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From the NYT today, predictable news:

In Athens, the Greek government had no choice but to seek an I.M.F. solution after its costs of borrowing skyrocketed, but that has not made the negotiations for aid any easier.

[…]

According to people who have been briefed on the talks, the aim is to secure from Greece a letter of intent for even deeper budget cuts than the tough measures imposed so far, like reductions in civil service pay, in exchange for emergency funds.

Steps being discussed include closing down parts of the little-used Greek railway system, which employs 7,000 people and is estimated to lose a few million euros a day; limiting unions’ ability to impose collective bargaining agreements, which lead to ever-higher public sector pay; cutting out the two months of pay that private-sector workers get on top of their annual pay packages; increasing the retirement age and cutting back on pensions; and opening up the country’s trucking market in an effort to lower extremely high transportation rates that have hindered the country’s competitiveness.

With Greece now shut out of the debt markets, it has little leverage to resist — especially in light of the 8 billion euros it needs to repay bondholders on May 19. Analysts expect a deal by next week at the latest.

I’ve always been a fan of the euro – not that I’ve given it the amount of thought that I’ve given, say, the style indirect libre and such matters. But it does occur to me today that one thing the common currency seems directly to prevent is the present or eventual adoption of the Kirchner method of handling such crises:

On 15 December 2005, following Brazil’s initiative, Kirchner announced the cancellation of Argentina’s debt to the IMF in full and offered a single payment, in a historical decision that generated controversy at the time (see Argentine debt restructuring). Some commentators, such as Mark Weisbrot of the Center for Economic and Policy Research, suggest that the Argentine experiment has thus far proven successful.Others, such as Michael Mussa, formerly on the staff of the International Monetary Fund and now with the Peterson Institute, question the longer-term sustainability of Pres. Kirchner’s approach.

In a meeting with executives of multinational corporations at Wall Street—after which he was the first Argentine president to ring the opening bell at the New York Stock Exchange—Kirchner defended his “heterodox economic policy, within the canon of classic economics” and criticized the IMF for its lack of collaboration with the Argentine recovery.

The Kirchner method, rather than starving labor and the state in service of debt repayment, imposes “austerity measures” on the international banks that made the loans (confident that they’ll be back when the situation improves – and they will) and allows leeway in the domestic effects of a financial crisis (i.e. Argentinians weren’t buying Japanese televisions for quite a bit of the decade…) But due to the eurozone arrangement, this way out, whatever the ideological predilections of those in power, is probably off the table now and for a time to come… As it turns out, the eurozone right now looks like an engine for stealing trains from the Greeks to keep Orlando vacations affordable for the Germans…

And of course, amidst all this, the NYT runs its inevitable ordinary Greeks admit that they are a nation of thieves, and therefore deserve the pain that awaits them piece….

“We did this to ourselves,” said Mr. Koptides, 37. “It is our problem. It’s not Germany or Europe’s fault. We did this to ourselves.”

Greeks seem to be engaged in national soul-searching these days, wondering whether traits they once found amusing might have led to many of their difficulties now.

Some say their country may have been unprepared to join the European Union in the first place. Some focus on how European Union funds sent to Greece were spent on wasteful projects. Greece’s last administration hid the extent of its debt.

“There has always been this way of thinking in Greece that the thieves are the clever ones and the ones who don’t steal are the patsies,” said Petros Anagnostou, 46, a book dealer. “We have to develop a conscience as a community, to see ourselves as a collective society. If it is a jungle out there, then we will eat each other and end up in a place like we are today.”

But of course the right path toward the reestablishment of “a community… a collective society” is by the elimination of the right to collective bargaining and the phasing out of public mass transit!

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April 29, 2010 at 9:22 am

Posted in austerity, crisis, economics

the psychosomaticity of crisis

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From an FT article yesterday about the probability that European states are about to sell-off what’s left of their publically-owned companies in order to plug budget gaps:

“The original catalyst for privatisations in the 1980s and 1990s was ideological, but the current motivation will be far more financially-driven,” says Craig Coben, head of equity capital markets in Europe for Bank of America Merrill Lynch. “Governments don’t quite have the crown jewels they had before but they are going to be looking to take advantage of market opportunities.”

Of course, both episodes are ideologically-driven, and of course there was a “financial” issue at play the first time around too, but then again we know what Coben means. The first round of privatizations happened because it was the right thing to do, this time because, ostensibly, there’s nothing else to do, which may have as much to do with the volume and viability of other possible answers in the two cases, but again, we know what he means.

