[OPE-L:6109] Re: Re: falling profits

From: glevy@pratt.edu
Date: Mon Oct 29 2001 - 11:37:31 EST

---------- Forwarded message ----------
From: "Patrick L. Mason" <pmason@garnet.acns.fsu.edu>
Date: Mon, 29 Oct 2001 11:01:06 -0500
Subject: Re: [OPE-L:6107] Re: falling profits

The US economy is quite strong because the 20 year crisis from 1973 to
1992. The weakest sectors of the American economy were obliterated. The
standard of living of most households were driven downward. And, during the
1990s government debt was severely reduced. Unlike Japan, the US public has
the capacity to run enormous deficits to fight off unemployment.

Further, (if I remember correctly) unemployment in the "troubled" Japanese
economy is "only" around 4 or 5 %, which is pretty close to the
unemployment rate in the strong US economy. China has been experiencing
phenomenal growth.

I'll hold off on using the word "crisis" until the US economy reaches 8 -
10 percent unemployment. At that point, the rest of the world will no
longer have the gigantic American market to run surpluses in the balance in
the trade.

Think about what's happened to the stock market in the last 1 1/2 years.
The Dow was near 12,000 now it's hovering around 9,500. The NASDAQ was
around 4,500 (I think) now it's about 1,800. Despite these enormous
reductions in asset values, the unemployment has ticked up "only" about 1.2
percentage points.

The stock markets today are right about where they were on September 10,
despite sharp declines in the week after September 11.

So, I take the unemployment numbers and the stock market numbers to
indicate substantial strength in the real economy.

peace, patrick

At 03:27 PM 10/29/01 +0000, you wrote:
>Re Patrick's [6106]:
> > Also, the international situation was very much different during
> > 1945 -  1973 than it is today. Germany, Japan, China, and the USSR
> > - along with the US - all enjoyed substantial growth during this
> > period. Today, Japan has been in the tank for over a decade. The
> > USSR has fallen apart and the economies of many of its former
> > members are basket cases. Germany also is having problems.
> > Basically, the US has the strongest economy, at least
> > among the largest economies in the world.
>These are all powerfull arguments *for* the claim that during the
>current period the international capitalist economy is undergoing
>a 'crisis' rather than a 'garden-variety recession'.
>While there is uneven development internationally, represented by
>what you claim to be the 'strength' of the US economy, what about
>the *inter-dependence*  and *inter-connectedness* of the US
>economy with the rest of the world capitalist economy? For these
>reasons, many economists from around the world (including some on
>this list) have been expecting the 'other shoe' (the US economy) to
>drop for years now.
>What do you attribute the strength of the US economy to vis-a-vis
>the rest of the capitalist world?  How has the crisis in the rest
>of the world capitalist economy (don't you believe 'crisis' to be
>an accurate descriptive term for the current state of the *world*
>capitalist economy?) afected the 'strongest economy'?
>In solidarity, Jerry

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