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Comments (15 of 15)
Jump To Comment: 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1NAMA to me mean we jump from flying-pan into fire - which later get turned into mighty size using stolen gas from Lossport maybe.
Still worried.
There's a difference between strategy and analysis; you conflate the two.
You criticisms of Paul Murphy's article are not valid. This is only part one of a three part article but more importantly this is an article written by Paul on behalf of the Socialist Party. The Socialist Party does not give a detailed explanation in every article that it is the class nature of the capitalist system that is to blame for the crisis and that it needs to be overthrown and replaced by a democratically planned socialist economy and society. That should be taken as read - we are a Marxist party. Read other articles, pamphlets, and books and this argument is explained in abundance. It may not be stated in Paul's article but then that is not the purpose of Paul's article. Also the analysis is not the same or even very similar to that of the Financial Times. The FT supports the government's strategy of an internal devaluation based on driving down wages and believes this will rectify Ireland's economic problems. Paul Murphy's article argues against that idea and therefore says the opposite of the analysis of the FT!
I've just read a piece on the RTE web site which says that the EU has this afternoon confirmed that it is happy with the NAMA plan.
We're safe now.
No need to worry any more.
What a relief.
Paul Murphy's article is a fairly good, intelligent description of the Irish economic crisis.
But its analysis is not much different from what one would read in, say, the Financial Times.
It lacks an analysis of the Irish class system and how this class-based system caused the economic crisis in the first place. So comrade Murphy's diagnosis being inadequate, his prognosis and cure must be suspect.
Unlike you I have no political scripture to which I must refer in order to ensure I am 'on message'
Unlike you I am able to skip over the bullshit and come to the very simple conclusion that the 'prospects for recovery' are virtually nil, provided we are defining 'recovery' as a 'decent standard of living for the average working folk'.
Your use of the term 'conspiracy theory' is merely an attempt to conceal the fact that you have not understood the very simple notion that if the money which you need in order to pay off your debt is the result of the creation of even more debt - which it unequivocally IS - then it is a mathematical certainty that you will be overwhelmed by your debts within a certain quantifiable timeframe.
The people who deliberately setup this system of Debt Monetary creation knew exactly what would happen and where it would lead because they were pretty good at maths and ran the numbers and found that it was a mathematical certainty that one day in the future the events we are seeing unfold now would HAVE to occur.
That is why the set the system up like that in the first place. Whether you choose to believe it or not is immaterial. In fact I would hazard a guess to say that they are delighted that people such as yourself refuse to believe that they intentionally set the system up with that exact end-result in mind - after all it makes their job soooooo much easier.
They also concluded that they would hold all the power when such events unfolded because after they set it up, they then had a monopoly on the creation of Money from thin-air.
You can call it whatever you like - you can even deny that it is NOT a mathematical certainty that the system would end up with almost everyone in debt to the very people who have a monopoly on the creation of money from NOTHING, if you wish - it matters not one bit to these people since the game is now almost complete.
That the author wrote a couple of thousand words on the subject without mentioning this very relevant aspect of the whole Money-from-nothing charade, makes a mockery of any 'expertise' in the field of 'economics' he may clay claim to
Central Banks are there to control the supply of money.
If they decide to increased the overall pool of money then there will be a boom due to easy credit - If they decide to decrease the overall pool of money then there will be a recession due to restrictions in lending (credit).
At present it is plain to see that the Banksters have made a decision to decrease the overall supply of credit - these are deliberate decisions made by people who full well know they effect of their decisions
It's very simple and for some reason everyone has managed to convince themselves that it is an enormously complicated affair, requiring great and learned people, giving themselves the self-important title of 'Economist', to come along and explain it all to us silly little plebs.
It should by now be evident to any relatively intelligent person with a working brain that this current 'fiasco' is not a mere bug in the system but is a built-in FEATURE, in fact it is the desired feature built-in by those that created the Debt-Money system in the first place
You can fool yourself with marxism all you like but if you refuse to admit that it was a mathematical certainty that everyone would be overwhelmed by debts created by the very fact that all money = debt and that, over a long enough timeframe it is not possible permanently free yourself/the State from debt in a system whereby all money used to pay off the original debts is also incurring debt the minute it is set into circulation, that that is all you are doing - fooling yourself.
Given that we know that the debt-'crisis' is built-in, it is no great leap of logic to suppose that the cheap credit boom of the last 20 yrs was also a built-in feature necessary to widen the debt-net so as to include the greatest number of States/people possible before the Banksters deliberately brought the whole thing crashing down
Your need to label it as 'conspiracy theory' doesn't say much with regard to your grasp of the current economic realities.
