>In the latest issue of Left Business Observer, Doug Henwood announces that
>"the worst of the world financial crisis is over." Leaving aside the
>question of whether the underlying economic crisis is over, one is must ask
>what Doug's definition of crisis is. If the world's markets are at record
>levels, including the battered Asian markets, but the level of economic
>activity is at Great Depression levels for most of the world, then does the
>term "crisis" have relevance?
Lou, you're quoting me very selectively here, starting from the first sentence. I don't want to give away the whole article, but a few excerpts will give a fuller taste:
<excerpts> It may be that the worst of the world financial crisis is over....
There's no doubt that the [bailout] job is a big one, and you could poke endlessly at any optimistic projection....
Though Asian stock and currency markets have found some peace, it's likely to be a few years before their real economies recover....
Brazil could always blow....
The Russian situation is very murky....
Anything can happen....
[I]nternational bailouts work by shifting most of the costs to the working and middle classes of the debtor countries....
Even if the crisis phase is over, something does seem to have changed....
...Still more questions than answers. </excerpts>
>I would argue that it does and that, furthermore, Doug should pay a little
>less attention to the financial pages and more to reportage on, for
>example, the devastation wrought by Hurricane Mitch.
I don't know how many times I have to repeat this, but I'll do it once more, in caps even: JUST BECAUSE THE ACUTE PHASE OF A FINANCIAL CRISIS HAS PASSED DOESN'T MEAN THAT EVERYTHING IS HUNKY-DORY. CAPITALISM, EVEN WHEN IT IS WORKING "WELL," IS AN ENORMOUSLY DESTRUCTIVE AND POLARIZING SYSTEM. BUT PRODUCING DEVASTATION ALONGSIDE WEALTH ISN'T A "CRISIS" - IT'S NORMAL OPERATING PROCEDURE.
As I said in the article to which this one was an update (shortly to appear on the LBO website):
"Themes of ecological crisis haunt the financial one. Each of the first eight months of the year broke previous temperature records. When Asia was breaking apart last summer, massive fires were burning in Indonesia, smogging the whole region. Now floods, aided by rampant clear-cutting of forests, are swallowing up huge hunks of China. As of early September, Brazil - a country on the verge of financial crisis - was host to 27,000 drought-fed wildfires. Always quick to turn distress into loans, the World Bank was quick to offer help to Brazil under its new Disaster Management Facility, established in July "with the aim of creating a more comprehensive and rapid response to natural disaster emergencies," including "a program on market incentives for investments in activities to prepare for natural disasters." In its press release, the Bank didn't comment on the contribution of Bank-financed dams, highways, industrial projects, or farming practices to so-called natural disasters....
And the various ecological disasters accompanying the panic should remind us that you can't externalize the natural costs of production forever; at some point - like now - they're going to bite back. It's a lot harder to bail out an ecosystem than a hedge fund...."
The only way I'd change that passage today, two months later, is to add some comments on the human causes of Mitch.
Doug