roachboy

the g-20 summit is coming up and in the uk press there's been at least some debate about fundamental problems that have shaped the present crisis, what they are and what to do about them---and a parallel debate about what the political perceptions are of each. this seems of basic importance because unless there's some agreement about the core problems, it's obviously impossible to fashion, much less co-ordinate, appropriate responses.

this from today's guardian:

Terry Smith: G20 - urban myths and meddling | Comment is free | The Guardian

this is written from a variant of a neoliberal perspective, yes?
the difference between it and many such you see in the states is it's historical reach--that it at least tries to piece together structural characteristics from looking at a slice of the past that extends beyond the immediate past.

on the one hand, what is outlined here is a policy/action trajectory that runs in exactly the opposite direction from conservative/neo-liberal claims---repeated interventions by the state to ameliorate downturns or crises using devices that function to encourage continued debt accumulation. the writer's position is schumpeter--these actions forestall the inevitable "creative destruction"---which is all very nice if you're looking at it from a remove, but which often looses the shiny adjective when you're going through it.

the diagnosis which follows from it is about demand collapse.

on the other hand, you have an interpretation of the problems of the dollar as reference currency. it's hard to say what the argument is in this section---the author points out the obvious concerning when the global system went off the gold standard (1971) and merely points out that what followed is not "normal" (according to what standard exactly?)---but what do you think follows from this? where do you think the argument goes?

and how do the parts hang together?

what picture does the piece give you of the economic and political situation at this point, in the run-up to the g20?



=========================================================


meanwhile (if i could prevent automerging of posts, i would) this report was just issued by the oecd.

it is sobering and quite different from the relative pollyanna-ness of most american reporting on what's happening:


G20 leaders get OECD warning that global trade is in freefall | Business | guardian.co.uk

link to the oecd press release:
GDP to plummet 4.3 percent across OECD countries in 2009 as unemployment climbs sharply

here's a link to the entire report, which is pretty interesting if you go in for this sort of thing.

http://www.oecd.org/dataoecd/18/1/42443150.pdf

the summary of how we got here is pp. 11-17.

factoids to note: you get a little idea of just how exposed the transnational banking system is to the effects of derivative trading along the way---11-15?% of total assets globally, varying of course by region.

but you get to the scarier stuff starting on p. 17.
have a look.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

Willravel

It seems that in a vacuum of economic information and verifiable economic theory, people like one sentence answers on who to blame and why. I'll be the first to admit that I'm not much of an economist, but the article above is littered with the one-sentence answers we've been seeing from the uncertain centrists or center-leftists over the past few months, and it's not doing anyone any good by simply conglomerating a lot of incomplete answers into a comprehensive stew of uncertainty.

This whole thing (the economic woes since the housing bubble burst) has been like waking up from a collective dream. The most frustrating part for me is in the ability to recognize incomplete and wrong answers while simultaneously not having the ability to develop good, solid theories on how to really get out of this mess without resting on my own held ideologies. Maybe I'm finding myself in the same place as journalists like Terry Smith, I don't know. What I do know is that it can't be comme il faut for people to simply rush to their held ideologies when they're unsure of the best course of action, though is seems to have become common in the world I grew up in.

dksuddeth

One does not have to be a nobel prize winning economist to know that extending ones credit past the limit of what one can payback is going to cause serious issues when that payment comes due. Changing the economy over to a credit based cycle was one of the biggest mistakes that we allowed the banks to propose and implement.

__________________
"no amount of force can control a free man, a man whose mind is free. No, not the rack, not fission bombs, not anything. You cannot conquer a free man; the most you can do is kill him."

