 | |  | |  | |  | |  | |  | |  | |  | |  | |  | |  |
| SYSTEMIC FRAGILITY in the GLOBAL ECONOMY Jack Rasmus ISBN 978-0-9860769-4-7 490 pp. $29.95 2015 EBOOK: ISBN 978-0-9860769-3-0 $19.00 |
SYNOPSIS
Just as contemporary economics failed to predict the 2008-09 crash, and
over-estimated the subsequent brief recovery that followed, economists
today are again failing to accurately forecast the slowing global economic
growth, the growing fragility, and therefore rising instability in the global
economy.
This book offers a new approach to explaining why mainstream economic
analyses have repeatedly failed and why fiscal and monetary policies have
been incapable of producing a sustained recovery.
Expanding upon the early contributions of Keynes, Minsky and others, it
offers an alternative explanation why the global economy is slowing long
term and becoming more unstable, why policies to date have largely failed,
and why the next crisis may therefore prove even worse than that of 2008-
09.
Systemic fragility is rooted in 9 key empirical trends: slowing real
investment; a drift toward deflation; money, credit and liquidity explosion;
rising levels of global debt; a shift to speculative financial investing; the
restructuring of financial markets to reward capital incomes; the restricting
of labor markets to lower wage incomes; the failure of Central Bank
monetary policies; and the ineffectiveness of fiscal policies.
It results from financial, consumer, and government balance sheet
fragilities exacerbating each other -- creating a massive centripetal force
disaggregating and tearing apart the whole, untameable by either fiscal or
monetary means.
This book clarifies how the price system in general, and financial asset
prices in particular, transform into fundamentally destabilizing forces under
conditions of systemic fragility. It explains why the global system has in
recent decades become dependent upon, and even addicted to, massive
liquidity injections, and how fiscal policies have been counterproductive,
exacerbating fragility and instability.
Policymakers’ failure to come to grips with how fundamental changes in the
structure of the 21st century global capitalist economy—in particular in
financial and labor market structures—make the global economy more
systemically fragile can only propel it toward deeper instability and crises.
An appendix describes three simultaneous equations that express in
notational form the variables associated with the Theory of Systemic
Fragility.
Just as contemporary economics failed to predict the 2008-09 crash, and
over-estimated the subsequent brief recovery that followed, economists
today are again failing to accurately forecast the slowing global economic
growth, the growing fragility, and therefore rising instability in the global
economy.
This book offers a new approach to explaining why mainstream economic
analyses have repeatedly failed and why fiscal and monetary policies have
been incapable of producing a sustained recovery.
Expanding upon the early contributions of Keynes, Minsky and others, it
offers an alternative explanation why the global economy is slowing long
term and becoming more unstable, why policies to date have largely failed,
and why the next crisis may therefore prove even worse than that of 2008-
09.
Systemic fragility is rooted in 9 key empirical trends: slowing real
investment; a drift toward deflation; money, credit and liquidity explosion;
rising levels of global debt; a shift to speculative financial investing; the
restructuring of financial markets to reward capital incomes; the restricting
of labor markets to lower wage incomes; the failure of Central Bank
monetary policies; and the ineffectiveness of fiscal policies.
It results from financial, consumer, and government balance sheet
fragilities exacerbating each other -- creating a massive centripetal force
disaggregating and tearing apart the whole, untameable by either fiscal or
monetary means.
This book clarifies how the price system in general, and financial asset
prices in particular, transform into fundamentally destabilizing forces under
conditions of systemic fragility. It explains why the global system has in
recent decades become dependent upon, and even addicted to, massive
liquidity injections, and how fiscal policies have been counterproductive,
exacerbating fragility and instability.
Policymakers’ failure to come to grips with how fundamental changes in the
structure of the 21st century global capitalist economy—in particular in
financial and labor market structures—make the global economy more
systemically fragile can only propel it toward deeper instability and crises.
An appendix describes three simultaneous equations that express in
notational form the variables associated with the Theory of Systemic
Fragility.
