Re: Re: Re: Re: Rentier's hoarding ?
I think that all of this agreement about the cause of the Japanese depression. Japan used macroeconomic policies to prop the economy up in the wake of the oil shocks, leading to rapid accumulation and a wild run-up in land prices. Finally the overhang caught up with Japan. I would like to add that the Japanese depression seems to be unprecedented in the sense that, for what I understand, relatively few people have been severely hurt in the process. I've never heard before of an Atilla-less depression -- although I understand that quite a few people in the second and third year manufacturing sectors have been hurt, still seems small by capitalist standards. Jim Devine wrote: Doug is suggesting that the problem _might_ be solved the good old Maggie Thatcher or Attila the Hun way, imposing a shake-out that drives out the weakling capitalists and imposing wage cuts, deunionization, etc. on the working class. This would raise the rate of profit and eventually stimulate accumulation and recovery, if it doesn't cause underconsumption. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: Re: Re: Rentier's hoarding ?
At 02:00 PM 3/24/00 -0500, you wrote: I said I thought Japan looked to be in the throes of a classic overaccumulation/profitability crisis. For decades, state policy and the financial/governance structure permitted firms to invest to gain market share without paying much attention to ROI. Now they've had their reckoning - but state policy has still put a floor under the deflation, preventing the full-scale liquidation that might clear the way for a new round of accumulation. Also, the Japanese ruling class seems not to have had either the power or the confidence to crush its working class the way the Americans have, a la Volcker/Reagan in the late 1970s/early 1980s. In standard macroeconomic terms, this says that Japan's problem isn't the matter of the "liquidity trap" (horizontal LM, perhaps due to the fact that nominal rates can't fall below zero) but a vertical or very steep IS curve. In prose, businesses won't accumulate fixed capital and people won't buy (very many) new houses or consumer durables no matter how low the real interest rate is. This means that the Krugman plan (inflation driving real interest rates negative) won't work, because businesses don't want to accumulate further debt or more capacity, while consumers also don't want more debt. A low interest rate would most stimulate the Japanese economy if it caused the Yen to fall, encouraging their net exports to rise. That is, it would help Japan only at other countries' expense. (Of course, the US is the world's buyer of last resort at this point, so that the US helping to keep Japan from falling even lower.) Doug is suggesting that the problem _might_ be solved the good old Maggie Thatcher or Attila the Hun way, imposing a shake-out that drives out the weakling capitalists and imposing wage cuts, deunionization, etc. on the working class. This would raise the rate of profit and eventually stimulate accumulation and recovery, if it doesn't cause underconsumption. Jim Devine [EMAIL PROTECTED] http://liberalarts.lmu.edu/~jdevine
Re: Re: Re: Re: Rentier's hoarding ?
Doug is suggesting that the problem _might_ be solved the good old Maggie Thatcher or Attila the Hun way, imposing a shake-out that drives out the weakling capitalists and imposing wage cuts, deunionization, etc. on the working class. This would raise the rate of profit and eventually stimulate accumulation and recovery, if it doesn't cause underconsumption. There are also significant risks to this strategy, if taken seriously. If such "restructuring" were to provoke a more general banking / financial system crisis, Japanese would dump all those dollars, bonds, and dollar-denominated assets that it holds, which could spell the end of the U.S. ability to act as consumer of last resort--and hence, to its "New Economy" euphoria. (I think Taggart Murphy makes this point pretty well in his NLR piece.) All best Christian
Rentier's hoarding ?
the insanity of a crisis of overproduction. The Japanese are not starving and, with all their foreign asset holdings, have a few more cards to play in the international economy. So why should they worry that their balance sheets look grim by US accounting standards? The Washington Post, January 3, 2000, Monday, Final Edition Japan Inc. Workers Get Harsh Dose of Economic Reality; High Jobless Rate Gives Rise To Homeless Camps, Suicides Doug Struck; Kathryn Tolbert, Washington Post Foreign Service The line of blue-plastic huts along the banks of the Sumida River, built by the homeless here whose numbers have nearly doubled in four years, is one sign of Japan's painful economic restructuring. The human side of this upheaval in the Japanese workplace also is evident in the soaring suicide rate, in the new corps of jobless who spend their days on park benches so their families think they work, and in the despair of new graduates collecting rejection slips. Japan is perhaps uniquely ill-suited for the wrenching dislocation that other economies have experienced, including the "downsizing" of America's industrial base. The nation's post-World War II boom was built on an ideal of loyalty to one company, rewarded by lifetime employment. Now middle-aged men are thrust out of work in a culture where changing jobs is difficult, where unemployment still carries a stigma, where age discrimination is legal, and there is little social safety net. The country was shocked last March when one distressed longtime employee of the tire manufacturer Bridgestone Corp. committed suicide after holding his company president hostage. That was the most public of what were nearly 33,000 suicides, by far the highest number since World War II, and three times the number of automobile fatalities. Police, who keep careful track of this phenomenon, said the largest increase was in suicides caused by economic worries, including job loss and forced early retirement. Nobuhito Kimiwada, who helps run a legal help-line for distraught workers, said: "We talk about restructuring, but we ought to have a goal. One goal is to get more profit for stockholders. In the American system, there is a huge discrepancy between the rich and non-rich, at the expense of the workers. Is that what our goal should be? I seriously hope not." Japan's unemployment rate has been on a decade-long upward march. At 4.5 percent it seems low by American standards, but in Japan it is only a notch below last summer's 4.9 percent historic high. The unemployment rate among men 24 or younger is officially 10.7 percent, but analysts say it is likely much higher. The jobless also include many middle-aged men who will be unable to find jobs matching their skills or former salary. These are casualties of company cutbacks, such as the 51,000 Nissan Motor Co., Nippon Telephone Telegraph Corp. Mitsubishi Corp. announced recently. "People are not fired--it's not American-style layoffs," said Akira Takanashi, chairman of the government-sponsored Japan Institute of Labor. Instead, more than half of large companies have "early retirement" programs that encourage--or, in any cases, force--employees to quit as early as age 49. Those who do not take the hint can be treated heartlessly. Stories abound of employees shunned, with no work, no responsibility and no real contact with the other employees until they quit. (clip) Louis Proyect Marxism mailing list: http://www.marxmail.org/
Re: Rentier's hoarding ?
