[OPE-L:6018] Fw: Evidences for the severity of this crisis

From: Gerald_A_Levy (Gerald_A_Levy@email.msn.com)
Date: Wed Sep 26 2001 - 04:58:23 EDT

----- Original Message -----
From: "Chai-on Lee" <conlee@chonnam.ac.kr>
Sent: Wednesday, September 26, 2001 4:25 AM
Subject: Evidences for the severity of this crisis

> Jerry asked me to provide evidences for the following assertions.
> > One apparant thing is that the present economic crisis is going to be
> unprecedented.  It is  more   severe than the 1929 one, in its scale, in
> coverage, in its less remained instruments. <
> What evidence do you have for these assertions?
> At present it looks not so severe. But it will be as it is just beginning
now after July this year (when the service and construction sectors began to
decline along with the manufacture)
> It is going to be severe for the following reasons.
> (1) Almost every country on the whole globe fell into a synchronized
depression, which is unprecedented.
> (2) For the last 9 years, with no exception, economic boom has been
artificially created by credit expansion. IT sector in particular has been
boosted uttermost despite it had no profitability.
> (3) Yes, IT industry contributed to productivity increases in other
sectors. But other sectors' productivity increase itself did not guarantee
the profitability of such sectors, for it was not related with the extra
surplus value which arose when the productivity gaps were wide between
> (4) Except a few advanced countries, almost every continent  is in
political turmoil. In Asia, many presidents and prime ministers have been
replaced in undue courses. In Latin America, too, political turmoils are
growing. The working classes on the whole globe are synchroniously
mobilized. This is also unprecedented.
> (5) The capitalist class has less instruments to resolve the worsening
situation. The FRB keeps on lowering the interest rates (will it do so until
they reache at zero level?). Keynes described this situation as the
euthanasia of the rentier class in the Conclusion of his "The General Theory
of ..",  His vision was the end of capitalism.
> Well, maybe, the interest rates will abruptly jump up when the US war
begins only to reduce its psychological effect on the economy. But its
physical effect cannot be hidden.
> (6) The legitimacy will be in question when the central banks cannot but
intervene to boost stock markets. Why not boost labor markets instead of the
stock markets?
> I think something must be done in preparation.
> In solidarity
> Chai-on

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