TABLE OF CONTENTS
INTRODUCTION
Fundamental Trends & Determinants
Key Variables and Forms of Fragility
Instability in the Real Economy
Financial Instability in the Global Economy
Outline of the Book
PART I: STAGNATION AND INSTABILITY IN THE GLOBAL ECONOMY
1. FORECASTING REAL & FINANCIAL INSTABILITY
The Chronic Problem of Over-Optimistic Official Forecasts
2014: Transition Year for the Global Economy
Europe
Japan
China
Global Oil Deflation
EMEs
USA
The Prediction Dilemma Posed by SWANS—Gray and Black
IMF’s Global Economic Forecasts
World Bank Forecasts
OECD Forecasts
Global Central Bank Forecasts
The Inability to Forecast Financial Instability
2. THE ‘DEAD-CAT BOUNCE’ RECOVERY
Dead Cats and Epic Recessions
Five Realities of the Post-Crash ‘Bounce’
Secular Stagnation—A New Normal?
Industrial Production and Trade Recessions Are Already Here
Redefining GDP to Overestimate Global Growth
One More Bounce?
3. THE EMERGING MARKETS’ PERFECT STORM
What’s an EME?
External Forces Destabilizing EMEs
The China Factor
The AE Interest Rate Factor
Global Currency Wars
Global Oil Deflation
Who ‘Broke’ the EME Growth Model?
Internal Forces Causing EME Instability
EME Capital Flight
EME Currency Collapse
Domestic Inflation
Brazil: Canary in the EME Coalmine?
EME Financial Fragility & Instability
4. JAPAN’S PERPETUAL RECESSION
Japan’s ‘Made in the USA’ Bubble and Crash
Japan’s Rolling Banking Crisis
Lessons of 1990-2005 Ignored
Japan’s Five Recessions
Japan’s Response to Recession, 2008-2012
Shirakawa’s Warning
‘Abenomics’ 1.0: Back to the Future
Abenomics 2.0: Doubling Down on Policy That Doesn’t Work
Growing Fragility in the Japanese Economy
5. EUROPE’S CHRONIC STAGNATION
The Limits of Exports-Driven Recovery
German Origins of Eurozone Instability
Eurozone’s Double Dip Recession: 2011-2013
ECB Opens the Money Spigot … Just a Little
Germany’s Export Pivot to Asia
Eurozone’s 2nd Short, Shallow Recovery: 2013-2014
Eurozone’s QE Money Firehose: 2015
‘Triple Dip’ Recession on the Horizon?
Lessons the Eurozone Has Yet to Learn
6. CHINA: BUBBLES, BUBBLES, DEBT AND TROUBLES
China’s Successful Fiscal Recovery Strategy: 2009-2012
AE’s Failed Monetary Recovery Strategy: 2009-2015
China’s Liquidity Explosion
The Inevitable Debt Crisis
China’s Shadow Banks
China’s Triple Bubble Machine
China’s Real Economic Slowdown: 2013-2015
China Global Contagion Effects
China & Global Systemic Fragility
PART II: THE DEAD CAT’S 9 LIVES:
KEY TRENDS OF SYSTEMIC FRAGILITY
7. SLOWING REAL INVESTMENT
Real Investment vs. Financial Investment
Slowing Real Asset Investment
Causes of Slowing Real Investment
8. DRIFT TOWARD DEFLATION
Deflation Effects on Investment, Consumption and
Financial Assets
From Global Disinflation to Deflation
9. MONEY, CREDIT & EXPLODING LIQUIDITY
Liquidity as Central Bank Money
Liquidity as Inside Credit
The Myth of US Debt Deleveraging
10. RISING LEVELS OF GLOBAL DEBT
The Continuing Rise in Global Debt
Debt and Fragility
11. THE SHIFT TO FINANCIAL ASSET INVESTMENT
Origins of the Financial Asset Investment Shift
Enabling Causes of the Shift
Expnding Price-Profit Gaps
How Big Is the Shift?
The Unstable Financial Asset Markets
Where Is the Next Financial Fault Line?
12. STRUCTURAL CHANGE IN FINANCIAL MARKETS
From Liquidity & Debt to a New Financial Structure
What Is a Shadow Bank?
How Big Is Global Shadow Banking?
