tells us we need, so they borrow from the bankers who finance the capitalists, to consume more goods. Their wages are then held captive by the credit corporations and the profits from purchases return to the capitalists who under pay the wages to begin with. maggie coleman [EMAIL PROTECTED]
Re: What went right?
Michael Perelman wrote: I would like to start a dialogue on why the (U.S.) economy has been doing as well as it has over the past few years. We know about the problems, inequities , but why has the house of cards stayed up as long as it has. Hey, how about this - taxing the rich reduced the budget deficit, allowing interest rates to fall (take that, Keynesians!), but without compromising aggregate demand. The reduction in interest rates explains a lot of the rise in corp profits, which has sustained investment. I've been away for a few days, so I don't know what anyone else said yet. Doug
Re: What went right?
In the midst of making many other interesting points, Louis Proyject writes: What it will take to reverse these trends is a strengthening of the labor movement, which is already beginning. Alex Cockburn's column in the same digital edition of the Nation reports on the struggle of Oakland longshoremen who had been fined for picketing in support of their Liverpool brothers and sisters. The bosses are trying to bankrupt the union through the courts. Strangely enough, on the editorial page of Long Island Newsday today (3-10-98) is a call for the Democratic party to start defending unions and workers attempting to organize unions. The article centers its story around a hotel operator in Las Vegas who was fired for holding an organizing meeting in her home. This was an illegal dismissal, and through the NLRB the woman won her job back, but the movement to unionize in that hotel was destroyed. Basically, the message is that the democrats take union money but are mum about the tidal wave of illegal activity amongst businesses who harrass, intimidate and outright illegally fire anyone even hinting at unionizing. A strong pro-union editorial in the mainstream press -- they must REALLY be tired of sexgate. maggie coleman [EMAIL PROTECTED]
Re: What went right?
At 10:07 AM 3/10/98 -0500, Louis P wrote: The Nation Magazine Digital Edition (www.thenation.com) has an article by Mark Cooper on Chile today that includes the following passage: what's the URL (web page address)? I am getting sick of being in the NATION time machine, where I read columns and articles concerning matters which the mainstream media consider to be ancient history (like the abortive war against Iraq) because it takes the NATION so long to get to the Left Coast... Cooper points out that the very first experiment in Reagan-Thatcher economics was Chile in 1973. Although the article focuses on Chile itself, there certainly can be an argument that the Pinochet coup was the opening salvo against both Social Democracy and Soviet style Communism, two of the pillars of Allende's Popular Front government. the Right has been attacking the Left since the French Revolution of 1789. I wouldn't call the Pinochet coup an opening salvo as much as a response to the Left's temporary success, like the Reaganoid attack on Nicaragua in the 1980s. The architects of the economic "reforms" in Chile were the "Chicago Boys", including Milton Friedman who personally directed the changes. His disciple Jeffrey Sachs has adapted this austerity program for Bolivia, the USSR, Poland, etc. the MF denies that he "personally directed" the campaign (or maybe it should be spelled "campain"). His ideas were important in inspiring Los Chicago Boys, however. Of course, it was the US/Pinochet forces that needed someone like Friedman for inspiration. If he hadn't existed, he would have been invented. Financial austerity is not really new. It used to be called "adherence to the gold standard" back when that standard existed. I don't think Sachs is one of the MF's disciples. Rather, he comes from a profession infected by the MF's ideas. Again, if he hadn't existed, he would have been invented. in pen-l solidarity, Jim Devine [EMAIL PROTECTED] http://clawww.lmu.edu/1997F/ECON/jdevine.html "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- K. Marx, paraphrasing Dante A.
Re: What went right?
