The new recession is arriving?
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This new bailout is not going to work, the state is going to be forced to take over certain sectors of the economy, or probably all, and nationalize all of them, it is going to be the rebirth of state capitalism as a global phenomenon, and the end of the so-called neoliberalism
From a British perspective, it’s quite entertaining how swiftly the Tories discovered an entire grove of magic money trees. Turns out there is always money to spare – if the right people are asking…
Headline in business section of yesterday’s Times;
Get used to more state intervention, it looks like it’s here to stay.
So it looks as if the leftists are going to get their way and “neo-liberalism” is being abandoned. They will soon find that it’s still capitalism and maybe realise that the problem was not the policy called “neo-liberalism” but the capitalist system as such. And that what had always been required was a change of system not a change of policy.
The so-called anti-neoliberal are just proponents of state capitalism, state regulations and state intervention. The new trend is going to be state intervention in large scale around the world including the USA which have tried for several years to eliminate the measures of the New Deal, all those agencies and state regulation that were eliminated by Donald Trump are going to be reactivated again. Capitalists must save their own economic system.
“It was how the government chose to address the economic fallout of the global financial crisis – by underfunding and understaffing the NHS and social care, and by eroding the basic welfare safety net that people depend on when times are hard. As we are now discovering, these were false economies that left us less, not more, prepared for this crisis.
Similarly, if we allow Covid-19 to permanently damage our economic and social fabric, it will be our own fault, not that of the virus. This time we can, and must, do better.”How will the UK pay?
https://www.bbc.com/news/business-52044374
And last week, after the announcement of the restarting of quantitative easing – the purchase from the open market of £200bn of borrowing – there was a little-spotted sentence in the official notice to markets on the purchase of gilts and corporate bonds. It said: “The MPC will keep under review the case for participating in the primary market.”
In English, this means that the Monetary Policy Committee is considering buying UK government bonds directly from the Treasury. .. for many economists this will step over a red line into what is called “monetary financing”, the modern day electronic equivalent of printing money –Recession is a euphemism used by the capitalist economists to avoid a revolt from the working class, the real expression is depression, and it is already here in this worldly society. The only talked about the Great Depression of 1930 as one single situation which can not occur again, econometrists are just playing with numbers, but they are not going deeper into the logic of operation of capital which must have periodically crisis of super-production and stagnation. Like Adam Buick correctly said: We can not confuse financial correction with production downturn
Pandemic Insolvency: Why This Economic Crisis Will Be Different
“Covid-19 has given global capitalism a labour scarcity shock, which is hitting demand and supply simultaneously. Workers cannot work during quarantines and lockdowns, and so firms cannot produce and workers cannot consume. Capitalists and workers are becoming insolvent simultaneously”
“The prestige of Chinese-style state capitalism is growing. Keynesian and Modern Monetary Theory economists will find jobs in high places, and market socialism-with-nationalisations will continue to strengthen its position as the dominant economic doctrine on the left.”
Doctor Karl Marx has been correct all the time
https://www.wspus.org/in-depth/marxian-theories-of-economic-crises/
It looks like all the capitalists’ school of economics are already in the trash can, they all have failed, including the Austrian schools of economics
“Even before the pandemic struck, in most major capitalist economies, whether in the so-called developed world or in the ‘developing’ economies of the ‘Global South’, economic activity was slowing to a stop, with some economies already contracting in national output and investment, and many others on the brink…”
Maybe, in fact probably but it won’t be an example of a crisis caused by the internal workings of the capitalist economic system as most are and as explained by Marxian economics.
It’s a rare example of a crisis provoked by something outside the system (the pandemic was not caused by the operation of the capitalist economy). What the academic economists call an “exogenous” factor as opposed to the “endogenous” one. In this case it happens to be one that would adversely affect production in socialism too.
It might be endogenous:
Is factory farming to blame for coronavirus?
https://www.theguardian.com/world/2020/mar/28/is-factory-farming-to-blame-for-coronavirus
Lew
I don’t think that factory farming would qualify as an “endogenous” cause as it is not something that is inherently part of the way the capitalist economic system works.
This is how Wikipedia defines the difference (not giving a link as that just seems to bugger things up here at the moment) :
“In an economic model an exogenous variable is one whose value is determined outside the model and is imposed on the model (…) In contrast, an endogenous variable is a variable whose value is determined by the model.”
The 19th century economist Jevons’s theory that capitalist crises were caused by sun spots (because of their effect on agricultural production) would be a good example of an “exogenous” theory of capitalist crises.
Not into econometrics myself. It didn’t exist in my day.
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