The Futility of Shadow Bank Regulation
Why Shadow Banking Is Fundamentally Unstable
Changing Financial Structure as Source of Financial Instability
13. STRUCTURAL CHANGE IN LABOR MARKETS
Financial and Consumption Fragility Compared
Forms of Labor Market Structural Change
Changes in Job Structure
Debt as a Reduction of Future Wage Income
Wage Income, Debt, and Consumption Fragility
14. CENTRAL BANKS & STRUCTURAL FRAGILITY
Monetary Policy Tools—Old & New
The $25 Trillion Global Bank Bailout
Why Free Money Continued After the Bailouts
Central Bank Liquidity Feeds Financial Asset Inflation
The Contradictions of Central Banking
Why Central Banks Don’t Stop Financial Bubbles
Central Banking and Systemic Fragility
15. FISCAL POLICY & GOVERNMENT FRAGILITY
Defining Government Debt and Income
Estimating Government Debt
Key Trends: Government Debt, Income & Fragility
PART III: THE FAILED CONCEPTUAL FRAMEWORK OF
CONTEMPORARY ECONOMIC ANALYSIS
16. HYBRID KEYNESIANS & RETRO-CLASSICALISTS
Conceptual Limits of Classical Economics
Postscript on Marx’s Economics
The Neoclassical Detour: 1870s to 1920s
Keynes’ Original Contributions
The Limitations of Keynes
Austrian Credit Cycles
The Hybrid-Keynesians
The Retro-Classicalists
17. MECHANICAL MARXISM
Critiquing the Propositions of Mechanical Marxist and
Falling Rate of Profit (FROP)
FROP Explains Short Run Business Cycles
Negative Productivity, Supply Side, and Collapsing
Long Run into Short Run
Only Productive Labor in Goods Production Creates
Surplus and Profits
Only Primary Exploitation of Productive Labor
Determines Changes in Profits
Redefining Profits to Fit the Theory
Profits Determine Real Asset Investment
Real Investment Drives Financial Investment
Financial Assets are ‘Fictitious’ Capital & Independent
of Real Investment & Cycles
Financial Asset Prices Are Not Responsible for
Economic Instability
Banks Are Intermediaries Redistributing Profits as Credit
Money, Credit and Debt
Summary
A Note on Marx on Finance in Vol. 3 of Capital
18. THE CONTRIBUTIONS & LIMITS OF MINSKY’S ‘FINANCIAL INSTABILITY
HYPOTHESIS’
Marx and Keynes Were Before Their Time
Minsky on Financial Instability
Minsky’s Contributions
The Limits of Minskyan Analysis
The Missing Dichotomy of Investment
The Burden of Kalecki’s Theory of Profits
Two- vs. Three-Price Theory
Flow vs. Income Analysis
Fragility’s Undeveloped 3rd Key Variable
Government as Solution vs. Source of Fragility
Dynamic & Systemic v. Financial Fragility
Transmission Mechanisms
Institutional Framework
Origins of Debt
Money v. Inside Credit
Business Cycles & Phases of Profits-Debt
PART IV: A THEORY OF SYSTEMIC FRAGILITY
19. A THEORY OF SYSTEMIC FRAGILITY
The Historical Context
Some Queries from History
Excess Liquidity at the Root of Debt Accumulation
Money Liquidity
Inside Credit Liquidity
From Excess Liquidity to Excess Debt
Debt and the Shift to Financial Asset Investing
Financial Asset v. Real Asset
Financial Asset Investing Shift
The New ‘Spread’: Financial v. Real Investment
From Stagflation to ‘Definflation’
The Irrelevant ‘Money Causes Inflation’ Debate
Liquidity As Brake on Real Growth
Restructuring Financial and Labor Markets
Financial Market Structural Change
Labor Market Structural Change
Structural Change and Fragility
Fiscal-Monetary Policy: From Stabilizing to Destabilizing
What Can Be Done
A Brief Recapitulation of Key Trends & Systemic Fragility
Measuring the Three Forms of Systemic Fragility
Fragility Feedback Effects
Transmission Mechanisms of Systemic Fragility
Price Systems as TXM
Government Policy as TXM
APPENDIX
Preliminary Equations for a Theory of Systemic Fragility
INTRODUCTION
Fundamental Trends & Determinants
Key Variables and Forms of Fragility
Instability in the Real Economy
Financial Instability in the Global Economy
Outline of the Book
PART I: STAGNATION AND INSTABILITY IN THE GLOBAL ECONOMY
1. FORECASTING REAL & FINANCIAL INSTABILITY
The Chronic Problem of Over-Optimistic Official Forecasts
2014: Transition Year for the Global Economy
Europe
Japan
China
Global Oil Deflation
EMEs
USA
The Prediction Dilemma Posed by SWANS—Gray and Black
IMF’s Global Economic Forecasts
World Bank Forecasts
OECD Forecasts
Global Central Bank Forecasts
The Inability to Forecast Financial Instability
2. THE ‘DEAD-CAT BOUNCE’ RECOVERY
Dead Cats and Epic Recessions
Five Realities of the Post-Crash ‘Bounce’
Secular Stagnation—A New Normal?
