> Isn't it possible to say that the basis for the crisis is in the real
> sector without being an advocate of real business cycle theory? Lack of
> perceived sufficient profit in real investment or in traditional banking
> led to an excess of financial practices that set up the credit cycle.
> Once
> the credit crunch set in, of course, it had an undeniable impact.
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http://www.mail-archive.com/pen-l@sus.csuchico.edu/msg09062.html "Finance appears to be a critical mediating channel between changes in underlying parameters of accumulation like the markup and the ebbing of aggregate demand associated with the realization phases of crises. The disruption of the financial system is itself one of the most dramatic manifestations of such crises. But the circuit of capital analysis tends to confirm the view that financial problems have their origin in systematic effects of capital accumulation. Crises are not primarily financial, and no reform of the financial system alone can eliminate the tendency to crisis.
[...]
"Furthermore, if the persistence and severity of crises depend on the persistence of financial imbalances, there are presumably strong state measures available to avoid systemic catastrophe. The financial system is a system of promises, and a financial crisis is a situation where a large number of such promises cannot be met consistently. If the state can achieve an orderly dissolution of enough financial promises, it can create a situation where accumulation can proceed, as long as there is a surplus value potentially available in the unpaid labor of productive workers.
"This last remark calls into serious question the idea of a final or ultimate crisis of capitalist production arising from purely from the predictable effects of accumulation. Economic crises may become more severe in their social impact as larger parts of the population depend on capitalist production to meet an ever larger part of their need. But if social labor is capable of producing a surplus, it is hard to see why a society that agreed on capitalist principles could not arrange to have that potential surplus take the form of a surplus value."Duncan Foley "Money, Accumulation and Crisis" 1986].