Basic Facts about Wealth and Poverty

Rob Schaap rws at
Mon Jun 8 02:10:41 PDT 1998

G'day Observers,

Another of my 'I'm no economist but ...' contributions, if I may.

Doug says of US 'fundamentals:

'A balanced budget, 1.4% inflation, 4.3% unemployment, 296,000 new jobs in May, 3% year-to-year real wage increases....

It may not be utopia, but who's doing better?'

The Yen, every other Asian currency, and the Ozzie took a bath today. Last year the Oz was above US 0.80, now a couple of quarters'll get you one. And Oz can boast items 1,2,4 and (nearly) 5 of Doug's list - we can't boast (3) coz we have fewer 'working poor' and consequently a more accurate (if still dodgy) unemployment index. NZ's led the charge to sado-monetaristic self-disembowelment yet its credit rating is up for relegation tomorrow. Samsung is temporarily stopping production as the world wallows in microchips, and Japan is still in the clutches of a year-long recession. And Jordan has to be right, Russia is all but in the throes of barbarism. India is delinking and China's staying out of the mess for as long as it can.

Small economies would wear that first, but once we've been picked clean and left without the capacity to import, cannibalism may begin to stalk Wall Street.

Any sign yet of those sectors likely to lead the plunge? May I suggest info hardware? What other sectors depend decisively on capital equipment exports? If half the top 500 companies are showing drooping bottom lines, is there any hint there of the likely shape of the clean-out to come?

Is there some good leftie strategy/rhetoric available to us out of all this? Or shall we pat ourselves on the back for our prescience and move into the bond markets, anticipate some desperate interest rates hikes, and mebbe nail the moment the Ozzie'll be sufficiently below its 'fundamentals' to warrant buying?

Or is there no crisis? Were Jordan's earlier apparently sanguine diagnoses of Wall Street's future accurate?

And has Jordan changed his mind?

Just wondering, Rob.

More information about the lbo-talk mailing list