O fim do empregoe o desafio de Louçã...
«É um princípio de um sistema bancário público em que possa predominar uma política socialista, uma política pública com orientações para escolhas sociais para a economia. É exactamente assim que faria um ministro das Finanças que fosse do Bloco de Esquerda» — Francisco Louçã in “New Crisis, Old System”; VI Convenção do Bloco de Esquerda (06-02-2009).
Francisco Louçã propôs hoje a proibição dos despedimentos em empresas que tenham resultados, elegendo o combate ao desemprego e a nacionalização de sectores estratégicos como resposta ideológica e prática à "crise do regime" (Lusa/SIC).
"Perhaps as little as 5 percent of the adult population will be needed to manage and operate the traditional industrial sphere by the year 2050. Near-workless farms, factories, and offices will be the norm in every country".
— in Jeremy Rifkin, The End of Work (1995, 2004).
There is cause to think the problems in the financial sector remain grim despite the huge amount they have received from taxpayers and that there are few sources of growth in the private economy. Consumers are strapped and business won't invest until recovery has begun. The model is broken. Default rates are rising for auto loans, credit cards, and other forms of borrowing. Commercial real estate which expanded 40 percent in the three years after 2005 (when housing loan expansion peaked). We have reached the end of the regime of accumulation that started in the late 1970s which featured financialization - growth through massive debt creation and speculation as a defining characteristic - deindustrialization and globalization.
— in The Present Crisis of Capitalism, Its Short and Long Term Implications. By William Tabb.
Entre o nariz de Sócrates que não pára de crescer e o descontrolo retórico do pigmeu Augusto Santos Silva, o
Bloco de Esquerda chega aos dois dígitos nas sondagens — já
aqui tínhamos previsto, a 28 de Janeiro, 11% de intenções. Importa pois começar a discutir o que quer o
Bloco de Esquerda quando for governo, provavelmente associado ao Partido Socialista que sobreviver a José Sócrates e à tríade que colocou este pinóquio no sítio onde está para vergonha de qualquer lusitano com a espinal medula no sítio.
Ideias frescas vindas do Bloco? Pois que venham!
Louçã, enviou-nos, para já, três recados:
- se for ministro das finanças, irá proibir que as empresas com 'resultados' despeçam;
- se for ministro das finanças, nacionalizará sectores estratégicos da nossa economia como resposta à 'crise de regime';
- se for ministro das finanças, iniciará a formação de um sistema bancário público dotado de uma política predominantemente socialista.
Nada que o Reino Unido e a América de Obama não estejam dispostos a subscrever de cruz. Mas não chega. Nem sequer para alterar o sistema fiduciário de valor que conduziu à actual crise sistémica mundial, para o que faltaria acabar, por exemplo, com os
gnomos e testas de ferro da especulação mundial, mais o chamado
shadow banking (Banco Privado e quejandos), a economia de casino, e as sofisticadas arquitecturas computacionais responsáveis pelo buraco negro dos
derivados. É preciso ir ainda mais fundo: até à divisão internacional do trabalho, até à repartição dos recursos energéticos e naturais disponíveis —que chineses e russos querem mais equitativa—, e de caminho, até às actuais regras do comércio mundial.
EU threatens legal action over American car industry bail-out
(03-02-2009) The EU today threatened legal action and retaliatory measures against the US if the Obama administration enshrines a "Buy American" clause in its multibillion-dollar economic stimulus package.
...The most contentious clause in EU eyes would require US firms to use local steel and other components in state-funded projects. Similar national measures have been adopted or considered in Argentina, China, Indonesia, Ecuador, India, Russia and Vietnam, putting them on a WTO surveillance list. — (Guardian.co.uk)
Quando Obama decide indexar os apoios estatais à indústria americana ao consumo de aço Made in USA, pondo em causa cláusulas anti-proteccionistas fundamentais assinadas pelos membros da
OMC, o caminho, aqui há vários meses anunciado, do regresso ao proteccionismo está aberto. Há já algum tempo que defendo a necessidade de um novo Tratado de Tordesilhas, desta vez entre a Ásia e a Euro-América. O grande Médio Oriente e a África serão as áreas de disputa entre os novos blocos planetários. A Rússia, que começou a reconstituir paulatinamente o seu espaço vital, permanecerá o pêndulo angustiante entre o Oriente e o Ocidente, cumprindo assim uma velha tradição!
Para já, a Europa está cada vez mais nervosa com a evolução tectónica vertiginosa em curso. Barafusta contra os Estados Unidos, enquanto o garnisé de Paris recomenda às empresas francesas subsidiadas que consumam materiais e serviços franceses, o sonâmbulo de Downing Street faz discursos xenófobos, e uma parlamentar europeia da reaccionária Polónia repudia prisioneiros de Guantánamo, não apenas no seu país, mas em toda a União Europeia!
