http://www.economist.com/agenda/displayStory.cfm?story_id=1793748

This article by the economist shows the ever deepening economic struggle in the west, for about 3 years now the world's economies have began to post modest to recessionary growth rates. The capitalist economy has depended on a modest inflation rate, goods gradually got more expensive so would wages. But the article clearly points out that many countries are on the brink of deflation:

The IMF has sorted the world’s biggest economies into four categories: Germany shares the high-risk slot with Japan and Hong Kong—both of which are already experiencing deflation—and Taiwan.

In the 70's-90's all those economies were hot and experianced a heathly growth rates. May I dare say even robust growth rates. But now the situation has gotten to the point in which we have seen a perfect storm against the capitalist economy, War in Iraq, SARS, terrorism,and the global recession. Deflation is starting to become a big problem in the central banks of the world.

What else is making this situation worse for some? A big and strong Euro, a currency I believe was made for the good times not the bad. Usually countries like Germany, Italy and the like shouldn't be scared so much of a high cost of their goods compared to other nations. But now that the Euro is begining to reach levels beyond that of the US dollar could Europe's once coveted trade balance start shrinking? A weaker US dollar is music to the ears of US exporters but not to importers, and in essence countries that depend on exports to the US could begin to feel the pain. Is the days of the Green back numbered?

SARS has shown the world the strength of a pathogen. The strength of this disease of a death rate of 15%! Has shown that it can be contained but the ineptitude of the Chinese government to report has shown that she still cannot be trusted, China's growth rate has shrunk from 8% to 5.8%! (Mind you to the Chinese that's a disaster!)

Not everything is doom and gloom, in the G8 Russia and Canada are posting strong growth, abd both have balanced books. Both are getting nice amounts of cash from higer oil prices. In Latin America Brazil is begining to show signs of a recovery after the scare of the Lula election, and Argentina is growing again expected to grow at 4%, after a 14% contraction in 2002.

So what I want to really ask is, is this recession indictitive of a bigger thing or yet another worldwide recession ready to pass?

so ahh... whats the connection b/w sars and capitalism? would capitalism be in better shape if china was trustworthy?

as for your question, i would say capitalism has never been in better shape. so its going thru the usual motions but so what? the rich still get richer, the poor still get poorer, the earth is still being laid to waste........etc. go capitalism!

I concurrrrr with spookz..*smokes a pipe*:rolleyes:

You coudl say that Capitalism is in good shape, doing what it does best, ie increase divisions and inequalities. And dont argue, all teh figures prove that inequalities are increasing across the western world. The problem is though that it has its own contradictions that lead to trouble, but yet if the people in charge decide to change the rules, (like with extra bank holidays at times of runs on the banks.) then things will sort of improve. Or alternatively we could have a nice time of deflation and other such stupidities, whereby there is all the productive capacity available, and plenty of people willing to work it, but no money goign round.
So teh quesiton is, who creates the money? think about it a while.

Capitalism and the free market were never meant to withstand the creation and ascendance of the corporation. Corporations are just the New Aristocracy. All the power, none of the accountability. The free market only works if all the players are on more or less equal footing. Corporations with the money and power equivalent to a small nation completely ruin the balance.

fraggle

yes i agree. you expounded on this in the "must we go to shit" thread. i get the idea that this boils down to the natural tendency of corporations to engage in monopolistic practices in order to maximize profits. however you should also understand that these companies do not operate in a vacuum. regulating commerce is the business of legislators. all that is required is the political will and freedom to do so. perhaps certain reforms would do the trick. capitol hill might not be so ready then, to bend over every time a lobbyist comes visiting

what do you think? i am cynical but really, something must be done! what about.......a.....a......a planned economy?;)

A planned economy wouldn't work because the corporations would be given contracts to do the planning.:mad:

There was a thread on the below link several months back but I think it fits the current topic also. It is basically a worse case scenario with some possible solutions.

http://www.strategy-business.com/press/article/?art=8814892&pg=0

Power corrupts. We're talking here about building one institution with the capacity to grow ever more powerful, then building another institution with the same capacity, for the alleged purpose of keeping the other in check???

Didn't we already try that with the "Democrats" and "Republicans," who couldn't even maintain the adversarial illusion during the war in Iraq?

