>Rakesh, please stop calling people ignorant and please stop informing the >list about how incorrect Jim D.'s ideas are -- even though he keeps saying >that you are mischaracterizing him.
Michael, you're joking right! Paul Phillips went bonkers against me. He called me ignorant of social democratic economics (though my guess is I know galbraith's and darity's work better than he does) and expressed moral repulsion against me; i just replied that he was ignorant of marxian crisis theory. As for Jim D, he has--AS I UNDERSTAND HIM--two major pieces of evidence against the falling profit theory: (1)profit rates had shown no falling trend before investment demand collapsed (2)the explanation for FROP is a rising OCC the proxy for which also has shown no upward trend. I responded (1)there is now evidence (anecdotal yes) that books had been cooked, exaggerating the profit trend going into this recession. I think for example it is certain that investment demand for software companies was not as strong as reported profits indicated, and we have this mess of offbook accounts as Gretchen Morgenson (sp?) has been reporting in the NYT. (2)whether the existing capital was being valorized, *new* investments were not proving profitable, leading firms to instead buy back their own stock as inventories were thus building up in dept I; this inventory build up then led to steep price competition and steep profit rate declines, e.g., Intel vs. AMD. (3)the recession insofar as it is ending is not ending due to stronger prices or consumption (though these can result from a pick up in investment activity) but the restoration of profitability in production due (for example) to the cheapening of constant capital. Now when Fred finds the time he will give another and doubtless more empirically rich answer to Jim D's important challenges. I have given no answer to Jim D's point 2 yet, in part because I am trying to understand whether the proxy is adequate. RB
