Fed cuts rates; crisis over?

James Heartfield James at heartfield.demon.co.uk
Sat Oct 17 12:38:50 PDT 1998

In message <l0313030eb24e8a64570f@[]>, Doug Henwood <dhenwood at panix.com> writes

>One of the reasons I'm so cautious today is that I was burned by being too
>apocalyptic after the 1987 stock market crash. I also used to think that
>the Latin debt crisis was going to bring down the world financial system
>and/or lead to the debtors' political secession from the development
>regime. None of that happened and I rethought my positions.

> I also think that a lot of left writing is
>achingly bad because it's so apocalyptic, moralizing, and exhortatory.

Thank god for a bit of common sense. Why is that the left just falls so readily for every stereotypical response that is expected of it?

You might think that the fact that the entire capitalist class is making such a big play of talking up the financial crisis might make us just a bit suspicious that we are being sold a pup by messrs Soros, Clinton and Blair.

I think it's a sign of political impotence that all of us anti- capitalists want to believe that capitalism is going to collapse without any effort to overthrow it. The wish becomes the father to the thought, but lets face it, this is more schadenfreude (is that the word?) than analyis.

There's a big difference between the exaggerated reactions of the financial market and the real state of the productive economy. That has been sluggish (almost somnambulent in the UK), but it is not in meltdown. In the US there has been modest growth in recent times. Japan clearly is in trouble (for tangential reasons to do with its easy credit policies in the eighties), but even that is not insurmountable.

The substantial problems in the emerging markets in East Asia are a problem for them, but not necessarily for the world economy. That depends on their relative weight in the world market (not great). Don't beleive the globalisation hype, just because an Indonesian butterfly gets in a flap, it doesn't mean that there will be a tornado in the US or Europe.

I note that, despite gloomy talk of selfish Japs taking their factories home with them, the number of people in work in the UK has just been reported as increasing. And though Merril Lynch have just laid off several hundred people just over the road from Living Marxism magazine's offices wher I work, the London Stock Exchange (cravenly subservient to the US) is celebrating the cut in lending rates with a big rally. -- James Heartfield

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