There is a regulatory bureaucracy already in place for every industry, at least the ones that have a lot of power. I think chimney sweeps and restorers of classic Volkswagens might not be monitored too carefully. They do the same dance as the two Conferences of the Republocrat League. TV wrestling at its finest. Lots of rhetoric, occasional cuts and bruises to show that it's real. Sometimes they actually gang up on a weakling and destroy it in a showy spectacle worthy of the Roman Colosseum, trashing the lives of thousands of employees and small-time investors -- usually after its executives have safely absconded with the cashbox.

Throughout human history, the only constant has been "Power corrupts." Religion, government, military, academia, industry, communications. The more powerful an individual grows, the more excuses he finds to compromise his principles. Ditto for organizations -- armies, churches, labor unions, corporations, governments, universities, chains of newspapers and TV stations. When it happens at the macro level, a whole country, a whole religion, a whole industry, then we just have to duck.

The only solution is to prevent individuals, organizations, or institutions from achieving that point on the power curve where the corruption sets in irreversibly.

I don't know how to do that, especially when the powerful, corrupt entities are already in place. But I'm sure the answer is not to create a complementary entity of the same size and power. No matter how it goes down, you're going to end up with two of them, which is two too many.

re "I think chimney sweeps and restorers of classic Volkwagens might not be monitored too carefully."

Nor were Enron, Global Crossing , or Worldcom.

"I will execute the CEO while he sits at his mohagany desk"

Calm down Spooks and just push the bastard out of his office window and blame it on his ex wife.

Well, what you could is what a friend of mine wants, which is laws restricting the size of business's, and decision making done by everyone at teh local level who then send representatives upwards to a higher level of decision making and so on. That way you stop too much power accumulating in companies, if you say dismantle or nationalise them if they get above say a million turnover. But then shes a communist, so what does she know?
Certainly the local devolution of power matters to me, even though I am not so sure communism is the way to go. Havnt you in the USA noticed your states are going belly up, a bit like our councils here with their never ending increases in council tax?
Now why is that, I hear you ask? As far as I can see it is connected with the ever increasing amount of htings that need done, like if you want the gvt to do something it has to be paid for, whether its food inspection or care for the elderly. But you seem to have been able to afford them great when we were in a boom time, so whats wrong now? to which the only reply is where has the money gone? Always follow the money.

But then shes a communist, so what does she know?( guthrie)

i am willing to discuss communism........variations of, pro and cons....blah

Justice USA
re "I think chimney sweeps and restorers of classic Volkwagens might not be monitored too carefully." Nor were Enron, Global Crossing , or Worldcom.This is like the war in Iraq. Nobody can convince me that we’ve got the whole story yet. The finance sector is a triopoly. The auditing firms play a third role, distinct from the corporations and the government. According to the script, their job is to regulate the corporations, as an outside agency rather than a government bureaucracy. In other words, there is so much money floating around at that level that they can split it up three ways and make it look to the peasants like that sector is really well managed. Analyzed from that perspective, what happened isn’t much different from the California electricity supply. Collusion between the fox and the hens.

Every now and then some brash young player moves up the ranks quickly in this fake wrestling match, and temporarily gets a big advantage over some of the elders. What happens next depends on how everybody feels that day, and whether it’s time to throw a bone to stockholders, voters, or other corporations. But don’t doubt that it isn’t as well scripted as any other day in that industry. When the new kid is finally cornered he may be rewarded and given the key to the executive bathroom, he may be put back in his place while keeping an eye on him as he matures to become one of the good old boys, or he might get his ass kicked if he pissed off too many of the wrong people.

Powerful, corrupted institutions by definition have to be full of powerful, corrupted people. They’re bound to have some exciting days as these hellions play their little games. To us they’re just one big pack of pit bulls, but every pack of pit bulls erupts into a barroom brawl once in a while and a few of them get torn up pretty bad.

Even though I don’t yet know (and probably never will) what really happened within Enron et al., I don’t believe that these debacles disprove my theory about corporations and government agencies being twin pillars of corrupt power who contract with each other to keep the rest of us penniless and powerless.

And I absolutely do not believe that the answer to that problem is to try to create a fourth pillar of corrupt power to keep the other three in line!

i think people get way to freaked out during a recession, its the business cycle of capitalism, up, down, up down, thats it. Nothing as drastic as the great depression would happen so i wait till the stocks go back up.