A moeda europeia (1), apesar das suas ambições, poderá em breve sofrer um enorme trambolhão. Basta para tal que alguns dos seus países membros entrem em processos de falência semelhantes ao da Islândia. O Reino Unido (2), a Grécia e Portugal, já para não mencionar a Ucrânia e a Hungria, estão a um passo de suspender pagamentos internacionais. Se e quando tal acontecer, o Euro começará a resvalar, haverá inflação ou mesmo hiperinflação na Europa, e surgirão finalmente novas moedas de reserva regionais — na América, na Ásia e nas petro-monarquias do Médio Oriente.
Parar as privatizações em curso num país à beira da falência, de que é exemplo a criminosa operação de venda ao desbarato da ANA, única e exclusivamente para ajudar a financiar a construção do desnecessário NAL de Alcochete; travar a intrusão inopinada e abusiva da Iberdrola na rede de barragens e sistema hídrico nacionais (3), sob os auspícios diligentes do vende-pátrias Pina Moura; desfazer a escandalosa apropriação indevida desse bem público inalienável que é a água por parte dos piratas do Bloco Central da Corrupção (investigue-se o Instituto da Água quanto antes!); e preparar o país para um verdadeiro
raid de nacionalizações e renacionalizações dos seus principais recursos estratégicos, ditado por razões de Estado, e não para recompensar especuladores e ladrões de toda espécie, como tem vindo a fazer o actual governo de direita, do PS, a propósito do BCP, BPN e BPP, eis alguns detalhes da coisa pública que o
Bloco de Esquerda tem que começar a explicar aos seus eleitores se quiser saltar dos actuais 10% de expectativas para o ambicioso desiderato de rachar ao meio o actual PS, com ou sem Alegre.
Terá, por outro lado, que ser mais claro nas suas intenções e propor desde já medidas precisas sobre, por exemplo, as execuções das hipotecas imobiliárias que parecem estar a disparar e em breve ameaçarão aqueles milhares de portugueses que, como bem descreveu Elisabeth Warren, em
Two Income Trap, caírem numa ou mais de três situações críticas: perda de emprego, divórcio (4), ou doença prolongada. A Caixa Geral de Depósitos, governada por piratas do Bloco Central da Corrupção, que vem aliviando escandalosamente as perdas colossais de Joe Berardo e chafurda no lodo do BPN e do BCC, é a mesma instituição que avança sem vergonha —e com a polícia de choque à frente, se for preciso— para a expulsão de famílias inteiras de apartamentos cujas hipotecas foram executadas, recolocando depois os apartamentos recuperados como garantias executadas no mercado da especulação. É uma vergonha vê-los a fazer leilões obscenos por esse país fora!
Para os chineses a palavra
crise tem dois significados: por um lado, proclama a existência de um drama, por outro, alerta para a emergência de uma oportunidade!
O fracasso do neoliberalismo que os piratas que tomaram conta do PS abraçaram fatalmente (5), mas de que o colapso económico-financeiro em curso é a moral mais cristalina, deve ser aproveitado para corrigir o actual regime político, ao mesmo tempo que é crucial aproveitar quanto antes a oportunidade de proceder a uma profunda e urgente limpeza do lixo acumulado nos cantos da democracia.
O escândalo Freeport (6) é um escândalo político, pois os muitos casos de polícia que encerra têm origens e desenvolvimentos partidários. Deixar morrer mais um exemplo da corrupção que tolhe e faz apodrecer a democracia portuguesa seria um sinal não só de cobardia cívica, mas acima de tudo de uma enorme estupidez estratégica.
Franciso Louçã lançou um desafio. Não sei ainda se estará à altura da jogada. O tempo está, no entanto, a seu favor. Que pena terem deixado cair a Joana Amaral Dias! Com um pouco de MT ia lá. Seguramente muito melhor que o hirto Fazenda, para as lides que se avizinham.
NOTAS
- The Euro at ten: Is its future secure?
By Simon Tilford, in Centre For European Reform - essays. (PDF)
The euro is riding high on the foreign exchange markets, and the financial crisis has graphically illustrated that euro membership provides a safe haven. On the face of it, this would seem to be a strange time to question the stability of the currency union. But this essay argues that the euro is about to face its first serious test, and that the stability of the eurozone cannot be taken for granted.
