At 10:30 AM 12/6/97 -0800, Jim wrote:
>Specious predictions aside, I think that the more that the
>establishmentarians are convinced of the "new economy" scenario in which the
>business cycle (i.e., the possibility recession) is abolished, the more that
>government and business leaders make decisions based on this assumption, the
>more unstable the economy is. The self-fulfilling prophecy works for awhile,
>but policies such as the welfare deform, which not only punish the poor but
>undermine the famous automatic stabilizers, make the economy less stable.
>[...]
>The international situation is hardly the same in the 1990s as it was in the
>1920s, since there are not only similarities but differences. One difference
>is that while in the 1920s, tariff competition (and eventually tariff war
>and actual war) was the order of the day, nowadays, it's more a matter of
>competitive austerity (recently joined by East Asia), orchestrated by the
>IMF/World Bank. These international organizations lack global perspective
>except for making sure that _loans get paid back_ and the whole world
>becomes one big market. I don't think that anyone in power is really
>worrying about the stability of the global economy.
In fact, couldn't you argue that the IMF "bailouts" being imposed on
countries like S. Korea are setting us up for an even greater crisis? If
I'm not mistaken, one big piece of the IMF plan is that bailed-out
countries have to cut back worker income, which will chop back their
consumer markets, and push harder for export-led growth using strategies to
make their goods less expensive. Isn't this bound to exaccerbate the
problem of too many goods chasing not enough money and, in a few years,
push the global economy into even more trouble?
Anders Schneiderman
