Communism strikes Jeremy Grantham...

ftalphaville.ft.com/blog/2011/08 … manifesto/

Two different people. James Grant of Grant’s Interest Rare Observer is a 25 year stockmarket bear who’s a goldbug, antiFed of the Austerian persuasion. Very verbose but worth listening to.
Jeremy Grantham is a transplanted Brit (to the US) veteran money manager who has been very cautious (and generally right) on the market. His quarterly update of which this is the latest is a must read.

Ooops! Corrected!

It’s interesting that this analysis has been developed by Midnight Notes, among others, years before the capitalist intellectual millieu could bring themselves to admit that the last 30 years has been an economic death march.

Heres a pdf of one of their essays about the declining wage and credit.

midnightnotes.org/Promissory%20Notes.pdf

To be fair, Irving Fisher in the 1930s and JK Galbraith both identified the same process at work in the Great Depression. Why this Second Great Depression should be any different is beyond me.

And before them Karl Marx.

I dont think this makes him a communist.

Wealth redistribution has been a hot potato in the US since the rep T Roosevelt hammered home the argument for an estate tax (ironic since he lived off an inheritance) from 1906 as a means of preventing an idle rich in the US which was perceived as contrary to the US vision.

Of course, now the reps have retitled it the “death tax” so if you like stuff like this you are a screaming wierdo commie bastard.
So the last ten years has seen a dramatic reduction in this tax, largely targetting the upper middle classes.

[code]Year Exclusion Max/Top
Amount tax rate

2001 $675,000 55%
2002 $1 million 50%
2003 $1 million 49%
2004 $1.5 million 48%
2005 $1.5 million 47%
2006 $2 million 46%
2007 $2 million 45%
2008 $2 million 45%
2009 $3.5 million 45%
2011 $5 million 35%[/code]

As regards debt forgiveness, it was recognised by the Paulson team that some level of forgivness was seen as the optimal solution to dealing with the mortgage mess but politically unacceptable. It’s an entirely logical argument that indebted consumers cant consume (ref Lizzie Warrens “coming collapse of the middle class”).

But in considering forgivness he is ignoring the other options available. I think there will soon be a tipping point here whan it really hits home that the promised recovery aint coming that a year or two in the UK getting out of the debt as opposed to waiting for forgivness will not attract any kind of stigma.

Spending 25 years working your way out of negative equity at the cost of other life issues like planning for retirement, and, ahem, living is really not very attractive.

I can already imagine the likes of Isobel and Brendan triumphing the smart and canny bankrupts. Savvy even.

And for once I’d agree with them.

@grumpy
Exactly! Communism! :smiley:

edit: Deductions are in red, you know…

And another one!
alternet.org/newsandviews/ar … ing_itself

So capitalism caused our crash so? How exactly?

Oh come now, back to politics.ie with you.

Answer the questions if you can.

Eh, no. Why don’t you ask Mr. Roubini.

If you took time to listen to this and actually read the earlier article you’d appreciate what they are saying. If you make your customers poorer, they cant consume. Hardly fucking rocket science is it?

It isnt which is why I pointed out that earlier in the thread that Marx said much the same thing 150 years ago.

The inherent contradiciton of capitalism is that in maximising profit and minimising cost capitalists are sowing the seeds of destuction for the entire model . One of the biggest costs is labour. As such, there will always be a dynamic within capitalism to erode the wages and conditions of workers. But the problem, obviously, is that those same workers are the ones expected to provide a customer base.

Id say there might be a few Marxist scholars knocking around these parts who might correct me on this but I believe the Marxist critique is simply that overtime this “contradiction of capuitalism” would eventually lead to enough of the proletariat being alienated from the system through unemployment or rank inequality that they would rise and overthrow it and a socialist utopia would follow.

The Marxists believe that ideologies (except Marxism of course) are simply adapted to justify the economic and social order of a given period. For example, once the material conditions of production rendered feudalism unsustainable, modern capitalism burst onto the scene. In the wake of this “real” transformation, the intangible moral, legal, and political superstructures had to change in order to maintain the rule of the capitalists, the new oppressors of the proletariat.

None of what Marx wrote has proven true, by investing in capital, workers have become more productive and freed up to to expand the division of labour and improve the general standard of living over generations. Marx never wrote how socialism was possible, he never understood the inherent “contradiction of socialism” that economic calculation is not actually possible due to it’s lack of individual property rights and this is why all attempts at imposing “real socialism” fail and must be abandoned or people starve.

I agree with your second point about property rights and the clash between socialism and individual rights and freedom.

In relation to your first point, yes in the west, for a long period of time living standards rose to never seen before heights. But in the United States, for example, for some time now we have seen the rising tide life some boats much more than others as evidenced by the fact that 46 million people are on food stamps and the average industrial wage has barely budged upwards in 30 years.

I would put it that real income growth in a lot of sectors ceased in the 1960s and that all restraints on the current monetary system were officially removed during the Nixon administration and that our current crisis origins begin there. Monetary inflation is quite destructive, it means those nearest the source of the money (the central authority), gain the benefit by being able to get the cheap loans first and pay the non-inflated price of the good in the market, while those furthest from the source of money must pay the higher price, hence they get poorer. In a free market monetary system the businesses must continually serve the customer or they go bust and get liquidated, in our current system they are regarded as “too big to fail” and bailed out (e.g. NAMA the developers dole), we get poorer.

Is this not a very western-centric view? For example, are non-western parts of the globe not benefitting in tandem with (and as a result of) the west’s decline?

And, in a world dominated by the interests of Corporations over and above those of human beings, is that not how it should be? ie force different economies to ‘compete’ on cost to allow mobile corporations traverse the globe and thereby benefit from the varying differentials in the cost bases of different regions?

And while the west is still the prime consumer of goods and services, presumably the idea is that in time the children of Amazonian tribesmen can someday do what the children of Irish peasant farmers did ie get down with the programme.

Alternatively (or maybe additionally), has anyone considered the possibility that a world of debt-burdened worker drones may be exactly what those in power aspire to rather than being something they may be trying to avoid?

How do you listen to an article?

What about electronic goods, like mobile phones and laptops which have decreased in price over the last few years? Hardly making employees and consumers poorer because of falling prices now.