----- Original Message ----- From: "Chai-on Lee" <conlee@chonnam.ac.kr> Sent: Wednesday, September 26, 2001 4:25 AM Subject: Evidences for the severity of this crisis > Jerry asked me to provide evidences for the following assertions. > > > One apparant thing is that the present economic crisis is going to be > unprecedented. It is more severe than the 1929 one, in its scale, in its > coverage, in its less remained instruments. < > What evidence do you have for these assertions? > > At present it looks not so severe. But it will be as it is just beginning now after July this year (when the service and construction sectors began to decline along with the manufacture) > It is going to be severe for the following reasons. > > (1) Almost every country on the whole globe fell into a synchronized depression, which is unprecedented. > (2) For the last 9 years, with no exception, economic boom has been artificially created by credit expansion. IT sector in particular has been boosted uttermost despite it had no profitability. > (3) Yes, IT industry contributed to productivity increases in other sectors. But other sectors' productivity increase itself did not guarantee the profitability of such sectors, for it was not related with the extra surplus value which arose when the productivity gaps were wide between countries. > (4) Except a few advanced countries, almost every continent is in political turmoil. In Asia, many presidents and prime ministers have been replaced in undue courses. In Latin America, too, political turmoils are growing. The working classes on the whole globe are synchroniously mobilized. This is also unprecedented. > (5) The capitalist class has less instruments to resolve the worsening situation. The FRB keeps on lowering the interest rates (will it do so until they reache at zero level?). Keynes described this situation as the euthanasia of the rentier class in the Conclusion of his "The General Theory of ..", His vision was the end of capitalism. > Well, maybe, the interest rates will abruptly jump up when the US war begins only to reduce its psychological effect on the economy. But its physical effect cannot be hidden. > (6) The legitimacy will be in question when the central banks cannot but intervene to boost stock markets. Why not boost labor markets instead of the stock markets? > > I think something must be done in preparation. > > In solidarity > > Chai-on
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