Sun 2010-02-28 13:32 EST

GEAB N°42 is available! Second half of 2010: Sudden intensification of the global systemic crisis -- Strengthening of five fundamental negative trends

Marie-Helene Caillol

LEAP/E2020 is of the view that the effect of States' spending trillions to <<; counteract the crisis >> will have fizzled out. These vast sums had the effect of slowing down the development of the systemic global crisis for several months but, as anticipated in previous GEAB reports, this strategy will only have ultimately served to clearly drag States into the crisis caused by the financial institutions. Therefore our team anticipates, in this 42nd issue of the GEAB, a sudden intensification of the crisis in the second half of 2010, caused by a double effect of a catching up of events which were temporarily <<; frozen >> in the second half of 2009 and the impossibility of maintaining the palliative remedies of past years...The sudden intensification of the global systemic crisis will be characterised by the acceleration and/or strengthening of five fundamental negative trends: . the explosion of the bubble in public deficits and a corresponding increase in state defaults . the fatal impact of the Western banking system with mounting debt defaults and the wall of debt coming to maturity . the inescapable rise in interest rates . the increase in issues causing international tension . a growing social insecurity.

2010; available; fundamental negative trends; GEAB N°42; Global systemic crisis; strengthen; Sudden intensification.

Thu 2009-09-17 09:31 EDT

Why capitalism fails - The Boston Globe

Stephen Mihm

Mainstream economics rediscovers Hyman Minsky; ``Instability,'' he wrote, ``is an inherent and inescapable flaw of capitalism.''...Minsky drew his own, far darker, lessons from Keynes's landmark writings, which dealt not only with the problem of unemployment, but with money and banking...Minsky argued that Keynes's collective work amounted to a powerful argument that capitalism was by its very nature unstable and prone to collapse. Far from trending toward some magical state of equilibrium, capitalism would inevitably do the opposite. It would lurch over a cliff...Minsky spent the last years of his life, in the early 1990s, warning of the dangers of securitization and other forms of financial innovation, but few economists listened. Nor did they pay attention to consumers' and companies' growing dependence on debt, and the growing use of leverage within the financial system... Minsky...argued for a ``bubble-up'' approach, sending money to the poor and unskilled first. The government - or what he liked to call ``Big Government'' - should become the ``employer of last resort,'' he said, offering a job to anyone who wanted one at a set minimum wage. It would be paid to workers who would supply child care, clean streets, and provide services that would give taxpayers a visible return on their dollars. In being available to everyone, it would be even more ambitious than the New Deal, sharply reducing the welfare rolls by guaranteeing a job for anyone who was able to work. Such a program would not only help the poor and unskilled, he believed, but would put a floor beneath everyone else's wages too, preventing salaries of more skilled workers from falling too precipitously, and sending benefits up the socioeconomic ladder.

Boston Globe; Capitalism Failed.

Calculated Risk Mon 2009-09-14 12:05 EDT

A Moment with Minsky

CalculatedRisk

Stephen Mihm at the Boston Globe looks at Hyman Minsky...``Instability,'' Minsky wrote, ``is an inherent and inescapable flaw of capitalism.''

Calculated Risk; Minsky; Moment.

Fri 2009-07-24 00:00 EDT

naked capitalism: Guest Post: "Why I'm Freaking Out"

Gonzala Lira; ``Sixteen months into this Millennial Depression, and less than a business quarter into Obama's administration, it is inescapably clear that Team Obama hasn't the slightest idea what it's doing.''

Freaking; Guest Post; naked capitalism.