Firstly, HB did you read the title of the article then? Its purpose is clearly to analyse the prospects of recovery, not to explain the nature of the crash (read some of the many articles here http://www.socialistworld.net/zbin/maps/map.cgi/s?id=91)
On the substantive point – the “Money=Debt” conspiracy theory takes a truth (how money is created by banks, and the centrality of debt to the economy) and inflates it into the full story (together with some conspiracy theory stuff along the way). I will only be brief here and my account may lack some subtlety as a result, but hopefully the general thrust of our analysis will be clear.
A key part of the Socialist Party and CWI’s analysis of the economy does relate to the unprecedentedly indebted nature of the so-called advanced economies (both consumers and states). However, we go the step beyond that and examine why it is the case that you had an explosion of cheap money and financial instruments? The answer isn’t a “money=debt” conspiracy – it goes to the root of capitalism – profit.
In simple terms, profit rates (the return on investment for capitalists essentially) peaked (for a variety of reasons, some contested, some not – read Andrew Glyn and Bob Sutcliffe’s “British Capitalism, Workers and the Profit Squeeze” for one account) in manufacturing slightly before the mid 1970s. A marked shift then occurred towards financial markets, with capitalists looking to make more profits from their investment than they could through investment in the production of useful goods and services. (For statistics etc see Andrew Glyn’s “Capitalism Unleashed”.)
Together with this, a significant assault was launched on workers’ wages and conditions – what is known as “neo-liberalism”.
The net result of both of these factors (a decline in investment in production and a decline in the share of wealth going to workers and their families) resulted in a decline in aggregate demand for goods and services (both things like factory equipment for capitalists and consumer goods for workers). This was partially offset in the ‘80s and ‘90s through a series of coping mechanisms (in reality attacks on working condition) for working class people (a significant increase in hours worked, a significant increase in the number of women working, i.e. two incomes in a family, an expansion of the capitalist world’s markets) which maintained consumer demand at a certain level.
However, this period also saw a massive expansion of debt – from about equivalent to world GDP in 1980 to around 3.5 times world GDP today. The purpose for this massive extension of credit (debt) was twofold – it provided an outlet for all the massive increase in finance capital, i.e. another way other than production to make money, and secondly crucially it provided a means by which a consumer boom could be artificially extended. In particular, the relationship between the consumer boom built on this debt in the US and manufacturing in the US was the key dynamic in the previous period of economic growth.
However, as we repeatedly warned, this was like stretching an elastic band, it could only stretch so far before it would spring back violently, as it began to do with the unwinding of the sub-prime crisis in the US, spreading quickly.
So debt is the immediate cause of this crisis, but the underlying cause relates to the crisis of profitability for capitalism. Debt is simply a coping mechanism that meant that the crisis could be put off temporarily, but also worsened the impact of it when it hit. Clearly the crisis is not finished yet either, and debt will continue to be a major factor in holding back recovery.
The problems in the world economy relate not simply to the massive extension of debt , instead they are related to the organisation of the economy for profit, not for people’s needs. Such a profit based society is inevitably subject to periodic crises, fundamentally because of a tendency of the rate of profit to fall, as well as problems in the market as a result of the periodic problem of overproduction/underconsumption (where there is not enough demand in the system between capitalists and workers to buy back the goods produced – because capitalists choose not to invest if they can’t make sufficient profit and workers are denied the full product of their labour – in very simplified terms, because workers can’t afford to buy back the goods they produce).
See http://www.marxism.org.uk/pack/economics.html for a basic introduction to Marxist economics.
Hughbris - did you read the article? I suspect not from your comment
Yes I DID read the stupid article - and as I predicted to myself, before I read it, it is a stupid article.
It is a stupid article because not once does it mention that the basis of the current Global Economic Model is 'Money=Debt'.
Under such a system it is NEVER possible for a state to correct the inevitable descent into massive unpayable debt. And that debt can only ever keep on growing because the basis of the system is Money=Debt.
This is a fairly simple concept to understand, and that fact that the author of the stupid article never even so much as once thought to mention that fact shows that he has either no understanding of the basis of our economic system and therefore he is a fool and should be ignored, or that he does in fact understand this but for some reason wishes to ignore/conceal that fact when he writes on the subject.
The article did in fact contain some useful info which might be useful to attract the attention of complete beginners on the subject of Global Economics, but the author styles himself as a bit of an expert on the subject.
Hence his complete and utter disregard as to the importance of mentioning the inevitability of the current situation is quite astounding.
As I said earlier: Anyone styling themselves as an 'expert' who, while attempting to explain how this mess occurred, then neglects to mention that the collapse of this system is a mathematical certainty, is a charlatan of the highest order.