Industrial Production and Trade Recessions Are Already Here
Redefining GDP to Overestimate Global Growth
One More Bounce?
3. THE EMERGING MARKETS’ PERFECT STORM
What’s an EME?
External Forces Destabilizing EMEs
The China Factor
The AE Interest Rate Factor
Global Currency Wars
Global Oil Deflation
Who ‘Broke’ the EME Growth Model?
Internal Forces Causing EME Instability
EME Capital Flight
EME Currency Collapse
Domestic Inflation
Brazil: Canary in the EME Coalmine?
EME Financial Fragility & Instability
4. JAPAN’S PERPETUAL RECESSION
Japan’s ‘Made in the USA’ Bubble and Crash
Japan’s Rolling Banking Crisis
Lessons of 1990-2005 Ignored
Japan’s Five Recessions
Japan’s Response to Recession, 2008-2012
Shirakawa’s Warning
‘Abenomics’ 1.0: Back to the Future
Abenomics 2.0: Doubling Down on Policy That Doesn’t Work
Growing Fragility in the Japanese Economy
5. EUROPE’S CHRONIC STAGNATION
The Limits of Exports-Driven Recovery
German Origins of Eurozone Instability
Eurozone’s Double Dip Recession: 2011-2013
ECB Opens the Money Spigot … Just a Little
Germany’s Export Pivot to Asia
Eurozone’s 2nd Short, Shallow Recovery: 2013-2014
Eurozone’s QE Money Firehose: 2015
‘Triple Dip’ Recession on the Horizon?
Lessons the Eurozone Has Yet to Learn
6. CHINA: BUBBLES, BUBBLES, DEBT AND TROUBLES
China’s Successful Fiscal Recovery Strategy: 2009-2012
AE’s Failed Monetary Recovery Strategy: 2009-2015
China’s Liquidity Explosion
The Inevitable Debt Crisis
China’s Shadow Banks
China’s Triple Bubble Machine
China’s Real Economic Slowdown: 2013-2015
China Global Contagion Effects
China & Global Systemic Fragility
PART II: THE DEAD CAT’S 9 LIVES:
KEY TRENDS OF SYSTEMIC FRAGILITY
7. SLOWING REAL INVESTMENT
Real Investment vs. Financial Investment
Slowing Real Asset Investment
Causes of Slowing Real Investment
8. DRIFT TOWARD DEFLATION
Deflation Effects on Investment, Consumption and
Financial Assets
From Global Disinflation to Deflation
- Europe
Japan
China
Emerging Markets
USA
- Oil, Commodities, and Financial Asset Deflation
QE and Deflation
Austerity and Goods Deflation
9. MONEY, CREDIT & EXPLODING LIQUIDITY
Liquidity as Central Bank Money
Liquidity as Inside Credit
The Myth of US Debt Deleveraging
10. RISING LEVELS OF GLOBAL DEBT
The Continuing Rise in Global Debt
Debt and Fragility
11. THE SHIFT TO FINANCIAL ASSET INVESTMENT
Origins of the Financial Asset Investment Shift
Enabling Causes of the Shift
Expnding Price-Profit Gaps
How Big Is the Shift?
