A crisis

Filed under: culture, philosophy, event — sdv @ 05:13:07 pm

the “historical analogy", that may be faded but still it is an epic ideological battle that continues. The enemies of Keynesian economics are fighting-back. Hardly pausing, despite the failure of the rampant free markets, the old neo-liberals are back. Are the Keynesian economists and their political fellow travelers ready to make the necessary case ? Can it not only do the right thing, but capture the public imagination and own the spirit of these perilous times? The ideological struggle which will establish what good government means is what holds the key to winning the Keynes or Hayek argument ? But none have changed their position or learned any lessons. Alan Greenspan said: “I found a flaw. I don’t know how significant or permanent it is.” Henry Paulson only admits: “I could have seen the sub-prime crisis coming earlier,” but adds, “I’m not saying I would have done anything differently.” Mervyn King can’t admit his mistake in keeping interest rates so high for the past year as this crisis brewed.

This began from reading a note from 16 neo-liberal economists in the press over the weekend which attacks the current plan to borrow and spend to ease the recession. “Occasional slowdowns are natural and necessary features of a market economy,” they said. Laissez-faire is the best policy, but if something must be done “which is highly disputable” then “taxes should be cut". This is the familiar policy solution of the market. It is almost insulting to Hayek to identify these people as Hayekians but neo-liberals they certainly are - This was the ideology of those who devised the catastrophic Thatcherite budget of 1981 which is what they want to repeat. It was designed to cut government spending (state, federal and local in American terms) and sent unemployment over 3 million. They turned what was a recession into a social catastrophe and now they are advocating the same solution again. We don’t yet know how much the current European governments intend to borrow and spend. We should have a reasonable idea within the next month. In the UK certain commitments have been made already to bring forward the infrastructural spending for Crossrail and other similar projects. How much is needed to adopt the Green New Deal and build renewable energy ? What would it take to build all the social housing (state owned housing) that has been forgotten about in the past few decades? How much to ensure a good apprenticeship and real work to see all young people through the bad years? That too is a real investment, especially considering the
identifiable cost of its absence since the 1980s. Perhaps we are still waiting to see if imagination will win the day over monetarist caution. These are the actual sites of struggle.

The neo-liberal commentators are sharpening their knives against the European governments “Keynesian adventures". The argument has not yet been won: the left of centre parties have to make the ideological case more eloquently, as the public have not yet recovered from their skepticism of government’s ability to spend money well. Conservatives may be wavering, uncertain which way the public will jump, but the liberal-left would be mistaken to think that the pro-Keynesian turn was aguaranteed. I’m hoping that the talk of tectonic plates shifting and paradigm shifts is accurate but people have been good at seeing new dawns in public consciousness.

In Europe as the left accepts the necessity of a more Keynesian turn it is becoming a question of which way the right will jump - towards Hayek or Keynes? In the USA…

Virillo on the crisis

Filed under: culture, event, difference — sdv @ 04:14:24 pm

Here you’ll find Virillo on the crisis


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sigh.....what next
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