Re: [OPE] Early Notes on the Present Crisis

The wild cards come from where you least expect them.

On Wed, Sep 17, 2008 at 12:08:26PM +0100, GERALD LEVY wrote:
>
> > resources should probably continue an upward trend in price, after the speculative > sell off stops. Manufacturing should continue downward, except for resource input > prices where they are strong and except for intellectual property & monopolistic > forces prevent a fall. Financial assets are likely to fall for a while. What the > aggregate means is anyone's guess.
>
>
> Hi Michael P:
>
> Yes, that sounds about right.
>
> The 'wild cards' include state economic policies (which at the present time
> are inconsistent) and the _extent_ to which developments in the US economy
> will continue to affect world markets and vice versa. {NB: I leave out working
> class struggles in the US as a 'wild card' because - at the present time - it seems
> highly unlikely that this will figure in the outcome of the present economic
> crisis.} What I mean by the latter is that it is unclear exactly and to what extent
> the US economy will bring down other economies and global trade and then what
> the 'multiplier effect' will be. Insofar as the former is concerned, after bailing out
> Fanny May and Freddie Mac, the US government said 'no more bailouts'. And so,
> after Lehman Brothers was unable to find a White Knight or the Fed arrange a shotgun
> marriage, it failed. Yet, today's news is a bailout of the insurance titan, AIG. I don't
> think the US government - to the extent that it represents the collective interests
> of capital - had any choice but to do this. Their ideological bent was such that
> they didn't want to, but had AIG failed then the effects on both the US and
> world capitalist economy would have been profound. Coming out of this
> crisis (whenever that happens) the lesson learned may be the same as that
> learned (and now re-learned) in the Great Depression - that capitalism has come to
> require state intervention to overcome crises.
>
> Left unanswered are: what exactly are the requirements for a capital expansion,
> how will capital move from the current crisis to its resolution, and what are the
> implications of this for the working class, global peace, the environment, etc. ???
>
> In solidarity, Jerry
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-- 
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu
michaelperelman.wordpress.com
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