The end of Amerocentric Neoliberalism?

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http://www.tvo.org/TVO/WebObjects/TVO.w ... 9614656001

^ Political economist James Laxer seems to think so.

His basis is the sheer magnitude of US debt (personal, trade, & governmental) as well as the lack of a strong manufacturing base in the country.

Ah, good old Reaganomics and those Laugher Curves....

Everything he said was true. And we are not the production powerhouse that we used to be. A shift from high capital production to services has taken place. In a real sense, our economy has gone soft.

The only way to cure that is for Americans to literally invent and remake technology and I don't really see that happening, at this juncture. If by some miracle the U.S. became the world leader in controlled nuclear fusion (don't hold your breath for that) it would turn us around.

ruveyn

May be not so unlikely after all: https://lasers.llnl.gov/

Then again, doe USA will keep his lead? USA is not very motivated to keep on science reshearch lately.

What does that have to do with the video link?

There has been a furious neoliberal counterattack. The "There is No Alternative" doctrine is being trotted out again. After the failure of the system and the crash, the public debts incurred to save the failed financial sector is being used to justify further neoliberal reforms. If they get away with it in Greece, that will look very bad. The media is all in lockstep in favour of neoliberalism.

This is totalitarianism.

We are the world's leading technological and scientific powerhouse. Also, on a more basic level, we are the world's single largest food producer. Fantasies about America's collapse will remain just that. Without us, the rest of the world would starve.

Yes, the high debt levels are likely to be a problem. How big of one is hard to tell. It is possible that we will experience a slow decline and, twenty years from now, we might not be able to unilaterally dictate the terms of international arrangements anymore. That's OK.

When the faith is lost in money, specifically the american dollar, then it doesn't matter any longer if the US is the world powerhouse in Science (which it isn't) or in industry (which it isn't), or in service (it might be that)

Remember, when faith in money is lost, money is worthless, and you cannot pay police, military, government officials, etc. So there will be no one to control the physical destruction that will follow. So world leader in food production or not, if the farm-owners (which are mega-corporations) cannot pay the workers, because there is no money to pay them, the food won't be grown. They cannot say the farms will pay in food, because they won't have the opportunity, because the food will be pillaged, and not re-planted.

With the failure of money, the failure of infrastructure is almost immediate. With the failure of infrastructure, there is no ability to rebuild until that infrastructure has been restored, but without a state to rebuild, there is no rebuilding.

It never ceases to amaze me how people try to paint the free market as an enemy of freedom.

Neoliberalism is the force it is because it's been demonstrated REPEATEDLY throughout the last one hundred years that a market economy is essential. The collapse of the Soviet Union demonstrated this very well. The failure of this financial crisis is not the failure of the economic system, rather it's the failure of governments to abide by free market principles.

Some of you are already shaking your heads and writing me off as an apologists for the big bankers and financial institutions that are at the heart of the collapse. It is true that capitalists are often the greatest danger to capitalism, and I will not defend the shaky business practices that contributed to this mess.

What no one wants to acknowledge, however, is that there's nothing "free market" about bailing out these gigantic, bloated, out dated companies and Banks because they are "too big to fail." True, the bailouts were justified by supposedly protecting the market from incalculable economic damage, but that's not what government is for.

Had these "too big to fail" companies been allowed to fold, the economic collapse would have been nastier but it would also have been much briefer. The idea is that when a business goes under, it frees up labor and creates room for a new enterprise, or several new enterprises, to take over. Obviously, neither has happened, because nothing frightens politicians more then anything that upsets the existing order, and you better believe that the bailouts were designed to do just that: Protect the Establishment.

Instead, our government, first under Bush (worst president of my lifetime), then under Obama (who at this rate may end up the second worst president of my lifetime) gave money to these parasites so they could stay in business. And people wonder why the collapse seems to continue despite the Ministry of Truth telling us over and over again that jobs are opening up.

The problem with neoliberalism is not that it has unsound principles, it's that neoliberals don't really know what's good for the market. They may have embraced free market ideals, but whenever the market undergoes prolonged turbulance they feel obligated to "save" or "protect it". Which of course just leads to more nonsense.


(Edit: By the way, I'm new here (hello everyone ) so I don't know what the forumgoers are like around here, but I've been around nationstates. net where people will argue with you just for suggesting the sky is blue. Long story short, I would be happy to debate anyone PROVIDED THEY READ MY ENTIRE POST AND ANSWER ME POINT FOR POINT. I don't have patience with people who take a single paragraph, quote it, refute it, and then ignore the rest of the post. Just had to get that out there!)

