There is a third alternative. Without taking a position (I haven't
looked at this too much), I note some thinking by Pam Martens and
Russ Martens, who operate the web site wallstreetonparade.com. They
started sounding alarms in the fall of 2019 that the economy was
in serious trouble, and suggest that the current recession wasn't
caused by covid, but rather by a financial crisis whose roots go
back much further. It looks to them (and to me, also) that this is
as much a financial crisis, as the 2008 crisis was, as an economic
crisis. Covid just happened to come along around the end of 2019 to
mask the financial problems. Covid is a good excuse for the bankers
and others, who don't want to acknowledge the inherent weaknesses
of the current financial regime.
They (the Martens) have a series of articles (most recent first: go
to the last article from September 2019 on the list to begin at the
beginning) discussing this:
https://wallstreetonparade.com/9426-2/
They point to the proximate cause of the current situation as being
manifest by a liquidity crisis evident in September 2019. We're not
going to hear much about this on the news because the press and the
politicians don't talk about capitalism vs socialism, and so on (a
taboo subject), and because I suspect the average newscaster couldn't
define terms like "liquidity" and "repo market" if his or her life
depended on it. So, once we are past the worst of covid, we will be
invited to forget about what really happened and look forward to
"progress" in some form, and things won't really be examined or
repaired or corrected.
There is no class analysis there, just banking and financial arguments,
but I believe that the problems are baked into the system, and that
the Martens' point of view is compatible with that. I (not necessarily
they) agree with others that we never really "fixed" the 2008 problems,
or the 2000 problems, or (as Yanis Varoufakis explains) the problems
going back to World War II, or... we can go back to the beginning of
the current capitalist system.
If you've got a lot of fuel stored unsafely, it doesn't much matter
if the fire is started by match or by electrical fault. The system is
broken, which is the oldest and root problem.
On Sun, Dec 13, 2020 at 06:59:41AM -0800, John Reimann wrote:
> Date: Sun, 13 Dec 2020 06:59:41 -0800
> From: John Reimann <[email protected]>
> To: [email protected]
> Subject: [marxmail] A question about Marxist economist Michael Roberts
>
> I have some questions about the analysis of Marxist economist Michael
> Roberts, and I would be interested in the thoughts of others. Roberts
> writes:
> "But the ensuing slump in world production, trade, investment and
> employment did not start with a financial or stock market crash, which then
> led to a collapse in investment, production and employment. It was the
> opposite. There was a collapse in production and trade, forced or imposed
> by pandemic lockdowns, which then led to a huge fall in incomes, spending
> and trade. So the slump kicked off with an ‘exogenous shock’, then the
> lockdowns led to a ‘supply shock’ and then a ‘demand shock’."
> I have trouble with this. At least here in the US, it seems to me that it
> did start exactly with a "demand shock", not a collapse in production. Due
> to Covid, "demand" in the hospitality, transport and service industries
> (restaurants, hotels, airlines) collapsed. That was the start of the
> economic decline, no?
> Roberts has some great material on the tendency for the rate of profit to
> decline, but he sees that as the one and only contradiction of capitalism.
> Anything that hints at the inability of workers to buy back all they can
> produce is simply Keynesian reformism to him. I think this is why he
> doesn't see the collapse in demand here as the immediate cause of the
> economic crisis. What do others think? Also, any suggestions for good
> analysis of the present economy?
> Roberts' article:
> https://thenextrecession.wordpress.com/2020/12/02/a-credit-crash-ahead/
>[...]
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