- Today's Trope: Britain May Need IMF Bailout
Asking for an IMF bailout is among the worst things countries can do in terms of damaging national prestige. It's the global political economy equivalent of cadging distant relatives (i.e., "the international community") for money to help tide you over. I've covered several of the most recent approaches to the IMF including Iceland, Ukraine, and Hungary. Now, the leader of the British Conservatives, David Cameron, is leading a charge that the United Kingdom may soon go hat in hand to un grand seducteur Dominique Strauss-Kahn. — in IPEZONE.
- Se daqui a dois ou três anos a Iberdrola for nacionalizada pelo Estado espanhol, em que situação fica o controlo português sobre a energia, as albufeiras e os sistemas de irrigação associados às barragens que o actual governo —por cupidez pura e dificuldades de tesouraria— quer entregar a uma empresa tipicamente protegida, e bem, pelos governos espanhóis?
- É por isto que Cavaco Silva e a Igreja têm razão na questão da lei do divórcio. O problema não é já ideológico, mas de pura gestão de uma das principais crises estruturais do sistema capitalista. Quando é que a bronca Esquerda ideológica começa a pensar pela sua própria cabeça, e abandona os manuais desactualizados do maniqueísmo pseudo-marxista?
- A cantilena pró-socialista de esquerda assumida recentemente por José Sócrates não passa disso mesmo, de mais uma ladaínha do vendedor de cobertores de Vilar de Maçada. Na realidade, o que o actual primeiro ministro e a tríade de Macau estão a montar pela calada é uma verdadeira rede de interesses económicos privados destinada a expropriar o país dos seus principais recursos e infraestruturas! Trata-se de um roubo em larga escala, articulado com vastas manobras internacionais, onde pontuam, vejam só, grandes almirantados da pirataria mundial, como por exemplo, a célebre Carlyle. A mesma que, pelos vistos, há algum tempo atrás espevitou o fogo escandaloso do Freeport! Porque seria?
Vale a pena ler com atenção, a este propósito, esta esclarecedora passagem de "The Present Crisis of Capitalism, Its Short and Long Term Implications", por William Tabb:
The Carlyle Group has a team raising a billion dollar fund to focus on U.S. infrastructure, such as rail, airports, water assets, as well as schools and hospitals.
There are many other such entrepreneurial endeavor. GE and Credit Suisse have a new global fund to invest in power plants, pipelines, airports, railroads and toll roads. GE can contract many parts of the deal to its other divisions which can provide inputs and systems for the infrastructure projects.
Governments contracting with such providers will know less about the details and costs than the providing consortia.
Such arrangements have long been pushed on developing countries by the World Bank and other funders. As in the instances of other aspects of neoliberalism first demanded of weaker developing nations which have become part of the policy givens in the United States and some other advanced economies such a new paradigm is coming unless there is a reassertion of the capacities of the public sector here.
As Jenny Anderson reported in the New York Times not long ago, "Reeling from more exotic investments that imploded during the credit crisis, Kohlberg Kravis Roberts, the Carlyle Group, Goldman Sachs, Morgan Stanley and Credit Suisse are among the investors who have amassed an estimated $250 billion war chest much of it raised in the last two years to finance a tidal wave of infrastructure projects in the United States and overseas."
Norman Y. Mineta, a former secretary of transportation was hired by Credit Suisse as a senior adviser to such deals. Other former public servants are lining up for such positions as intermediaries between private and public at handsome remuneration.
Given growing public deficits, like third world countries Let us hope and work to see that America will not give away its roads, bridges and airports in exchange for the promise of better maintenance by the private sector. The taxpayer will get immediate relief and long term dependence on for profit owners.
- Rui Gonçalves, secretário de Estado do Ambiente de Sócrates que aprovou o licenciamento do Freeport, é desde Abril de 2008 vogal da Empresa Geral de Fomento e, por inerência, assumiu os cargos de presidente dos conselhos de administração da Valnor, da Rebat, da Resat, da Residouro e ainda de vogal da Valorsul, passando a presidir a partir de Setembro de 2008 à Resistrela (criada para gerir resíduos sólidos urbanos em parte da Beira Interior). Todas estas empresas da área do saneamento básico foram criadas por José Sócrates quando era ministro do Ambiente. De 2002 a 2005 foi professor convidado da Universidade Independente.
REFERÊNCIAS
- ¿Vuelve Keynes?
Por Ignacio Sotelo
7-02-2009 (El País) La actual socialdemocracia está impulsando un falso keynesianismo: el Estado, con el dinero de todos, salva bancos y empresas, pero la propiedad, y con ella la capacidad de decidir, queda en manos privadas.
