> The profit upturn over the last 15 years has been pretty impressive, and
> it's strong evidence that Anwar Shaikh is right about the U.S. being in an
> up K-wave. Of course, it'd be easier to believe that if the rest of the
> world were in better shape. And if U.S. capital weren't in such a euphoric
> mood; earlier upwaves began with much more sober financial valuations.
> Though maybe the euro will force the needed wage and benefit cuts on the EU
> and restore profitability there - a dismal 11% average in 1982 up to only
> 15% today, half American rates, a comparison made with the recommended care.
If the euro does indeed force wage and benefit cuts in the EU, we're headed for a global Depression, because Europe is, given America's deeply indebted consumers and Japan's savings-obsessed citizenry, pretty much the only source of consistent final demand in the world economy today. But you could also raise profit rates by massive deficit spending, i.e. multinational Keynesianism. Of course, this would mean scrapping Maastricht's 60% limit on public debt as a percentage of GDP, or else soaking the Eurorich big time, neither of which seems likely at this point. But then, May 1968 and December 1995 were also deemed unlikely by our esteemed corporate press.
It's going to be quite a battle in the Eurostate: tough, entrenched unions and pissed-off, underemployed electorates facing off against vicious monetarist elites. The German elections this fall should tell us which pit the pendulum is swinging towards.
-- Dennis