But people will not let them do so when things are bad... Democracy cannot co-exist with free-markets


You are absolutely right, it is not free-market. But we live in the real world, we can't have a perfect free-market, not just because people won't allow it under democracy, but because there are too many barriers to that free market, and the participants of the free market are "free" to erect even more barriers. One simple one is to make yourself so big, that when you fail, the world HAS to bail you out... And that's just what Freddy Mac And Fannie May did.


Okay, here is where i disagree with you, but i'm not sure it's really disagreement, rather just adding something to change the perspective.

If we were talking about industry, with physical products being churned out... So the automotive industry bailouts have to be separated from the financial bailouts here.... Then this free market thing would've sorted itself out all by itself.
But we're not talking cars, we're talking dollars, and there is no value behind a dollar, save for another dollar. That isn't an issue of free markets, it's an issue of something else, quite distinct. The spin off effects of the loss of 1/3 of the world's artificial worth would shake the confidence in money so badly, that if not "remedied" (I used that word superficially, it doesn't matter what the fix was... only that it was perceived that there was in fact a fix, regardless of it's efficacy) money would've collapsed. The free enterprise system cannot work without money... Nor can it work without the constant exponential growth of said money.

Okay, here's where free-markets fall apart.. that key phrase exponential growth.
best analogy for it is bacterial growth...
If you have a jar of bacteria doubling in number every minute, and it takes one day for it to multiply enough to fill an entire jar, at what time is the jar half full?
the answer is 1 minute before midnight.
So, when half of something is used up, you have only one doubling period left before it's all gone, even though it took maybe 500 or 50000 doubling times or more to use up the first half.

Free-markets require exponential growth... unless there is exponential growth in a) money, b) the market, c) resources to consume in production and d) numerous other things not important for this discussion.... then you can't have exponential growth, unless the growth is just illusionary, such as what the financial markets are. They are not real, they are not backed by real value as I said before... They are simply the chits of millions of gamblers. But if everyone has to call their chits at the same time... the whole tower of cards collapses in a pile of cards after someone opens the window.


I hate to defend bush... be he and obama had to.
They are pawns in a game that is far bigger than the US gov't.
to have a free market, means that the participants are free... including free to cheat.
To stop that cheating you would have to police the free markets... in which case they wouldn't be free either.
It's a paradox, and you can't overcome it. It is bound to fail, economists as far back as Nicholai Kondriatieff (spelling might be off) understood this.. though he figured it would work itself out "somehow"


You are right there is nothing unsound about it's principles... in a perfect world it would work perfectly.
But then again, anything is correct, if all the assumptions you make leading up to the statement are all correct.



Hope I replied to enough to not pee you off
And Welcome to WP

I guess there is the possibility that the organised currency mafia will boycott American dollars as a kind of strike to blackmail the government into breaking its contracts with ordinary people (whilst the contracts with the Banksters are sacred parchment) and destroy Social Security and Medicare... but there is no risk of default because of the nature of fiat currency and as long as aggregate demand is depressed, there is no risk at all of inflation that would erode the dollar's value. Now there is the possibility of an organised criminal attack for blackmail purposes and this phenomenon must be addressed and this should include executions of the guilty parties as the terrorists that they are.

Exclavius

First, I would like to thank you for reading and answering my post. I realize we may have gotten off a bit on the wrong foot on that other thread, but I can see you have well formed opinions and the intelligence to defend said opinions coherently (even though I don't completely agree )

Unfortunately I don't have the time right now to respond, the hour is rather late and I have to sleep, but when i come back in the afternoon I plan on answering you point by point. What I will do, however, is give you a small preview:

I do think that you are correct in certain areas, especially in your evaluation of American currency. The United States is currently on a fiat system where basically, as you pointed out, the only thing backing up the dollar is the GDP, in other words, other dollars. I think we're in agreement that such a system is unsound at best.

My main point of contention is the assertion that Obama and Bush "Had to" bail out the big banks. The only reason they "had to" was because both parties depended on them for donations. There was nothing about the bailouts that made good economic policy, despite rhetoric to the contrary: it was motivated by pure, naked, power seeking self interest that all politicians, whether liberal, conservative, socialist, white, black or whatever suffer from.

Had those institutions failed, the damage would have been severe but ultimately temporary, as the business cycle would ultimately reassert itself (I personally believe it would have happened by now had the bailouts not taken place, but honesty demands that I admit I don't have much basis for this). You are right about the damage it would have done to the dollar, I'll give you that one but if you believe like I do that the dollar's collapse is an inevitability, well, that argument doesn't do much to persuade me that the bailouts were necessary.