But there’s something counter-intuitive about the progression, isn’t there? A drive that starts in ideological realm, the realm of argument and fantasy, that procedes to materialize itself, to come true. That is to say, there’s something psychosomatic, something of the imagined-become-real symptom about the long progression of this crisis. You worry so much about having a heart attack, you get so anxious about assembling your collection of cures both conventional and holistic, chemical and folk-borne, that there you are, dead in the parking lot of your Recently Privatized Medical Facility.

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March 14, 2010 at 9:42 am

cheap: the aeroflotification of capitalism

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Frederick Studemann argued recently in the FT that Aeroflot in the 1970s was a forerunner of the low-cost, low-service airlines of today.

Not only was it far more extensive and cheaper than in the west, it was less elitist. While back home air travel was for the few, in the USSR it was for the many – just another mode of public transport. Aeroflot, the national carrier, was both the world’s biggest airline and one of the cheapest, so catching the red-eye to Vladivostok was as easy as hopping on the Number 2 trolley bus on Kutuzovsky Prospekt.

Frankly, it was difficult to know where to start. Maybe with the pervasive, sweet, plasticy smell of the planes or the routine delays and constant lack of information. Or how about the flint-faced stewardesses stomping down the aisle offering the “choice” of tangy water or tangy water? Or perhaps the unspeakable food, the shabby fittings and the bleak, run-down airports in the middle of nowhere. Then who can forget the grumpy staff for whom dialogue was an alien concept, preferring instead to find new ways of deploying arbitrary rules and associated punishments. All in all, not unlike a rush-hour ride on the Number 2 trolley bus.

Any of this sound familiar? We may have scoffed at the notion of Aeroflot leading the world.

But how wrong we were. Thirty years on it is clear that far from being a laughable expression of a clapped-out system destined to crash under the weight of its internal contradictions, Aeroflot was in fact the pioneer. Low-cost travel today is simply playing catch-up with those Heroes of the Soviet Union: passengers packed in like sardines, robbed of respect and subjected to a baffling array of terms, conditions and penalties. Passengers do not interact with people but with an impersonal, unforgiving apparat dedicated to the ruthless pursuit of a (centrally fixed) plan.

It’s an interesting effect, this one, when some product sector or another in capitalist economies drops low enough in price that it starts to take on the sheen of a popular good. (Can’t find the story, but some UK government official or another recently defended the “right” of “ordinary people” to low-cost flights… Can anyone remember this and point me in the right direction so that I can update the post?) Google’s empire, to cite the most obvious example, depends entirely upon this populist semblance of public provision – everyone has the “right” to a free email address, a free blog, free news stories, free internet search, free telephony, etc… Chris Anderson’s just written a book about this, that according to the publisher’s description

considers a brave new world where the old economic certainties are being undermined by a growing flood of free goods – newspapers, DVDs, T shirts, phones, even holiday flights. He explains why this has become possible – why new technologies, particularly the Internet, have caused production and distribution costs in many sectors to plummet to an extent unthinkable even a decade ago. He shows how the flexibility provided by the online world allows producers to trade ever more creatively, offering items for free to make real or perceived gains elsewhere.

Corporations like Ryanair and Google are figures that populate one of the stories that capitalism loves to tell itself and those doomed to live in its grasp – that given enough time and given the allowance for the markets to operate without regulatory hindrance, the general level of affluence will rise as the cost of living drops. But of course, especially when it comes to the airlines, most of the cheap or freeness is a smoke and mirrors false advertisting effect. The Times (UK) ran an article revealing what anyone who’s ever tried to check a bag on a Ryanair flight already knew – that BA actually costs less on many, many flights than its cut price competitors. But let’s even pretend that you actually can access a low-cost flight. I’m sure many many people actually have flown to Spain or Greece from the UK for what I pay for a pack of cigarettes everyday, even if not nearly as many as the advertisements would have you believe.

The answer, and the overall answer to the free and the cheap that is one of the primary calling cards of capitalism remaining, of course involves a heady mix of financialisation, micro-payments, consumer distraction, non-populist austerity, and government subsidy. And the game ends with the demise of the less cynically-minded corporations and then prices rising right back to the place where they were before the game began.

