[Marxism] Soros: Obama must implement a radical and comprehensive set of policies
donaloc at hotmail.com
Fri Jan 30 04:16:46 MST 2009
Interesting article here by Soros with some interesting insights on how CDSs reverse natural disincentives to shorting. However, he only just appears to have discovered that financial markets can be irrational and that bear runs can be self-validating.
It is of interest to see people like Soros question the very pillars of vulgar economy such as recognising 'reflexivity' and questioning the 'efficient market hypothesis'. But to my mind these still are only surface only explanations of the speed of the crash. CDSs and shorting only overcorrected downwards on an existing downward trend.
Krugman's Keynesian prescriptions are more to the point. What's at issue here is a fundamental imbalance in the global economy. That isn't going to be fixed today or tomorrow.
>From a political economy perspective, I am wondering if any articles are around that would shed light on a question of some importance. I.e. whether the ballooning and crunch of credit reflected primarily the ever growing disconnect between the real economy (value) and the financial economy (money) within the core economies or whether the ballooning of credit was necessary to facilitate the imbalance in trade (seen in underlying value terms) between the 'third world' and the imperialist countries.
I'm unclear on this, my political orientation made me blame the latter cause as it is obviously a massive problem but the question is really whether this was at the root of the credit ballooning itself. At this stage, the question is perhaps somewhat academic as the credit crunch (and deleveraging) has clearly impacted the possibility of maintaining a trade imbalance in the imperialist countries without a ballooning in debt.
I believe that all of this has massive strategic implications for revolution. The underlying economic conditions which underpin the aristocracy of labour are being removed. British new labour is now talking of a return to industrialisation and away from the financial services. The incoming US administration clearly are approaching social reformism. Things are looking up all around.
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