By the way, why is everyone so scared of socialism? Is a semi-controlled capitalist system that evil? Obviously(ENRON,WORLDCOM), laissez Fair just isnt good enough, maybe we should give the government more control? Dont hurt me montana militia! But if the government had more control, i think there should be a more direct citizen influence on it, no more electrical college stuff yknow, and beyond that as well....complicated but maybe less whining about the economy.

i think people get way to freaked out during a recession
It has to do with research grants not being funded and jobs not being found and loans with due payments and morgages and food bills and school fees and a thousand and one other things that most working stiffs have to worry about Carnuth...

shit happens, to everyone, some people are worse off than others, its been like that since forever, nothing about this is unique to any time period so none of that matters.

shit happens
Carnuth, why do I get the impression that none of those problems I listed apply to you?

"I honestly don't believe that the answer to that problem is to try to create a fourth pillar of corrupt power to try to keep the other three in line."
__________________________________________________ _
I agree, the corruption only has to be removed from one pillar to
bring the other two in line. But how do we accomplish that?

It has been on the brink before many times, usually some big war breaks out, people die, countries get looted, money changes hands and we can begin our next cycle of rebuilding - flourish - sustain - decay - WAR!

At this moment it looks like we are in the decay phase, the big war is inevitable:bugeye: ????

Maybe if Al-quaida continues to twist like a thorn in the side of the west and the economy grows really bad, we might feel like doing a replay of the crusades and colonial times, feeding our hungry stomachs at the expense of others ????

I think, This is THE MOMENT we should invest heavily in things like nuclear fusion and mooncolonisation, to create a new technological renaissance era and cheap energy / materials that could drag us out of warprospect... It will take a huuuuge combined investment, but projects like this generate jobs etc. and the final payoff should make it worth it.


A second NEW DEAL ?

"flourish- sustain-decay-war"
_________________________________________________
We have a new element to add to this foursome, Global corporate corruption.

Below is a good read on corporate history in America.

http://www.adbusters.org/magazine/28/usa.html

Originally posted by EI_Sparks
It has to do with research grants not being funded and jobs not being found and loans with due payments and morgages and food bills and school fees and a thousand and one other things that most working stiffs have to worry about Carnuth...

Carnuth, why do I get the impression that none of those problems I listed apply to you?

i have to deal with everything except for loans, mortgages, and research grants alright?

i live in a nice sparsely furnished apartment, get my food from ralphs, pay the friggin insurance on my car, pay for the place which is in one of the lousiest parts of Hollywood, pay for my junior college cause i cant afford to go to Harvard, and Im not worried. shit happens, you dela with it as best you can, and if you cant, oh well, you keep trying. Or just keel over and die, either is fine, just depends on your outlook...I see it as it can get better just as quick as it can get worse. So it goes.

In other words Carnuth, you only have yourself to worry about. No dependents, no kids.
In that situation, you don't have the right to complain that those with families to support are panicing about the recession.

Ei I think the world has enough children, and he is smart not having aby kids. I don't want them, got to look out for #1.

Immaterial nico.

i think im a bit young to be having kids as of yet. However, I do look after my elderly father(i gotta pay for his home!) and i do visit my family and such...Im going to j.c. to get a good job so i can afford to support a family. So in that respect, until i do that, you have your point, and i have mine. Gimme a few years and ill get back to ya. ;)

Carnuth aren't you 48? It said that you were born in 1955, you are too old to have kids LOL.

nico
would you like a lolipop to suck on?

lol, no, im not 48, i just think that 1955 was a nice year. =) B-days not Oct 11 either, 10-11-55 is a locker combination

and would you like to tell us where this locker might be?

Originally posted by justiceusa
I agree, the corruption only has to be removed from one pillar to bring the other two in line. But how do we accomplish that? Since it's the power that creates the corruption, invariably, without exception, at every time and place in human history, it stands to reason that you cannot simply "remove the corruption." You have to start by taking away the power.

Unfortunately many (most?) societies reach a point of no return, where the powerful are so powerful that they are unassailable. At that point there are three options. (Maybe more, but these three are so horrible I'd hate to imagine what the next worse one would look like!)