Willravel

Ah, but it's not just credit, it's also investment. Frankly, it's any money that isn't real. But it doesn't even stop there. Money itself has changing value based on myriad factors, and those contributed to our mess. But even before there that... etc., etc., etc. The problem is that the contributing factors to our current problems are incredibly vast, and many are systemic. I don't even know where to begin.

roachboy

the problem that will outlines is the basic one, i think, and it's interesting that it is such a problem to work out what the core issues that explain the present economic debacle really are. i've been putting up threads over the past couple months about the economic situation mostly as a way to track the versions that are coming up in the daily-to-monthly press that i know about (which is obviously particular, like what anyone knows about) as a way of tracking the various debates that are happening about what to do.

the oecd report is kinda interesting, but the narrative is less long-term than the data is. everyone's busy in 3-d and i am too--but it's worth the trouble to look at the graphics and try to figure out what you think of them.

what distinguishes most mainstream american accounts from what i've been putting up is time-frame: the american press typically act all surprised that this could possibly have happened and this is in a circular relation with it's short-term timeframe--longer term views show that this is function of quite deep features of contemporary capitalism. the difference between these general views is reflected in the nature of the remedies being talked about or implemented and how they're being implemented. on this, the mainstream us press does no-one any service by simplifying things and presenting them along with simple-minded solutions.

it's also interesting to look at the convergences and divergences in responses--the oecd report shows this is a few neat little charts. the disagreements amongst the political class within the global capitalist order are evident from this.

one of the strongest claims from the oecd report is that this is a synchronized global economic crisis, characterized by more than just the collapse of derivatives and behind that of real estate values, but also by inventory overloads, demand collapse, massive and rising unemployment, deflation...and it is unlike anything that's happened since world war 2.

i sometimes think that putting this stuff up is just a way of coping with frustration. if i can figure out sitting in a chair with the material at my disposal that most of the debates in the united states about what's happening and what should be done are bullshit, it seems reasonable to expect that people with serious information and staffs to work with it would figure it out as well. not that this resolves the problem--rather it opens onto another one: what the hell *is* happening?

it's a conversation worth having, even multiple times as the premises keep changing as data changes and different connections get made.

but i think we're driving at speed toward a wall.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

Willravel

I don't like political discussions as coping mechanisms. Throwing ourselves in front of the train of (seeming) economic inevitability may very well be ultimately futile, but it's all that we can do. And the inner-child optimist living deep inside of me keeps screaming, "Don't you dare fucking give up. You're smart, you know smarter people, you can figure this out."

Yeah, we're probably heading at break-neck speed towards that wall. Still, it's worth fighting tooth and nail for answers and solutions until the moment of impact. If nothing else, we can compile a list of offenders for the surviving mob with pitchforks to go after. At best, though, we still might be able to head this off.

I don't see this happening at the g20, though. Their primary mission, "building and sustaining prosperity", seems stupid at this point. Sarkozy's screaming the simpleton leftist "we need more regulation" line and Obama will probably present some nice sounding platitudes that at best address the problem in the short term. I'm worried neither Obama nor most of the other leadership we'll see at g20 can grasp the scope of what's happening.

roachboy

sometimes i think i shouldn't post while i'm at work...wedging them in between either doing or, more often, pretending to do other things leads to slips.

i didn't mean to imply that these are coping mechanisms in a psychological sense---though i more or less said as much---it's more geared around information and interpretation. my general way of filtering alot of this is as performances of an ideological Problem--frame of reference problem---so the assumptions that came with the language of cowboy capitalism, the washington consensus, neoliberalism inter alia have come undone for alot of political actors---far from all of them--but there's no clear alternate language. politicos have to communicate with their publics, and it's really difficult i would imagine to tool effective communication if you cant really assume that the framework that was dominant six months ago is adequate to the situation being described on the one hand, and if you also have little or no way of knowing whether or how the frames may have shifted at the reciever level---you have the major media outlets, but for the most part---especially television---is stuck in the same problem. and you see versions of this problem in a host of less prominent analyses

if this is accurate then what this information tracks is movement through a giant muddle. and maybe perversely, i'm interested in both the muddle as the space through which policy actions are being floated and presumably fashioned, based on analyses of the situations that are not free of the muddle by any means--and i'm interested in the muddle itself. it's not that often you get to move through an ideological breakdown like this. it's interesting. but it also, from time to time, scares the hell out of me. and i expect it scares alot of people, for different reasons maybe.