... Al mostrar que la inversión no está ligada al ahorro, sino a las perspectivas de ganancia, Keynes critica el supuesto equilibrio entre producción y consumo que había constatado la economía clásica, en función de la cual el desempleo desciende si bajan los salarios y en general los costos de producción. Keynes recalca que si se bajan los salarios, al encogerse la demanda global, se obtiene el efecto contrario: más paro. Además, una política de achicamiento de los salarios no sólo es poco razonable, es que ni siquiera resulta factible. Bajar los salarios, con los conflictos sociales que comporta, sólo se lograría en un régimen autoritario que hubiera suprimido, entre otras, la libertad sindical.
... Keynes no sólo plantea, si fuese preciso, volver al proteccionismo, sino que pone en tela de juicio la prerrogativa exclusiva del empresario de decidir en qué y cuándo invierte su dinero, algo que atañe a la esencia misma del capitalismo. La aporía intrínseca del sistema radica en que no puede mantener el pleno empleo sin garantizar previamente las inversiones de la manera más conveniente para la economía nacional, y no simplemente para el interés del inversor. Y no hay "mano invisible" que haga converger el interés general con el egoísmo individual. Keynes fue claro: "Creo que una socialización bastante completa de las inversiones será el único medio de aproximarse a la ocupación plena".
... Nadie invierte para crear puestos de trabajo, por mucho que una monserga constante insista en que la inversión privada es el factor principal para reducir el paro. En vísperas de elecciones, los partidos prometen bajar los impuestos para aumentar los beneficios de las empresas, lo que, dicen, redundará en inversiones que creen puestos de trabajo, como si hubiese una relación directa entre cuantía del capital disponible y monto de las inversiones.
... Las dos recetas que ofrece Keynes para garantizar el pleno empleo -proteccionismo y socialización de las inversiones- no encajan en el capitalismo en su forma liberal primigenia, pero mucho menos la primera en la época de la globalización y la segunda cuando se ha hundido el movimiento obrero.
... ¿Vuelve Keynes? En la crisis que ha desencadenado la total desregularización, los dueños de los bienes financieros y de producción necesitan dinero público en cantidades ingentes. Amenazan con que, de no recibirlos, podría ocurrir que se derrumbase el sistema. Pero aun en situación tan extrema, de ningún modo están dispuestos a asumir el más elemental de sus principios, a saber, que el que pone el dinero adquiere la propiedad y decide. El Estado, con el dinero de todos, estaría obligado a salvar bancos y empresas, pero la propiedad, y con ella la capacidad de decidir, debe quedar en manos privadas.
... La relectura que se hace de Keynes para justificar el enorme endeudamiento público que conlleva las ayudas a bancos y grandes empresas contradice por completo las intenciones de Keynes. Lo más grave es que la socialdemocracia de nuestros días haga suya esta interpretación.
- The Un-stimulating Stimulus
By Martin Hutchinson (Prudent Bear)
February 02, 2009 — Until the House Republican revolt this week, there has been a worldwide consensus that the way to get out of a deep recession is through fiscal "stimulus" – gigantic gobs of public spending that explode the budget deficit but provide jobs to those without them. It’s a theory first publicized by John Maynard Keynes, but it rests on a central fallacy: the "job-providing" expenditures have to be financed somehow, and their financing may crowd out other private-sector projects that would have created more jobs.
... Of the roughly $850 billion in expenditures and tax rebates outlined above, only roughly $81 billion in expenditures and $13 billion in tax reductions would have any economic spin-off effect or supply-side effect respectively. That's 11% of the total, much of it being spent in 2011 or later. All the remainder would have a Keynesian multiplier of 1.0 or less, in other words run the risk of being on a net basis damaging to the economy by sucking resources out of other more productive uses.
Add to the above the financing and inflationary problems produced by a federal budget deficit that was already out of control before this "stimulus" and the waste and corruption inevitable in government programs of this size (such as the infamous "Davis-Bacon" provisions adding 20% to federal construction costs by requiring unionized labor). Add also damaging requirements such as the "Buy America" provisions in relation to steel and manufactured goods, which significantly raise the danger of a trade war that would hugely damage the U.S. and world economy.
It becomes pretty clear that, far from repeating the successes of the Interstate Highway System, the proposed economic stimulus is likely to have a net depressant effect on the U.S. economy. Misguided large-scale government activities of this kind produced the disaster of the Great Depression in the United States at a time when Britain among other countries was able to achieve economic recovery by pursuing the opposite policy of state retrenchment.