1. Do nothing. Eventually the powerful will become so corrupt that they will cease to care about even the most basic caretaking responsibilities that are supposed to come with power. They'll deplete the ocean fish stock by 90 percent, allow key infrastructures to decay, squander their nation's international goodwill on quixotic adventures, and just generally let the country crumble around their ankles, a la Argentina, Cambodia, the Mayans, and every incarnation of Russia. We don't know any contemporary countries like that, do we.

2. Civil war. The power structure will fragment into factions. It may be that one faction sees the light and wants to forestall the decay, or it may simply be just one more free-for-all fight-to-the-death within the pit bull pack. The survivors may be sufficiently weakened that the citizenry can seize the opportunity to reform their society's structure and prevent organizations from ever again becoming that powerful. Unfortunately in the wake of a civil war the citizenry usually clamors for even more powerful government to quell the civil unrest that generall follows.

3. Revolution. The citizenry itself organizes and becomes yet another powerful institution. Before they have a chance to become corrupt they express their disgust with the existing corrupt power structure by overthrowing it -- governmental agencies, corporations, churches, universities, you name it. If it's got any power and the slightest hint of corruption, out it goes. The wake of a revolution is generally even more horrifying than the result of a civil war, so once again the populace is tempted to reinvent Big Government just to keep the farms irrigated and the food trucks running.

Clearly the best choice is not to get to the point of no return. If the U.S. is not there yet, there are a few things we can do to try to prevent it from happening.

1. Vote against all incumbents. A Congress full of beginners is a weak Congress that can't do a lot of damage beyond simply wasting our money paying their own salaries.

2. Vote your stock. A good rule of thumb is to vote against every measure proposed by the board, and for every measure proposed by a stockholder. Don't give your proxy away to your stockbroker or to one of the corporate pawns. Interlocking directorates are not in synch on every single issue, sometimes they have rivalries that we can exploit. An uprising by the mom and pop stockholders really could swing a vote away from awarding some scoundrel a Golden Parachute.

A corollary to that is to support mutual funds that vote the way you want them to. Do not buy into a mutual fund that refuses to disclose how it votes the stock it owns. The world of mutual funds has not reached the pinnacle of power and corruption yet, there are lots of funds out there with integrity. Green, Pink, Christian, atheist, whatever you want. Support them and let them fight the good fight.

3. Support the Second Amendment. If you don't want to own a gun then don't. I sure don't and the world is a safer place for it. But please don't stop others from owning them and learning how to use them expertly, including keeping them out of the hands of untrained children. A well armed populace really does make the government stop and think before it does something just a little bit too unpopular.

4. Talk to people. It's frightening how poorly informed most Americans are. I just saw the results of a random survey in which 17 percent of them couldn't find the U.S. on a globe! Challenge people to think. Ask them why they believe the things they believe in. Of course that requires you to be well enough informed to carry your side of the dialog. The next election could be America's watershed. If the puppeteers who control Bush get four more years to control this country with absolutely no threat of accountability, I'm not sure the U.S. will survive in any form we will recognize. If we don't piss somebody off bad enough to get nuked by terrorists, we might just collapse under the weight of our own ineptitude like the Maya civilization. (Cut down all the forests, turned them into farms, ran out of wood, water, and finally food.)

Great reply. I hope a lot of people read it and take it seriously.:)

I get the impression Carnuth doesnt think we can make things get better. Yet somehow they have done over the past few centuries, to some extent. But only for some of the globe.
If we all jsut sit there and shrug our shoulders and say oh, well, its always like this, nothing will get done.

Thats right, fraggle rocker. IM sort of trying to work out what sort of revolution we need, myself. But then i also recognise that i want a society that would suit me, to some extent. The difficulty is in trying to make a society that caters for as many as possible, adn thats where democracy comes in. But then how can one have political equality without economic equality?

1998 showed us that a economy as small as Thailand with her currency devalued that in this globalized world one developing economy falling could and usually does affect the rest of the developing world, in 1998 the contagion spread to Malaysia, Singapore, S.K, Russia, then to Latin America. Here we go again, could this spell another recession in Asia which will have economcily changing implacations worldwide?

http://www.economist.com/agenda/displayStory.cfm?story_id=1792351