thing is that this muddle is not universal, in that it doesn't effect everyone the same way, so here and there you find very lucid analyses--i like that paul krugman has a column in the ny times, but find it strage the extent to which academics seem to be hiding--maybe this situation would have to go on longer and things become clearer in order to reduce the possibility of being wrong by taking interpretive risks--maybe it's the myriad funding problems universities are experiencing---maybe economists think the best thing to do right now is shut up---it's hard to say. it's a bizarre time.

there are a bunch of problems this raises for how you or i might go about processing information, deciding which interpretations seem more or less accurate. insofar as that goes, is this the same old same old, so that nothing moves in how you or i or anyone else thinks really, so that what you read you think more or less accurate because the language feels right and the data conforms with what you think you already know?

it's probably better to be mobile, try out different takes, gather information about different areas---this is why the collective here is great to have active, because folk don't think the same way---but i find that there's a tendency toward keeping things stable that ends up building on itself and conversation gets bogged down in exchanges that amount to reassuring repeats of positions we already know.

this is an interesting time. might as well take advantage of it.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

Willravel

You've noticed them hiding, too? Maybe this whole thing took a bit of steam out of the collective intellectual ego. It takes balls to be loud about being smart, after all. I'm suffering from that myself. We're not so smart as we think we are, but I still find an active role more attractive than spectator or referee.

We should be getting different ideas, but somewhere in the back of our minds we should also be mindful of the difference between idea and ideology. As much as it pains me to say it, there are just as many wrong answers on the left as there are on the right. The only difference is that we on the left aren't as good at organizing wrong people into a movement, which I see as a good thing.

Neeways, the g20 will likely come and go. While it would be nice to hear something new, Sarkozi's statement kinda set the tone for me. I remember the first time I heard about the "10 word answer", on the West Wing, thinking it was a bad idea to put Bartlet in a box like that when he could say a lot more. I'm left wondering if perhaps the French leadership have a bit more to say than just "we need more regulation", but are concerned about confusing people. If only they didn't think we were stupid, what a thing that would be.

dippin

I don't think academics are hiding. Unfortunately, they just lost space in the public debate.

There are letters signed by a few top economists against the stimulus bill, for the stimulus bill, for EFCA...

The academic debate over the great depression has become a hot topic again, and every key economist, sociologist or political scientist has a blog nowadays.

Brad Delong, Dani Rodrik, Krugman, Mankiw, James Galbraith even good old Paul Samuelson are speaking out.

Unfortunately, because they refuse to fit their discourse to the narrative most of the media has decided to adopt, they seem to be ignored.

Willravel

So it's an access thing? Economists aren't really common on 24 hour news networks or the prime time news, even now. I kinda want to ask them.

dippin

In large part yes.

Sometimes I see the media requests for "experts" through my academic organization. The requests nowadays are so specific that they basically just want someone to validate whatever narrative they've decided to push that week. The requests aren't "we are looking for someone who specialize in derivatives markets to discuss the current crisis" but "we are looking for someone to explain why political interference on fannie mae and freddie mac caused the current crisis." I.e., the requests are "loaded," and they just want someone who will rubber stamp whatever nonsense they want.

roachboy

my day gig has me watching the academic journal pipeline in close to real time: this is the basis for my saying that there's not alot of analytic responses to this yet. you see alot more activity in left political journals, but the problem in that area in general is that the fastest out of the gate are those whose positions essentially recycle premises from capital in often quite rigid ways. it's not that this offers no insight--just that the framework is a powerful element of the analyses, so often you're reading frame effects rather than pieces that are based on assessments of the new geographies of capitalism (for example).
and it is simply a fact that universities in the states are under tremendous financial pressure....and also that across the board in the humanities and social sciences there's been a significant retrenchment, a pulling back into disciplinary conservatism. but this is not a suddent development--it's been happening for quite a while, across the bush period. this is perhaps for another thread sometime, despite the fact that i doubt alot of folk would be interested.