Basically, we're suffering from the same economic collapse that we felt in the mid-seventies; our government (mainly in the person of the Federal Reserve) has basically been propping up the edifice one crisis at a time. There's never been any effort to correct the serious, systemic flaws in our economy, rather the focus has been on dealing with "this recession" or "that recession" over the past thirty to thirty-five years. The problem with this approach is that it will fail someday, and when it does the entire economy will implode. Obama's approach to the problem is every bit as short sighted in this matter as the last four or five presidents behind him, and it's not because he's a liberal; ideology aside, officeholders are very sensitive to the transitory moods of the populace, which doesn't really help them become long term, objective thinkers.

So when I see companies get bailed out and words like "too big to fail" tossed around I get very concerned. Because right now, the market is demanding a severe correction and we've been too s**t scared of that correction to do what needs to be done. I predict that the next major meltdown will be even worse then this one, and if it doesn't end up imploding the economy completely, you can bet the next one will. Economic downturns are a fact of life, but the longer the government keeps resisting the market's attempts to correct itself (by wiping out that artificial worth you mention), the worse things are going to get until finally the situation becomes so severe that the only way to fix it is to finally face the music. Hey, that was an alliteration!

I apologize for not abiding by my own rules and quoting you at greater length, but as I said the hour is late and I wouldn't be able to finish writing before I have to retire to bed. However, I hope I've given you some interesting food for thought

Well, I think we have a lot more that we agree on, than disagree on.

You brought up one of the issues I was going to but didn't get around to in my post.
The Federal Reserve System.

There are certain things that HAVE to be gov't and certain things that CAN'T be gov't

The reason that they have to be such, is because they must be independent of each other.
There is only one thing that needs to be controlled by and owned by the gov't exclusively.
Those are natural monopolies. To allow them in private hands requires the "forcing of competition" or the "granting of exclusivity"
Both of which violate free markets.

Money creation is one example of those natural monopolies. (Your Federal Reserve)

The way to repair everything you're talking about, is to take back the Fed, to re-publicize it. De-privatize!

I know, i'm not arguing that that will, or can happen... only that it must, or it will collapse.
All this allowing of the "correction" to happen that you say, and I agree with, only is possible if the Fed is restored.

The other small thing I think you've missed in what i was trying to say....
This is the real world, we have to deal with "reality" we can't live in the land of perfect competition and of the pristine assumptions of first year Economics.
In a true autocracy, what you say is likely doable.
It is NOT doable in a democracy where the people are free to elect officials based on the their "current short term best interests"

I suspect if we were to do what you're saying, allow the correction to happen... NOW! then we would avoid the massive world economic collapse that is about to happen. We would avoid the crumbling of government after government, the riots in the streets the civil wars, the death of billions.... And yes.. the downfall of society as a whole.
But... as I say, this is the real world. The powers that be will try to hold onto power as long as they can. The people who cast their votes will try to hold onto the token goodies and baubles that they have for as long as they can.
I don't like the outlook, but recently I got out of politics and that was part of the reason... what I just talked about is as inevitable as the sun rising tomorrow morning.
Honestly.. only 20 years of martial law would help. And by the end of it, the powers in control would either a) corrupted beyond recognition, b) assassinated, c) thwarted by the rest of the world.
We don't have text- book conditions. And everything we've done in the past century have made the conditions even LESS text-book like. So we can't expect Text-book ideas like Free Market or Socialism to work. They only work in text books where the necessary assumptions can just be made.
What can work though, is what we have. It's just not nice.
We build ourselves up... until we break and crash, if there's anything left at the end, it will once again build itself up with a different identity and persona, and eventually it will crash. And it will too, because even if it tries, it cannot learn from the mistakes of this time. This is really only the FIRST CYCLE of what will emerge out of sentient, technological human presence in the world. Each cycle will be apt to be very different, but no matter the course, it will always end up in the same place, no matter what route it takes, nor how long it takes to get there.

I guess our main topic of contention is that you believe the system is "fixable" and I don't.
I might even say, i'm quite content to let the boom and bust cycle finish itself off, so we can begin the process of starting again. You know, it might have something to do with my anti-social nature, but I do look forward to the ultimate collapse. Though i know it's more than anti-social... We cannot continue to support what we have.. the world cannot support it, so.. it must collapse, why put it off any longer?

Ronald Reagan marked the beginning of the end of America.

Um... yes it is, actually.


We are one of the leading industrial nations. Not the biggest, but we don't have to be the best at everything just to survive.

I highly doubt that your prediction of currency collapse in the US is accurate. We aren't Weimar Germany or Zimbabwe. Our currency has been pretty stable for a very long time, and it would take much more than a budget deficit to destroy our monetary policy.

You are quite correct. For us (the U.S.) to be it need not be number one. We have to be capable enough of supply ourselves with the goods and services necessary to live in a decent manner. There was a time when the U.S. was not the leading producer and that time has come around to us again. It is the turn of some other nation. Let the Chinese try it for a while. That will teach them a lesson.

ruveyn