I just saw Louis's report. Yes, Japan now is starting some mass layoffs, but it is amazing how long they have put this off. The U.S. in 1929 tried to pressure firms to resist layoffs. Many large firms resisted about a year. Louis Proyect wrote: The Washington Post, January 3, 2000, Monday, Final Edition Japan Inc. Workers Get Harsh Dose of Economic Reality; High Jobless Rate Gives Rise To Homeless Camps, Suicides -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Mark Weisbrot Z-net Commentary
Here is today's ZNet Commentary Delivery from Mark Weisbrot. If you pass this comment along to others, please include an explanation that Commentaries are a premium sent to Sustainer Donors of Z/ZNet and that to learn more about the project folks can consult ZNet (http://www.zmag.org) and specifically the Sustainer Pages (http://www.zmag.org/Commentaries/donorform.htm. Here then is today's ZNet Commentary... -- Spring Protests in Washington, D.C: Another Seattle? By Mark Weisbrot The Clinton administration claims to have learned something from the outpouring of protest against the World Trade Organization (WTO) last December. "Those who heard a wake-up call in Seattle got the right message," said President Clinton. Maybe so, but then they hung up the phone and went right back to sleep. Fortunately for the world, the administration and its allies will not slumber for long. In just a couple of weeks, thousands of protesters will take to the streets of the other Washington -- the District of Columbia -- for a week of events that will probably rival Seattle in its impact on the institutions of globalization. Religious groups will lead a rally for debt relief for poor countries on April 9. Organized labor will gather its troops and others to oppose the expansion of the WTO on April 12. And on April 16, the International Monetary Fund (IMF) and World Bank will face the first major demonstrations ever to take place on their home territory. In addition to a rally and march, many protesters will attempt to shut down the spring meetings of the Fund and the Bank with non-violent civil disobedience -- as they did with the WTO meetings in Seattle. The roots of discontent This is a movement that is not going away. In some ways it is reminiscent of the early stages of protest against the Vietnam War. Those who understand this movement know that unless there is a drastic change in our government's policy, it will continue to grow in numbers and in strength. The analogy is appropriate along a number of dimensions: For years the American public was told that we were fighting for the freedom of Vietnam, and that victory was around the corner. As the casualties mounted and official lying was exposed, and the horror and cruelty of the war became more widely known, people began to question the prosecution of the war. Then they began to question the justification, and finally the motives of our entire foreign policy. This time it is our foreign economic policy that is being held up to scrutiny, and for millions of Americans it has already become discredited. That this could happen at the peak of our longest-running economic expansion, with unemployment at a 30-year low, is further evidence that this movement is deeply rooted. The Seattle protests plucked the WTO from its cozy obscurity and dragged it out into the daylight, where ordinary citizens could see the impact that it has on their lives, and the lives of other people around the world. This forced President Clinton to scuttle the WTO's Millennium round of negotiations. The April protests will cause many people to learn about the IMF and the World Bank for first time, and others to find out more about what they do. This is almost certain to diminish support for these organizations. The case against the IMF The IMF is the most powerful financial institution in the world. It is arguably the most powerful institution of any kind, in terms of its impact on the lives of hundreds of millions -- and indirectly, billions -- of people. This is due to an informal arrangement under which borrowing countries must first reach agreement with the IMF, in order to get credit from other multilateral institutions, governments and often private sources as well. This gives the IMF the power to choose finance ministers and central bankers, and even to topple governments that do not comply with its conditions. The U.S. Treasury Department is the overwhelmingly dominant influence in the IMF and holds this system together. So anything that weakens support for the IMF in its home base has the potential to collapse the whole arrangement. The recent report of a congressional commission that sharply criticized the IMF, and called for downsizing its mission, has contributed to this weakening. And the fight between the Clinton administration and Europe over who would head the IMF =AD recently resolved with the administration= agreeing to support Germany's No. 2 choice, Horst Koehler -- is another sign of strain. The IMF is commonly portrayed as a global rescue operation -- an international "lender of last resort" analogous to our own Federal Reserve at the national level. But this is not true, even in those instances in which the IMF intervenes in a crisis situation. The Federal Reserve will provide funds to a failing financial institution in the United States, in order to prevent the collapse from spreading. The IMF does something quite different: It helps to
