What a wonderful world…
I’ve rediscovered The Browser, but not all of my random readings are based on its links.
- The Long Legs of the Crash: 13 Unexpected Consequences of the Financial Crisis, by Daniel W. Drezner, is a so-and-so list. “(1) Your government will get smarter… (2) …and more corrupt.” (Agreed with the second one.) “(7) Skirts will get longer.” (Nay, not this time! Make love, not money!) “(8) Your military just got bigger.” (Possibly. Are we talking of China here?) “(9) State schools will be cool.” (Again, possibly. But I’m less concerned with the official educational paths. How about the coaching industry going bankrupt? I’ll drink for that. How about the stupidest CEOs who have dozens of project managament diplomas on their walls going broke? I’d drink for that one too.) “(13) Great Depression lit will be chic.” (It is.)
- BTW, Reading can increase life expectancy & improve quality of life, says a translation from Haaretz:
“We found that people who read every day live longer,” said geriatrician Dr. Jeremy Jacobs of Hadassah, the lead author of an article recently published in The Journals of Gerontology. The article described a long-term study being conducted by Prof. Yohanan Stesman at Hadassah.
Were the subjects reading on paper, or on computer screens?
- Ups and Downs: The Economic Crisis (pt. 3), by Paul Mattick:
In reality, the current worldwide slump, far from a mysterious anomaly, represents the return of the capitalist economy to the dark side of its pre-World War II history.
The boom-bust cycle started up as soon as the growth of a money-centered economy and the Industrial Revolution led to the establishment of capitalism in wide enough swaths of territory for it to become the dominant social system. Before that, of course, economic life was disrupted by a variety of disturbances: war, plague, bad harvests. But the coming of capitalism brought something new: starvation alongside good harvests and mountains of food; idle factories and unemployed workers in peacetime despite need for the goods they produced. Such breakdowns in the normal process of production, distribution, and consumption were now due not to natural or political but to specifically economic factors: lack of money to purchase needed goods, profits too low to make production worthwhile. Major downturns have been identified in every decade from the 1820s forward, increasing steadily in seriousness up to the Big One in 1929.
[...] The fact that in a market economy decisions about where to invest money and so about what is produced, and in what quantities, are made prior to finding out what quantities of particular goods are actually wanted by consumers, and at what price, seems obviously relevant to recurrent fluctuations in economic activity, in which different parts of a complex system adjust to each other over time. Another basic aspect of capitalism—that the total money value of goods produced must be greater than the total money paid out in wages in order for profit to exist—suggests an inherent imbalance between production and eventual consumption.
[...] What determines these changes in the profitability of capital investment? This question—which Mitchell did not really answer—bears not only on capitalists’ expectations and so their willingness to invest funds, but also on their ability to invest, since the money available for investment is either drawn from existing profits or borrowed against future profits, which must then come into existence if loans are to be repaid.
[...] The people who produce goods for a business have no direct relationship with the people who will buy and consume those goods or services, even though it is ultimately for these consumers that they are producing. The workers in bakeries and automobile factories do not know who will buy the bread and the cars they make, or what quantities they want and can afford. The same is true of their employers.
[...] Competition for profit forces businesses to charge similar prices for similar products; since they must themselves buy goods (labor and materials), their ability to compete by lowering prices depends on the production techniques they employ. In this way, the social character of the system asserts itself through pressure on individual firms to raise productivity, insofar as this leads to higher profits. Historically, this has led to a strong tendency towards decreasing the labor force in comparison to the amount it produces (while, of course, increasing the number of workers absolutely as the system grew). [...]
This shift has obvious consequences for the profitability of capital. If profit is the money-representation of the labor performed by employees of all of society’s businesses in excess of the work required to replace raw materials, tools, and those employees themselves, then it will decline relative to total investment if businesses increasingly invest more of their money in machines and materials than in labor. Karl Marx, who first figured this out, called it “the most important law of modern political economy”: the tendency of the rate of profit to fall. Marx’s explanation of the tendency to declining profits, noticed well before him by nineteenth-century economists, is a controversial one, to say the least. But it led to a prediction that has proved all too correct: that the history of capitalism would take the form of a cycle of depressions and prosperities.