- From Financial Crisis to Sustainable Global Economy
By Jonathan Lash on January 29, 2009
Much of the world’s attention is fixed on the brutal effects of the global financial crisis. But sooner or later—sooner we hope—the global economy will rebound. Markets will recover, and stocks will rise. Nature, on the other hand, does not do bailouts. The effects of today’s greenhouse gas emissions—like those of yesterday and tomorrow—will be permanent, at least in the timescales that we care about.
... Economic recovery around the world will be driven by thousands of firms in each country making decisions about what products to make, what technologies to use, and who to hire. It is essential that these decisions incorporate the risks and opportunities presented by a carbon-and-resource constrained world. It is critical that they create jobs in building the products that will help improve lives with reduced impact on the Earth’s resources.
... Right now is the best opportunity I have seen in 30 years as an environmentalist to align economic, social and environmental goals. The United States Climate Action Partnership, of which WRI is a founding member, and whose 26 corporate members include General Electric, Duke Energy, DuPont and General Motors, last week renewed and strengthened its call for the U.S. Congress to adopt a mandatory national cap and trade system to reduce current U.S. greenhouse gas emissions by 80 percent by 2050. (Texto integral)
- The Present Crisis of Capitalism, Its Short and Long Term Implications
By William Tabb
A talk given to actists @ the Left Labor Project, January 6, 2009.
The title for my talk I was given is too ambitious by far but I think the intent is to have a discussion of where we are in economic-political history and that is what I shall offer starting with two ways of looking at the coming year(s) for the economy. The predictions for 2009 come in two persuasions. The economists views generally speaking are summed up by the Financial Times as "Whatever happens, 2009 will not be pleasant" and it will be "a year to forget." The Economist greeted the New Year in its January 3rd issue with an Economic Focus "Diagnosing Depression." enlightening us that since the word seemed to be "popping up more often" it would explain criteria for distinguishing a depression from a recession the latter being a decline in real GDP that exceeds 10% or one that lasts more than three years. Since this one began in December 2007 we are off to a good or perhaps bad start. Previous bad recessions in 1973-75 and 1981-2 each lasted 16 months. No one believes this one will be shorter. Yesterday the Federal Reserve announced their shock at how bad things have gotten in the last month. If history has lessons for us it is that financial crises, even ones as bad as the one we have on for years not months, unemployment rises and output falls by large amounts.
On the other side are forecasts from people selling stock. They predict recovery to occur at the end of 2009. Some economists agree. However such reassurance comes from many of the same folks who said a nationwide fall in American house prices was impossible and that financial innovation had made the financial system more resilient, so The Economist was not altogether impressed by the optimists. Nor am I for reasons to which I now turn.
There is cause to think the problems in the financial sector remain grim despite the huge amount they have received from taxpayers and that there are few sources of growth in the private economy. Consumers are strapped and business won't invest until recovery has begun. The model is broken. Default rates are rising for auto loans, credit cards, and other forms of borrowing. Commercial real estate which expanded 40 percent in the three years after 2005 (when housing loan expansion peaked). We have reached the end of the regime of accumulation that started in the late 1970s which featured financialization - growth through massive debt creation and speculation as a defining characteristic - deindustrialization and globalization.
US-based transnational capital sought both markets and production venues elsewhere and squeezed labor harder. Money was made not only from intensifying exploitation in ways business union leaders were unprepared for since they were still looking for class cooperation when, as the head of the UAW at the time, Douglas Fraser, explained capital was waging a one-sided class war. Foreign competition from Japan and later other Asian exporters was a major factor along with U.S. producers increasingly moving off-shore and introducing more capital saving technology. For the last forty years or so the American workers's income has stagnated, benefits and job security eroded and in the privatization, anti-tax-anti government climate public services deteriorated. Companies have increasingly maximized short term returns, corporate raiders and private buyout firms have restructured much of American industry, working people have borrowed more and personal debt grew dramatically. As Linda Bilmes and Joe Stiglitz have written "In the eight years since George W. Bush took office, nearly every component of the U.S. economy has deteriorated." We know the broad strokes if not the numbers - 5 million increase in the number without health insurance, 4 million manufacturing jobs gone, consumer debt has dubbed and nearly a fifth of homeowners owe more than their home is worth and between 2002 and 2006 the wealthiest 10% of households received 95% of all income gains. The Iraq war built on a lie will end up costing at least three trillion and we don't count the Iraqi people killed, wounded and displaced. This was paid for with borrowed money, mostly from foreigners. One in eight Americans the USDA tells us is "food insecure," that is they don't get enough to eat. Food banks are overwhelmed. In December 608,000 Americans, 74% more than last year are not seeking work because they think no jobs are available. They are not counted as unemployed only "discouraged. I don't have to go on. American consumers cannot borrow any more and are actually paying down debt levels they cannot sustain as best they can. Spending is falling, unemployment will keep rising into the foreseeable future. More bubbles will burst as Americans pay down unaffordable debt and demand for energy and other raw materials and the output of manufactured goods they create continue to decline.