During the 90's the FEDERAL RESERVE in the US kept lowering the interest rates - hence creating the conditions necessary for a wide availability of cheap credit. The chairman of the FED spent a quite bit of time lauding the 'new financial instruments' (Financial derivatives - credit Default Swaps) being 'produced' by the Banksters, and encouraging institutional investors to indulge.
He did this while knowing the financial disaster that lay ahead.
The whole idea of the cheap credit boom was to get as many people and states heavily indebted as possible, before the mathematically-certain collapse occurred.
The next step in the procedure is to tighten the thumb-screws and force the terrified and heavily indebted states/people to willingly jettison every social and employment protection they have managed to wrest from the Elite over the last 150 years.
This is all planned - and it's working out to plan so far. All of it had to occur under a 'Money=Debt' system
Under this system there is no other possibility of any other outcome occurring.
The author writes as if this were not an absolute mathematical certainty given the basis of money creation in the current Global System. So he is either no expert or he is a fool or he is a charlatan - or all 3.
I concur with the above two posts. I only scrapped the issue and believe that it's only the beginning to the end. It is so monstrous that no Country in debt will ever be able to pay the interest alone ,never mind the debts themselves.
People could never believe that the Dollar would crash to an all time low as it now has. The media in Ireland are not reporting on what is going on out there so keep posted to what is happening in America.
Given the climate,Food shortages are probably not too far away.
Good article and nice to see the vids of Joe. You'd miss seeing him around.
When Lenihan says the worst if over, based on the prospect of a global upturn, he knows better. It's a diversionary tactic as he and his ecofin buddies train their economic weapons on the masses. Globally they are creating a credit contraction and a deflationary crisis by reduced lending. Rich people still have their jobs while the further down the wage range you go the higher the unemployment. This isn't the beginning of the end, it is just the end of the beginning.
In reality, the "we the people" poster has (accidentally I suspect) grossly UNDERSTATED the whole completely "insane" situation: because the wholesale fraud does not stop at the €110,000 mentioned in that post.
Thanks to "fractional reserve lending", the banks can then go on to "legally" (if you don't mind!!) lend many times €110,000 of make-believe "assets" in question: by as much as 10, 20, 30 times -- and possibly even more -- depending on the location in the world of the particular bank involved.
Instead of talking about "insanity", I think we should all be talking about criminal fraud of an extremely serious nature, and about what can be done to remedy it as soon as possible.
There most definitely is a lot of insanity involved, but that relates entirely (in my view) to all the people who keep on, and on, accepting all the fraud of the perfectly sane and extremely sly and ruthless bankers who are the ringleaders of what many now believe is by far the greatest "Ponzi" scam in human history.
Then, and to make matters almost infinitely worse, the ringleaders of this scam, thanks to their present vast wealth and influence, which they have fraudulently accumulated during the past 300 years or so, appear to have ALL of our political leaders operating under their "remote control" systems: 100%.
Hughbris - did you read the article? I suspect not from your comment - reading it is to be recommended, and then we can have a discussion about it!
'Money' is created by People's signatures. So called 'Credit' and Debt is created by the same signature. The Bank gets the 'credit' and the signatory gets the 'Debt' along with all the interest attached to it.
Simply put. A Bank does not have Millions of 'Money' Notes in it's vault to dish out to People to purchase ANYTHING.
If some one lodges say €10,000 as a deposit for a loan of say €100,000, the Bank has immediately received 'Assets ' of €10,000 that it never had. When the borrower SIGNS for the loan of say €100,000, the Bank has then received 'Assets' of €110,000 it never had.
It further receives 'Assets' to whatever the 'value' (?? ) the interest may accrue to over the period of the time the signatory agreed to pay.
SIMPLY, BANKS CREATE 'MONEY' OUT OF THIN AIR...and the People scream for more Mortgages?
Talk about insanity.
this 'recession' hasn't even barely started yet - the amount of debt been hidden off the books is astronomical - ignore the economic 'experts' they exist merely to lull you into a false sense of security.
This is going to get a lot worse - and it isn't going to get better until we free ourselves from a Money=debt system of financing. all money in circulation is debt-money and it can only be payed off by creating even more debt-money - therefore it is a mathematical certainty that the debt can never be payed off and that the system will collapse under it's own weight.
anyone telling you otherwise is a liar and you would be a fool to believe anything they say related to economics.
Anyone that thinks we can buy our way out of recession this time is deluded and has absolutely no understanding of some fairly simple mathematical calculations
It will take an entirely new establishment to sort this country out.