The Nation Magazine Digital Edition (www.thenation.com) has an article by Mark Cooper on Chile today that includes the following passage: "Chile hardly holds the patent on a pullback from politics, a reflex now rampant from Peoria to Poland. But few countries in recent decades have traveled quite the distance backward that Chile has. In Eastern Europe the economic systems were stood on their heads, but decades of Stalinist cynicism and duplicity served to grease the way for the savageries of frontier capitalism. Chile was different, though. In 1970, on the eve of Allende's election, one U.S. researcher found Chilean teenagers--along with their Israeli and Cuban counterparts--to be among the three least alienated, most optimistic groups of youth in the world. But years of military dictatorship and a quarter-century now of the most orthodox application of sink-or-swim social policy has imposed a sort of collective neurosis on Chileans--it has driven them crazy, driven them to market. "Chilean millworkers now assiduously follow daily stock quotes to make sure their private pensions will be there when they retire. When their children leave the school gates, they plop Velcro-backed insignias from elite academies onto their uniforms, lest the other subway riders guess they go to more downscale institutions. Bookstores that once brimmed with political classics now stock huge piles of translations of Anthony Robbins and other quick-road-to-success gurus. National "educational" TV features training films in entrepreneurship and good customer relations. Prime-time infomercials beam dubbed-over blue-eyed gringos blissfully hawking vegetable Smart Choppers and Sure Fire bass lures to the rural and fishing villages of the Chilean south, where horses are still sometimes a preferred means of transportation. "A recent police checkpoint in the posh Vitacura neighborhood found that a high percentage of drivers ticketed for using their cell phones while in motion were using toy--even wooden--replicas. Other middle-class motorists, pretending they have air-conditioning, bake with their windows closed. Workers at the ritzy Jumbo supermarket complain that on Saturday mornings, the dressed-to-kill clientele fill their carts high with delicacies, parade them in front of the Joneses and then discreetly abandon them before having to pay. In the tony La Dehesa neighborhood, Florida palm trees are the landscaping fashion à la mode and black butlers are all the rage. But they better be stocky six-foot Dominicans, as the first wave of imported help, from Peru, turned out to be unfashionably short-statured. In the rickety shantytowns around Santiago, readily available Diners Club cards are used to charge potatoes and cabbage, while Air Jordans and WonderBras are bought on a twelve-month installment plan." Cooper points out that the very first experiment in Reagan-Thatcher economics was Chile in 1973. Although the article focuses on Chile itself, there certainly can be an argument that the Pinochet coup was the opening salvo against both Social Democracy and Soviet style Communism, two of the pillars of Allende's Popular Front government. The architects of the economic "reforms" in Chile were the "Chicago Boys", including Milton Friedman who personally directed the changes. His disciple Jeffrey Sachs has adapted this austerity program for Bolivia, the USSR, Poland, etc. Reagan and Thatcher implemented the program also. It persists through the Clinton administration, which like the new regime in Chile, or Blair's government in Great Britain, represents Pinochet with a smiling face. As Maggie Coleman pointed out yesterday, the key to the "success" of capitalism in the USA is a transfer of wealth. In order for this to happen, you have to break the workers movement. In Chile, this was accomplished with guns. In the USA, it was accomplished because the labor movement did not know how to fight. The airline controllers strike was the first in a series of punishing defeats. These defeats made it possible to transfer wealth from the working class to the ruling class. Cooper quantifies the income redistribution that took place in Chile: "The New York Times recently celebrated this state of affairs by crediting Pinochet with a 'coup that began Chile's transformation from a backwater banana republic to the economic star of Latin America,' and the Clinton Administration wants Chile to be the next member of NAFTA. Putting aside the fact that the pre-Pinochet "banana republic" produced a bumper crop of world-renowned artists, scientists and other intellectuals, including the winners of two Nobel Prizes in Literature, the Times also got it wrong on the economy. The 7 percent annual growth since 1986 cited by enthusiastic supporters of the Chilean economy obscures several other less attractive figures: There was no growth between 1973 and 1986; real salaries have declined 10 percent since 1986; and salaries are still 18 percent lower than
Re: What went right?
On Mon, 9 Mar 1998, Michael Perelman wrote: I would like to start a dialogue on why the (U.S.) economy has been doing as well as it has over the past few years. We know about the problems, inequities , but why has the house of cards stayed up as long as it has. At 02:17 PM 3/9/98 -0800, Dennis Redmond wrote: Well? By what standards? Unless you mean relatively low unemployment. Not hard to understand, given the 1.2 million employeable Americans in prison. Or do you mean the sheer length of the current US business cycle, now wheezing along in its seventh year? Let's not forget the beneficience of America's creditors, Central Europe and Japan, who have essentially allowed the US to refinance itself at lower international interest rates. The American house of credit cards, shaky as it is, rests on the solid bedrock of Deutsche Bank and Tokyo-Mitsubishi Bank. -- Dennis Dennis, If the U.S. wasn't the global "cash register" (based on extraordinary levels of consumer debt, granted), Japan wouldn't be the export powerhouse that it is. Japan's pre-Keynesian economic policies (what was its latest manuever to inspire recovery from its 7-year doldrums -- a consumption tax ?) may be the mortal threat to the whole E. Asian regional political economy which it has colonized by other means (the keiretsu), inspiring many a competitive devaluation. Your persistent celebration of Central European and Japanese neo-mercantilism misses the flip side of the dialectical coin -- neo-liberal America with its super-dollar and its credit card Keynesianism realizes the value that these countries' workers produce (kind of like the pre-Plaza Accord days all over again). You can't have your cake (boosting Germany and Japan) and eat it too (busting on late imperial Amerikka), b/c they are partners in crime. I'm talking out of the side of my mouth (or some other orifice) here, just to get you riled up and witness your ordinarily acute response. John Gulick Ph. D. Candidate Sociology Graduate Program University of California-Santa Cruz (415) 643-8568 [EMAIL PROTECTED]
Re: What went right?