In the United States in 2008 two million manufacturing jobs were lost. Everywhere now manufacturing activity is falling, even in China and India, in Germany, France, Italy and Spain, in Japan and Hong Kong. While the stock market in the United States last year fell by more than it has since 1931, by 38 percent, with devastating impacts on the retirement prospects of millions of American workers this was considerably less than the losses in the rest of the world where comparable stock indices fell by 46 percent. In Iceland by 90 percent due to the financial excesses caused by deregulation and outrageous expansion of their bank's borrowing in foreign currencies. But losses were also worse than in the U.S. in Japan, France, Italy, Sweden, South Korea, Brazil, China and India among others. It is not only in the United States that the share of gross national product that goes to wages has declined while the share going to capital has increased, this has happened in three quarters of the countries in the world according to the International Labor Organization between 1995 and 2007.
The systemic challenge may be greater than the current discussion and certainly policy measures reflect. Dependence on unsustainable levels of debt and global capital flows reflect the stagnationist tendencies of the advanced economies and the shift in where production takes place globally, processes of combined and uneven development inherent in capitalism but which now reach crisis proportions. International negotiation and coordination is imperative but difficult. As in the Great Depression each nation's capitalists (and their workers) will be inclined to become more intensely nationalistic. A crucial dimension of the seriousness of the situation is the foreign debt of the United States which has been running huge current account deficit and borrowing from the rest of the world at an unsustainable rate. The global imbalance is difficult to address. The U.S. must consume less. China will have to let its people consume more. The great increase in the US deficit necessary in the current crisis will increase foreign borrowing worsening the imbalance. Other big issues such as resource limits and global warming will have to be faced and will impact, or should impact how and what is produced. These too represent major crises for capitalism and need to be faced.
The damage caused by the financialization of the last three decades or so is enormous. It is likely without it stagnation would have come sooner. It was the borrowing that kept the economies growing and trade flowing. But the high leverage which allowed investment banks to borrow 97 cents for every three pennies they had in their own capital is over. The NINJA loans (no income no job or assets) for home buyers are no more. Housing will take years to recover and again not only in the United States. The hedge funds and buyout firms face redemptions and many are going belly up along with the banks which lent to them - or these banks would collapse if your tax dollars weren't being showered on them. The subprime loans we have heard so much about some $1.5 trillion worth were packaged and leveraged to roughly $140 trillion in fictitious capital, "a global pyramid of junk" as Nomi Prins writes. The stronger banks are buying up the weaker ones, usually with federal assistance for most of the risk. And still the banks aren't lending, companies can't borrow, and consumer credit is being limited. Where is economic growth going to come from?
The answer of course is the government. We also wait for a new long term growth paradigm. Financialization was tried, produced speculative bubbles, and collapsed despite efforts by Paulson and Bernanke to put Humpty- Dumpty back together again. It is over as the source of economy-wide growth. The only hope on the horizon are the huge spending projects Obama has proposed. There is no choice for two reasons. If he doesn't there will be another Great Depression and second as Christia Freeland, Financial Times chief correspondent in the U.S. wrote in a remarkable column headed "Friction over greedy bosses lets loose genie of class politics," begins "This week America discovered class warfare;" Americans have woken up to a nightmare. Their way of life, or the life they aspired to, is a dream in a very different sense than the phrase usually has conjured. There has been a lot written, especially before the election of the breakdown of trust in corporate and political leadership. David Gergen who heads the Center for Public Leadership at Harvard University wrote that "Over the last few years the trust between the public and the elites has completely collapsed." Larry Sabato, director of the Center for Politics at the University of Virginia similarly offered the opinion that "The greed and corruption of the corporate class in America is behind this public revolt." This latent but increasingly visible class hatred was a factor in electing America's first Black president.
The election of Barack Obama and a Democratic congress changes some of this. In the incoming president's stimulus package which gets bigger by the week as the economy sank and the departing Bush hands in pockets looked on there is hope that the crisis will be less disastrous. But while much is to be supported in his proposals they may still be too little and parts of it are misdirected. This is partly because the Republicans cling to pre-Keynesian ideas that government should not spent too much and balance budgets as quickly as possible. They are supported by Blue Dog Democrats keeping federal spending measures too low to end the crisis. If the Republicans follow their House Leader John Boehner's lead and agree with his November 2008 statement that "We're in tough economic times....More Washington spending isn't the answer" they will undercut the recovery agenda. They are aware that if a real new New Deal saves us they will be out of power for decades. They must as a survival tactic for their party subvert economic recovery while seeming to stand up for principled responsible behavior.