sarkosy is basically towing the eu line, operating in lockstep with merkel, and is playing a tactical game aimed at maximizing france--and his own--influence within the reconfiguration that's taking place across this economic situation. when it comes down to it, the conflict is between nation-state based agency, which reflects a federalist understanding of the eu, and more transnational co-ordination, which the administration's plan for the imf indicates they favor another approach to co-ordination. sarkosy is a straight neoliberal whose policies have encountered a quite important level of resistance in france---so there's an extra level to the dance--and it kinda follows that eu countries which already operate within an overall co-ordinating structure would see themselves as simultaneously eager to preserve nation-state prerogatives in foreign-policy areas, and would also see in arguing this line a tactical advantage relative to the americans--because despite this emphasis on nation-state agency, they operate within an already elaborated (if barqoue and cumbersome) mechanism for economic co-ordination.

in le monde this morning, sarko's approach to such things was summed up as älot of door slamming and hot air.
so we'll see how this plays out.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

percy

Well if the academics are hiding, the protesters certainly are not. Got to love the signage though. Some placards are stating anti -capitalism, "ban money", etc,..all the while those protesters being interviewed are bitching because they can't find a job that pays them enough,...well money.

So let them go and smash more windows, all the while concealing their identities. It takes 'money' and lots of energy (and CO2 emmisions) to repair the damage that in one way or the other will come back to them by paying more somewhere else. But they've earned it. They probably made that hard sacrifice to turn out their lights for an hour on Saturday so everything is poshy poshy now. High fives for them all. Stellar bunch.

Anyways, sorry for the digression. Just brought it up incase no one else noticed.

roachboy

G20 to unveil $1tn boost to world economy at London summit | Politics | guardian.co.uk

from this morning's guardian. it looks from this like the american plan for transforming the imf back into something like the institution is was in the bretton woods context and away from being a crisis generator operating in the interest of american-style "globalizing capitalism" throughout the southern hemisphere could be under way. the proposal is just outlined, and is not without complications. i wonder what the implications for governance of the imf will be if the "vast majority" of the funding for this change in role/organization is coming from china. up to this point, governance has been done by an assembly of member states and the number of votes has been proportional to the level of membership payments---so governance is not determined by the origin of the money that flows through the imf, but by the levels of what amount to dues or admittance fees each state pays. from its inception through now, this arrangement has kept the imf a de facto extension of american power.

part of the proposal to revamp/remake the imf that geithner floated a couple weeks ago was a change in governance: an expansion of the assembly and changes to the proportions that had obtained, moving it away from the g8 (more or less) to include china, india, etc..

without a change in governance, this plan is effectively a way to hoover cash surpluses away from china and redistribute it.
with a change in governance, the price of doing this could well be a radical diminuition of american power.

but that's not all that's in this article...
at the same time, notice that the positions of france and germany have not changed--they're asking for much more extensive regulation over the entire financial system that presently exists. the interesting bit comes near the bottom of the article---

so first off, this g20 meeting is not fucking around--this is a serious one. the problems are no joke. pollyanna "just another downturn" time is over (paraphrasing elvis costello)....

but the french and german position seems geared toward two main things: increasing regulation of the financial system AND preventing banks from joining the pattern of fragmentation typical of american-style "globalization"--you know: locate-where-costs-are-cheapest and/or run to the tax havens which also have most repressive labor conditions---the walmart pattern basically....AND both governments seem to imagine that this sort of thing can be done within the context of particular nation-states.

i think they're dreaming. this is a call for a different type of transnational regulation of the economy. this is one of the developments that i've been pointing to and trying to think about---this kind of regulation requires new legal spaces and a new institutional infrastructure. whomever lands on a plan first will have a very significant role in shaping what follows--as you know people don't like uncertainty so they'll tend to rush into whatever form is offered them in times of uncertainty so long it there's some hope that it will make that Bad Bad Vertigo (paraphrasing buddy guy & junior wells) go away.

so i wonder if the french and german dance is in part about this, and not at all about what they're saying. it'd certainly fit with sarkozy's political m.o.----but it also conflicts wholesale with his neoliberal economic views. so it's a quandry.

what do you make of this?

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

flstf

My favorite is the sign that said "We Are Fucked". Pretty much sums it up.