[...] But in a capitalist economy, what causes suffering for individuals can be good for the system. As firms go bankrupt and production goods of all sorts go unsold, the surviving companies can buy up buildings, machinery and raw materials at bargain prices, while land values fall. There is market pressure for the design of new, more efficient and cheaper machinery. As a result, the cost of capital investment declines. At the same time, rising unemployment drives down wages. Capitalists’ costs are thus lower while the labor they employ is more productive than before, as people are made to work harder and on newer equipment. The result is a revival in the rate of profit, which makes possible a new round of investment and therefore an expansion of markets for production goods and consumer goods alike. A depression, that is, is the cure for insufficient profits; it is what makes the next period of prosperity possible, even as that prosperity will in turn generate the conditions for a new depression.
I disagree with the last cited paragraph. Yes, the cost of capital investment declines, but if almost everybody would be unemployed in a severe depression, WHO would buy the merchandise in order to produce “a revival in the rate of profit”?!
- When jobs disappear — they reused (see the 2nd image) a questionable graph previously mentioned as possibly irrelevant, as it tracks the employed workforce, not the unemployment!
- Have Geithner’s Zombie Ideas Won? Paul Krugman on the “Cash for Trash” Program. In short, Krugman says that the main problem is “that the market is undervaluing all of these toxic assets”. How brilliant. How unique.
- Tim Geithner’s Plan: A Nigerian 419 Scam? Funny. Who Can At Least Tolerate the Geithner Plan? Still supportive of the idea! Does the new Geithner plan provide a path to intelligent nationalization? Intelligent, my ass!
- Paul Krugman: Smart economist, or all-knowing being? The answer is “no way”: Krugman did NOT a pretty good job of predicting this mess!
- James K. Galbraith: No Return to Normal. Why the economic crisis, and its solution, are bigger than you think. They’re not bigger than I think! And I do think that FDR did what he should have done. Take however this interesting observation:
What did not recover, under Roosevelt, was the private banking system.
- Why Advertising Is Failing On The Internet. I’m afraid advertising is failing in all kind of media, while destroying that media (magazines, radio) altogether!
- Oh, I am crying with tears: House Of Cards:
This is the paradox of deleveraging: it’s good for borrowers to reduce their debt, and good for lenders to be more rigorous in their standards, but when everyone deleverages at once it does real damage. It’s like a drug addict whose dealer cuts him off: it’s good to stop using, but withdrawal is painful. The end of the credit-card boom isn’t going to wreak as much havoc as the end of the housing boom. But it is helping to put a brake on our spending. And, at this point, every little bit hurts.
- Retraits de drapeaux anti-Otan: les protestations continuent (à Strasbourg). Here you have my opinion on that:
- C’est un point de vue intéressant : Comme en 1930, une course de vitesse est engagée contre la crise.
Nous sommes en 1930. La crise a éclaté quelques mois plus tôt. Partout le chômage augmente mais rien d’irréversible ne s’est encore produit. Nulle part la crise sociale n’a encore débouché sur la barbarie. En 1930, dans son premier livre, Contribution aux Etats-Unis d’Europe, Pierre Mendès France écrit que, pour éviter le chaos, “une course de vitesse est engagée”, et pour gagner cette course de vitesse, Mendès France affirme qu’il faut créer une monnaie unique européenne dotée d’une vraie gestion politique et investir sur le plan social les marges de manoeuvre créées par cette monnaie unique.
Monnaie unique. Gouvernement politique. Projet social. En 1930, un sursaut européen est possible car l’Allemagne est un pays démocratique. Hélas, Mendès n’est pas écouté et, trois ans plus tard, après l’arrivée au pouvoir de Hitler, plus personne ne propose un sursaut européen… En 1930, il était possible d’agir. Trois ans plus tard, il est trop tard.
- Deux verres de vin rouge n’augmentent pas les risques de cancer. Certes. Toutes ces études sont bidon.
- The French Nuclear Industry Is Bad Enough in France; Let’s Not Expand It to the U.S. How about China then? The Russians are building nuclear plants in China!
- Yasmin Alibhai-Brown: In an unequal society, we all suffer. Marx thought the same, I guess.
- Jonathan Aitken: The way we treat prisoners creates a conveyor belt of crime. Yes, there is no country under the sun where the “correctional system” has a meaning.
- That’s a queer one: MMS: Solution of Sodium Chlorite and Citric Acid. The post says that the “Miracle Mineral Supplement” supposed to treat malaria (or cancer, HIV, etc.) is nothing more than a… 28% sodium chlorite solution! MMS De-Mystified says it’s indeed sodium chlorite (NaClO3) in distilled water, and that it produces chlorine dioxide when an “activator” of lemon juice, or a 10% solution of citric acid is added. Holy shit! Next we’ll find that pigs who were fed with MMS started to fly, and that AIG can too benefit of the MMS, eh?