In any case what appears (and is in fact) as a huge increase in federal spending of $760 billion (5.3% of GDP) as proposed by Obama economists is not enough. Unemployment will continue to rise over the next two years even with this stimulus and federal debt will row substantially requiring huge increases in foreign borrowing. Because American manufacturing has been decimated over recent decades much of the tax cut will be spent on imports increasing the current account balance of payment deficit. Global imbalances as I shall say more about will become central to solving what is a worldwide crisis.
Polls show two-thirds of Americans support new spending to stimulate the economy but 56% worry government will spend too much. Republicans use this as a bargaining chip with Obama to push his program toward tax cuts which benefit the affluent and especially business tax cuts which it is claimed will stimulate investment. But new orders for manufacturing are at their lowest level since the end of WW II. With no growth and expectations of continued falling sales there will be little new investment this way. The money spent on public needs does produce jobs and increases spending. Mitch McConnell the Republican leader in the Senate wants aid to cities and states to be loans not grants, a way to keep the amount down when the need to maintain their spending should be obvious. Retailers are practically giving stuff away to cut their inventories after the worst holiday season in memory and the conservatives cling to their "government is the problem" mantra of low spending and lower taxes. While liberals worked to use government to save capitalism yet again the left perhaps grateful that Bush is gone and reformers are back in. But unless there is working class pressure the center will cave to the right on important matters pertaining to the priorities of ordinary citizens.
If there is concern with too large deficits they could pay for the spending with serious tax reform, returning the share the rich pay to what it was before Ronald Reagan for example. Such taxes collected from the upper one percent could go a long way to simulating growth since the rich do not spend it but the money recycled to cutting payroll taxes for example would be spent by workers and give an incentive for employers since it would lower their labor costs (Kuttner, 2009:14). Republicans would see this as class warfare of course but the argument could be made it is a pragmatic policy for increasing spending without increasing the deficit. Of course it could be argued that some serious class struggle is exactly what is needed in the face of the catastrophe the greed of capital has produced.
The Obama strategy proposals do suggest a new, if still conceived of a as temporary regime of accumulation in government-led industrial policy and public investment. It is too early to tell how radical the intervention will be but as I say there are political constraints that would have to be overcome and Obama's preference for bipartisan cooperation are not encouraging. He has already agreed to tax cuts which make no sense as a priority use of $300 billion to get conservative support. Compared to Paulson who moved to save the banks without "punishing" them, that is the stockholders and top executives or forcing them to start lending again and offered little else (the dud banks should have been shut down or nationalized for real) the Obama activism is admirable. It also reflects a new way, or rather a return to an older way of thinking about government functions. It is New Deal employment creation with the rationale of investing for the future rather than income redistribution. Certainly there is need for school building repair, infrastructure spending and broadband expansion. Energy efficiency in federal buildings (the government is the largest real estate owner in the country) would save money for tax payers and energy of course and could be a model for similar efforts by others. The letting public facilities decay is scandalous of course and rehabilitating the public purpose is an important change in direction. They are necessary. So are assistance to local and state governments and help to people without health care, those losing their income and their homes. The logic is smart government to meet obvious need as well as stimulate growth. It will not be enough but it is a start.
There is much to be undone and repaired. Consider health care. Peter Orszag, Obama's head of the White House Office of Management and Budget is calling for comprehensive health reform as the "key to our fiscal future." That is, he is not saying it is an expensive program but people need it. He is saying health care reform is necessary to save money, not by spending less but by spending more and changing health care delivery so that it does not consume the future federal budget. He wants to prevent higher spending unrelated to better outcomes, digitizing health records to save tens millions of dollars in the future, and bringing real efficiencies rather than cutting needed health care services. We shall have to see what happens but it is a better approach than slashing Welfare State services. But again this is a time when more could be done to push the balance of class forces between capital and labor and to expose what the logic of capital costs us.
It is unlikely there will be more radical steps to challenge the causes of ill health. The government will still subsidize high fructose corn syrup and hydrogenated oil so that bigger bottles of Coke can continue to be sold cheaply along with potato chips, creating obesity and the diabetes epidemic. The Department of Agriculture will sponsor unhealthy lunch programs. Industrial hog farms will be subsidized to pollute the surrounding area without proper regulation of waste disposal, the energy and toxic chemical intensive industrial farming will go unchallenged, and the rest. The ecological crisis cannot be put on hold waiting for recovery. The cancer causing pollutants industry creates will not be controlled unless there are popular movements which offer a broad critique of the degradations of capitalism and specific analyses sector by sector of the harm it does. There must be a socio-environmental alternative to the current growth paradigm and yes to militarism hurts in so many ways one of which is it misdirects attention from human needs here and abroad.
