Multinational Investors' Vote of Confidence in Ultra-imperialism posted by Yoshie

Check out multinational investors' major vote of confidence in ultra-imperialism today: John Willman, "Markets Cheer Bank Bail-outs" (Financial Times, 13 October 2008); Ralph Atkins, "European Banks Offer Unlimited Dollar Funding" (Financial Times, 13 October 2008); "Full Text: US Treasury Tarp Plans" (Financial Times, 13 October 2008); Louise Story and Andrew Ross Sorkin, "Morgan Agrees to Revise Terms of Mitsubishi Deal" (New York Times, 13 October 2008); "Gulf Shares Surge as UAE and Qatar Act (Financial Times, 12 October 2008); and Robin Wigglesworth and Simeon Kerr, "UAE Leads Drive to Stem Crisis" (Financial Times, 13 October 2008).

It's true that, if China, Japan, Germany, Saudi Arabia, and the United States functioned as one politically (if not legally) coherent establishment, Americans would be back in the black:

Global Balance of Payments ($bn, 2007)

SOURCE: Martin Wolf, "Asia's Revenge," Financial Times, 9 October 2008, p. 9.

That's the level at which the ruling classes have built their post-WW2 hegemony (cf. Kees van der Pijl, The Making of an Atlantic Ruling Class; Gavan McCormack, Client State: Japan in the American Embrace; etc.).

Therefore, a radical shift in global class relations could come only if there were a radical shift in any one of the aforementioned countries, but these are the very ones where the Left has the least chance in the world.

Is China, though, a weak or strong link in this chain of empire (to which Latin socialists, Islamists from the Hindu Kush to the Persian Gulf to the Horn of Africa to the Niger Delta, Maoists in Nepal and India, the national security interests of Russia, etc. have provided a partial material -- if ideologically incoherent -- counterweight)?

Update

"[T]he needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it" ("Text: Henry Paulson Remarks Tuesday," 15 October 2008).

"Investors are recognizing that the financial crisis is not the fundamental problem. It has merely amplified economic ailments that are now intensifying: vanishing paychecks, falling home prices and diminished spending. And there is no relief in sight" (Peter S. Goodman, "Markets Suffer as Investors Weigh Relentless Trouble," New York Times, 16 October 2008).

Labels: british capitalism, capitalism, china, class, debt, germany, imperialism, japan, Saudi Arabia

Plans, great and small. posted by Richard Seymour

You will be forgiven for yawning at the government's 'shock and awe' policy announcements. An interest free loan for 30% of a home's value for up to five years? Golly. Suspended stamp duty for properties under £175,000 (is there such a thing in London?) for one year? Turn off the charm, already. My thighs are quivering. On the other hand, get back to me when you have a beautiful bunch of emergency council house building programmes for me. These are supposedly Gordon Brown's big guns, the first of a series of stunning policy initiatives that will reverse ten years of decay, unpopularity over the war and the economy, and a series of unworldly blunders over the last year. Altogether too little, way too late. With average household debt at £23,000 and 1.6m people queuing for social housing, the government is tinkering at the margins of a problem built up over approximately twenty years, in order to provide scant protection against a crisis that it assured us for months would be light and brief in its impact.

I am willing to bet that among Brown's upcoming feats there will be no job creation package, no relenting on public sector pay, no serious expansion in public expenditure to sustain growth, no substantial relief for those kicked out of work, no reversal on planned cuts to benefits, no improvement in what the ECJ has described as our "inadequate" pension protection systems (because a whole a bunch of pension schemes are having to be rescued at the moment), no substantial debt relief for millions of people who have been driven to borrow just in order to keep spending enough even during the period of growth, and are now faced with the prospect of unemployment and big arrears hanging round their necks - nothing, in short, that will seriously alleviate the burdens being placed on ordinary people by the economic crisis. What could compel the government to act differently. Last night on Channel 4 News, Derek Simpson, head of the Unite trade union, was urging the government to adopt a whole range of measures to combat poverty pay, improve workers' rights, raise public sector living standards and so on. All perfectly modest and reasonable demands. Then at the end of the segment, the reporter stated that because Simpson had been given a "fair hearing" by the Prime Minister at a meeting some weeks ago, the unions are still shoring up Downing Street. Say what? Gordon nodded for an hour or so and then shuffled him out the back door, and he takes that as some form of encouragement? We need the unions to act, and act far more decisively than they have done to date. In fact, this is part of Brown's strategy for keeping the unions on-side, especially as the party risks going bankrupt without union donations. Last year, Brown wrote to Brendan Barber, head of the TUC, to promise regular meetings of the kind that Simpson attended. And since, as Mark Serwotka has pointed out, some union leaders are more interested in defending 'their' government than in defending the interests of their members, the invite has been welcomed and the money duly stumped up without any change in policy. So much for the bragging that "We own Labour". No, I'm afraid the relationship is quite the reverse.

Meanwhile, the latest Tory plan to help people through these difficult times is to raise the inheritance tax threshold to £2 million. Apparently, raising it to £1m (which the Telegraph preposterously claims would save "nine million families" from the tax), was not enough. This, in addition to planned cuts in business taxes, is 'compassionate conservatism' for you. After all, they can't see their rich friends and their offspring lose money in a recession. How the hell else do you think they're going to afford all those ivory back-scratchers with profits tumbling like they are? Still others have different plans, older plans. For, although the Home Office is apparently worried that the recession will increase the appeal of Islamist parties among those who experience racism and economic deprivation, I personally am more concerned about terrorist training camps.

Labels: debt, economy, gordon brown, housing, new labour, recession, tuc