On Mon, 9 Mar 1998, Michael Perelman wrote: I would like to start a dialogue on why the (U.S.) economy has been doing as well as it has over the past few years. We know about the problems, inequities , but why has the house of cards stayed up as long as it has. Well? By what standards? Unless you mean relatively low unemployment. Not hard to understand, given the 1.2 million employeable Americans in prison. Or do you mean the sheer length of the current US business cycle, now wheezing along in its seventh year? Let's not forget the beneficience of America's creditors, Central Europe and Japan, who have essentially allowed the US to refinance itself at lower international interest rates. The American house of credit cards, shaky as it is, rests on the solid bedrock of Deutsche Bank and Tokyo-Mitsubishi Bank. -- Dennis
Re: What went right?
Michael P. wrote: I would like to start a dialogue on why the (U.S.) economy has been doing as well as it has over the past few years. We know about the problems, inequities , but why has the house of cards stayed up as long as it has. Maggie C. replies: Part of the reason (IMHO) is that the lack of organization in the working class has allowed larger amounts of surplus value to remain in the hands of the capitalists. Returns are not "trickling" down in the form of higher wages or benefits. Right. I think that the rise in profit rates from the 1980s has encouraged real investment. It's somewhat anemic compared to the "golden age" (1950s, 1960s) but it's in many ways an investment-led boom. The rise in profit rates also encourages the stock-market boom and encourages capitalist optimism if not triumphalism. It also means that the corporate debt load has improved tremendously. Another reason is that shift of the cost of the state from business to wage earners. Proportionately, wage earners and businesses have changed places in the last three decades with wage earners footing most of the bill for government. This, and the general pro-business tilt of government (or the larger tilt in that direction than in the 1960s or 1970s) has encouraged the boom. The third reason is that the wages of women and minorities continue to fall way behind those of white men. As women of all races have become a larger portion of the work force in relation to men, capital has reaped greater profits by continuing to keep wages at a very low level... again, right. Another reason for the US boom has increased consumer indebtedness. This, partly caused by relatively stagnant real wages, has allowed consumer spending to do relatively well. On the supply side, the disorganization of labor (elaborated by Maggie) meant that the inflationary potential of the economy has fallen. Less of a reserve army of labor is needed to discipline labor and to avoid squeezes on profits and an inflationary impulse so that estimates of the "NAIRU" have fallen. As Jeffrey Madrick notes in his article in the most recent issue of the NEW YORK REVIEW OF BOOKS, work hours have increased also. The anti-inflationary efforts have been helped by East Asian events. However, this might cause debt deflation, massive financial crises, etc. in pen-l solidarity, Jim Devine [EMAIL PROTECTED] http://clawww.lmu.edu/1997F/ECON/jdevine.html "The only cause of depression is prosperity." -- Clement Juglar.
Re: What went right?
In a message dated 98-03-09 12:10:58 EST, Michael Perelman writes: I would like to start a dialogue on why the (U.S.) economy has been doing as well as it has over the past few years. We know about the problems, inequities , but why has the house of cards stayed up as long as it has. Part of the reason (IMHO) is that the lack of organization in the working class has allowed larger amounts of surplus value to remain in the hands of the capitalists. Returns are not "trickling" down in the form of higher wages or benefits. Another reason is that shift of the cost of the state from business to wage earners. Proportionately, wage earners and businesses have changed places in the last three decades with wage earners footing most of the bill for government. The third reason is that the wages of women and minorities continue to fall way behind those of white men. As women of all races have become a larger portion of the work force in relation to men, capital has reaped greater profits by continuing to keep wages at a very low level. (While the LFP of women has increased and become more permanent, the LFP of men has decreased -- especially black men. So, it is not just that women are a larger part of the permanent workforce, men are a smaller part than they were prior to the early 70s.) maggie coleman [EMAIL PROTECTED]
What went right?
I would like to start a dialogue on why the (U.S.) economy has been doing as well as it has over the past few years. We know about the problems, inequities , but why has the house of cards stayed up as long as it has. By the way, someone on NPR's Living on Earth [their last decent show] gave a wonderful critique this week on pollution credits. He made the point that many of the credits would come merely from the normal process of firms exitting their industries. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 916-898-5321 E-Mail [EMAIL PROTECTED]