If we are not vigilant the infrastructure will be built in public-private partnerships giving control to private investors as has been happening and contracts given out Halliburton-style. How infrastructure projects are done matters. There is no reason the federal government following the privatization of so many functions once done by government employees but now outsourced to the likes of Halliburton to rebuild our infrastructure on such a model. Indeed it has a name, "the Infrastructure Privatization paradigm." It is seen as a win-win for cash strapped governments, the banks and other private investors looking for a new long term inflation linked (raise tolls and user fees when costs go up to keep income high) asset class. Infrastructure offers a combination of hard assets and visible long-term earning streams. The Carlyle Group has a team raising a billion dollar fund to focus on U.S. infrastructure, such as rail, airports, water assets, as well as schools and hospitals. There are many other such entrepreneurial endeavor. GE and Credit Suisse have a new global fund to invest in power plants, pipelines, airports, railroads and toll roads. GE can contract many parts of the deal to its other divisions which can provide inputs and systems for the infrastructure projects. Governments contracting with such providers will know less about the details and costs than the providing consortia. Such arrangements have long been pushed on developing countries by the World Bank and other funders. As in the instances of other aspects of neoliberalism first demanded of weaker developing nations which have become part of the policy givens in the United States and some other advanced economies such a new paradigm is coming unless there is a reassertion of the capacities of the public sector here. As Jenny Anderson reported in the New York Times not long ago, "Reeling from more exotic investments that imploded during the credit crisis, Kohlberg Kravis Roberts, the Carlyle Group, Goldman Sachs, Morgan Stanley and Credit Suisse are among the investors who have amassed an estimated $250 billion war chest much of it raised in the last two years to finance a tidal wave of infrastructure projects in the United States and overseas." Norman Y. Mineta, a former secretary of transportation was hired by Credit Suisse as a senior adviser to such deals. Other former public servants are lining up for such positions as intermediaries between private and public at handsome remuneration. Given growing public deficits, like third world countries Let us hope and work to see that America will not give away its roads, bridges and airports in exchange for the promise of better maintenance by the private sector. The taxpayer will get immediate relief and long term dependence on for profit owners. There will be pressure on the Obama administration to not "undermine the free market with too much government control."
Financialization as an accumulation strategy has failed and brought on what began as the subprime crisis and then a financial crisis and is now a general global economic crisis of massive proportions. Neoliberalism has failed as a way to control the developing world and the US and the other countries of the core now face increasingly powerful countries of the global south who will not accept the IMF and WTO rules applied to their disadvantage. But these people are not simply going away. The money changers will ave to be driven from the temple. It is not clear at all that this is Obama's intention. His economic team is composed of the people who led the deregulation which created the financial crisis. Obama may be the vanguard of a new global Keynesianism and global social democracy in an effort to relegitimate a now widely discredited capitalism. Certainly multilateralism is better than Bush unilateralism and talking to enemies better than threats and violence as the responses of choice, environmental sustainability surely a better goal than refusing to sign up for even modest efforts like the Kyoto Treaty.
Up to now Blairism and other Third Way social democratic accommodations to corporate globalization have been as discredited as the harsher versions of neoliberalism. The Europeans social democrats while criticizing US-style capitalism have moved to incorporate its logic so that their capitalists will not be left behind. The current crisis has to some degree ironically raised their stock as they reverse course and strengthen the state as an economic actor, picking up the rhetoric of progressive government involvement and it is surely the case that government will have to get capitalism out of the crisis it has created for itself and us. The question is what pressure will there be from labor and the left for more basic change if the recovery does not come in the next year or eighteen months and I do not think it will. Can Obama be pushed like FDR was? What are the demands? What are the organized vehicles for pressure? The left has been down so long it is not clear we know the answers to these questions but if the crisis is deep and long as in the 1930s movements will develop and demands will be articulated. We need to speed up the process. Obama will have a honeymoon period but if things do not get better soon more forceful socialization needs to be demanded. People before profits will confront capital's demand that growth can only come by giving them more first. It is this logic which will have to be challenged by the sort of progressive political movement of the kind that pushed Roosevelt in the 1930s.
William K. Tabb is Professor Emeritus, Queens College, City University of New York. He is the author of The Amoral Elephant: Globalization and the Struggle for Social Justice in the Twenty-First Century (Monthly Review Press, 2001) among other publications.
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