However, without artificially counterposing it to academia, the point is well taken. There can be a tendency towards discursive insularity on LBO that leave some on the outside, especially if they are unfamiliar or if their English is not quite up to snuff.
So here's my (amateur) try at an answer:
> >Whats peoples thoughts for the prognosis of the intermediate term of the
> >economy.
> >Is the 70% drop in the NASDAQ due to a economic bursting or do
> >they mirror some more important long term secular trend.
The NASDAQ bust is a _financial_ bubble that burst in anticipation of a more general _future_ downturn in sales and production, in this case mostly of "hi tech" commodities, since NASDAQ is a tech-heavy index. Owning stock is basically a bet on the future growth in profitability of a given company, and if Mr. Moneybags thinks that six months down the road profits are going to fall or even turn into losses, they are going to take their money the hell out of the stock market now, for the short term, and park it in a Treasury bond or bank deposit whose (relatively lower) rate of return is (virtually) guaranteed.
So, I don't think it mirrors a long-term secular trend. Bursting bubbles mirror the immediate conjuncture and anticipate a medium term trend towards recession.
>Is the
> >accumulated levels of consumer debt necessitating forced savings
Well, this could be why Clinton created a Federal surplus - this would be a form of "forced savings". But there is not necessarily a direct causal connection between the accumulation of consumer (and corporate) debt and the creation of the federal surplus.
>and is
> >this causing considerable problems on the demand end of the economy?
Not yet, but it could. A recession - unemployment, loss of bonus pay and stock options - though, would force consumers to "save" by paying down debt ( = negative savings) rather than spend, further amplifying the recession.
The real problem at the end of _this_ business cycle is not excess consumer inventories or excess demand (inflation), but excess investment in means of production, i.e., machinery of all sorts that is ultimately used to produce consumer goods. It will be extremely difficult to quickly boost effective demand - which has _not_ been dropping in the US - to absorb this greatly increased (potential) productive capacity. So all of this accumulated machinery (sitting around at a bankrupt dotcom, for example) will have to be "worked down" - sold and resold at greatly reduced prices until it find a new productive home somewhere. But this is precisely difficult to do in the aftermath of a burst bubble, which _is_ capital fleeing productive investment. So it will be hard to recycle all that excess machinery without new capital investment in production that could re-absorb this excess. That is the present dilemma.
> >Has the redistribution of wealth upward starved spending in the economy and
> >are we going back to the usual pattern of more money for the top 1%,
> >stagnation for everyone else.
This is a different question. It is basically political. Actually we've been in the pattern described above for most of the last 20+ years in the US. The class struggle between capitalists and workers ultimately determines the distribution of income. In the absence of class struggle (where workers are passive), the inherent tendency of capitalist accumulation is towards an upward skew of income to the top 1% and the (relative or absolute) impoverishment of the rest of society.
The prospect in any recession, like the one we are staring in the face at present, is for the skew upwards to be even more rapid and violent. Beyond that, one cannot predict.
>Is foreign investment
> >drying up because of better opportunities elesewhere producing considerable
> >capital outflows?
I don't know if foreign investment is leaving the US yet, but if the us dollar falls, the answer would be yes. Watch the US dollar.
> >Is the high real interest rates starving investment?
I'd say no. See my explanation of _overinvestment_ above. TOO MUCH investment is now causing a (unfolding) scarcity of investment. This process has not yet hit bottom.
>What are the
> >positive economic signs in the
> >intermediate term for preconditions for meliorating the skewed distribution
> >of wealth
None that I can see. "Positive economic signs" would be increased strike activity, falling unemployment. In general, certain political signs must first appear in order to create the conditions for the economic signs you are looking for. Like if 10% of working people started supporting a US Labor Party rather than the Democratic Party. But that would require that the US labor Party run candidates.
>or the
> >immanent decline into recession.
This must be answered separately. It is possible for capitalist governments to soften the impact of recession (but probably not prevent it entirely) independly from political pressure from workers. The Bank of Japans' recent decision to (possibly) flood the world with yen is one such sign. This kind of reinflation could be carried out by the US as well, but it also lowers workers' real wages and salaries, and therefore acts to distribute incomes upwards to the top 1%. However, inflation's visibility to workers created conditions for workers to demand constant pay raises to keep up with inflation, which can fuel the increase in class struggle, strikes, etc. Capitalists don't like that, plus it devalues existing investment, so that is why people like Greenspan are so anti-inflation.
Well, I tried... -Brad Mayer
> > --mike
>I've been waiting all day for a reply to the thoughtful post below, which
>has been buried in endless blubbering about the agonies of academic life.
>Academics, please, pull your heads out! Most of the exploitation now
>occurring in the world is actually happening *off* campus. It's called
>capitalism; you may have read about it in the newspapers.
>
>More and more, the LBO list strikes me as the Holy Roman Empire of
>listservs, being neither really leftist, nor concerned with business, nor
>particularly observant of what's happening in the world right now.
>
>Carl