Would love to say more about this, but can’t yet. Given world enough and time, I’d sit in the British Library – or at least the Pret à Manger across Euston Road from the it – and work on a new version of Kapital, centred on the mystical question of what it costs us to view the tiny advertisement at the top of our Gmail inboxes. Actually, seriously… There’s the magnum opus right there – political economy, temporality, “free,” text, interactivity, attention in distraction, ecology – everything all at once… Perhaps once I’m done with the tedious thing I’m working on now… Like Marx, I a) live in North London b) like do my drinking on or near Tottenham Court Road and c) tend to spend Saturdays with my family on Hampstead Heath, so I think I’m a perfect fit for the job.

It’s funny how you hear a lot less about the Walmart Effect lately, though, isn’t it?

Written by adswithoutproducts

August 17, 2009 at 11:00 pm

krugman’s pwning and ours

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A quick update to this post from last week. Just to rehash. Paul Krugman wrote that it was “tremendously good news” that a lobbying group representing the US health insurance industry had sketched “out a plan to control health costs.” I wondered in my post, basically, “WTF planet is Krugman on?” And today he writes:

That didn’t take long. Less than two weeks have passed since much of the medical-industrial complex made a big show of working with President Obama on health care reform — and the double-crossing is already well under way. Indeed, it’s now clear that even as they met with the president, pretending to be cooperative, insurers were gearing up to play the same destructive role they did the last time health reform was on the agenda.

No shit! You really do wonder about these Nobel Laureate economists sometimes, don’t you? How many pages into PK’s textbooks do you have to read before it becomes clear that there is very little incentive for for-profit corporations to stop rapaciously chasing profit and instead self-morph into a humane quasi-socialized health care system that, you know, puts the patient first, shareholders way in the back?

Betcha we’re about to get pwnd, one way or another, in the short run or the long run, as far as the socialization of medical care in the USA is concerned. The reason why is readily available for all to see in columns like these.

(Special to my wife: write your NHS birthin’ column, dammit!)

Written by adswithoutproducts

May 22, 2009 at 12:08 pm

Posted in economics, socialism

hoaxum

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Perhaps one of the most comforting ways to think of the current crisis, if you’re an academic in the humanities with some or lots of investment what we call “theory,” is that it is a giant, real world Sokal hoax, except one written collectively but especially by the Sokaled themselves, and that has exposed the so-called “discipline of economics” as a self-spinning, jargon-laden fraud.

Their journals should be defunded, their tenureships revoked, and I hope that their TIAA-CREF accounts have been well and truly emptied, those guys.

Red asses not yet red enough, here, at the NYT.

Written by adswithoutproducts

March 5, 2009 at 1:06 pm

Posted in crisis, economics

david harvey all up in delong’s comment boxes

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Interesting! Brad DeLong slams David Harvey (at one point as a provisioner of “pointless intellectual masturbation”) and Harvey shows up in the comment box to defend himself. The final paragraph of Harvey’s response:

These are dangerous times and I would have thought the definition of fair and unbiased to which DeLong subscribes might go somewhat further than that given by Bill O’Reilly. What is needed is generous critique, the taking of whatever is positive in competing accounts and a real struggle to come to terms with ways we might better proceed. It will be hard enough to save capitalism from the capitalists but the real tragedy here is that the real message from DeLong’s commentary is that we need also to save capitalism from the economists.

(Ha! Found it after I googled for “William James chronic masturbation” because I was trying to say something funny in the last post about this sort of thing… Much better that I didn’t, I think….)

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February 18, 2009 at 12:22 am

Posted in crisis, economics

economists and bad fiction

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Why are economists into such bad fiction? Why do they so enthusiastically announce that they are? Is Stross to the soft neoliberals what Rand was to Greenspan and the like?

Do you know what’s funny to reconsider in exactly this light? Marx’s thing for Dickens. Shhhh. No I love Dickens. But you know, there’s a way to my jadedly modernist eyes that maybe, if you pull the covers around on the bed just the right way, there’s a commonality there.

In order for this to be about something other than being mean and elitistly snarky about bookjackets, I have to say something about the fiction itself, don’t I? What I would say would have something to do with the basic anticipation / fulfillment / frustration model of narrative form that I somewhat idiosyncratically have been carrying around ever since I was a wee litscholar.

Anyway, more, perhaps, to come, when less worked right to the brink of adieu.

Written by adswithoutproducts

January 24, 2009 at 4:45 am

Posted in economics, fiction