The Unstable Financial Asset Markets
Where Is the Next Financial Fault Line?
- Global Equity Markets
Global Bond Markets
Emerging Markets’ Corporate Debt
Chinese Financial Markets
US Financial Markets
European Financial Markets
Other Global Financial Markets
Securitized Financial Asset Markets
12. STRUCTURAL CHANGE IN FINANCIAL MARKETS
From Liquidity & Debt to a New Financial Structure
What Is a Shadow Bank?
How Big Is Global Shadow Banking?
- US Shadow Banking
Chinese Shadow Banking
Europe’s Lagging Shadow Bank Sector
- A Short List of Major Shadow Banking Categories
The Futility of Shadow Bank Regulation
Why Shadow Banking Is Fundamentally Unstable
Changing Financial Structure as Source of Financial Instability
13. STRUCTURAL CHANGE IN LABOR MARKETS
Financial and Consumption Fragility Compared
Forms of Labor Market Structural Change
Changes in Job Structure
- Growth of Contingent Employment
Decline of Manufacturing-Construction Employment
Changing Structure of Unemployment
- De-Unionization and Decline of Collective Bargaining
- Hollowing Out the Middle Tier
Shrinking the Minimum Wage
Overtime Pay Exemptions
General Wage Theft
Cost Shifting Health Care
- Decline of Deferred Wage Income
The Decline in Social Wage Income
- Tech Time
Home Time
Travel Time
Double Time
Unpaid Internships
Debt as a Reduction of Future Wage Income
Wage Income, Debt, and Consumption Fragility
14. CENTRAL BANKS & STRUCTURAL FRAGILITY
Monetary Policy Tools—Old & New
The $25 Trillion Global Bank Bailout
Why Free Money Continued After the Bailouts
Central Bank Liquidity Feeds Financial Asset Inflation
The Contradictions of Central Banking
Why Central Banks Don’t Stop Financial Bubbles
Central Banking and Systemic Fragility
15. FISCAL POLICY & GOVERNMENT FRAGILITY
Defining Government Debt and Income
Estimating Government Debt
Key Trends: Government Debt, Income & Fragility
- Trend #1: Secular Trends and the Rise in Government
Debt
- Subcontracting Government Services
Privatizing Government Production Assets and Services
Shifting Debt: From Corporations to Government to Households
- Trend #2: Business Cycles and Short Term Government
Debt
- Government Debt from Central Bank Bailouts
Government Debt from Government Bank Bailouts
Government Debt from Special Agency Bailouts
Government Debt from Non-Financial Corporate Bailouts
Government Debt from Transfers and Subsidies to Households
- Trend #3: Government Income & Government Debt
- Secular Corporate Tax Reduction
Cyclical Corporate Tax Reduction
Investor Incomes Tax Reduction
Addendum: Corporate Cash Piles and Distributions
- Government Income and Failing Economic Recovery
- Trend #4: Neoliberalism Solutions to Government Debt: the ‘Twin Deficits’
- US Twin Deficits
The Eurozone’s Failed ‘Twin Deficits’ Strategy
PART III: THE FAILED CONCEPTUAL FRAMEWORK OF
CONTEMPORARY ECONOMIC ANALYSIS
16. HYBRID KEYNESIANS & RETRO-CLASSICALISTS
Conceptual Limits of Classical Economics
Postscript on Marx’s Economics
The Neoclassical Detour: 1870s to 1920s
Keynes’ Original Contributions
The Limitations of Keynes
Austrian Credit Cycles
The Hybrid-Keynesians
The Retro-Classicalists
17. MECHANICAL MARXISM
Critiquing the Propositions of Mechanical Marxist and
Falling Rate of Profit (FROP)
FROP Explains Short Run Business Cycles
Negative Productivity, Supply Side, and Collapsing
Long Run into Short Run
Only Productive Labor in Goods Production Creates
Surplus and Profits
Only Primary Exploitation of Productive Labor
Determines Changes in Profits
Redefining Profits to Fit the Theory
Profits Determine Real Asset Investment
Real Investment Drives Financial Investment
Financial Assets are ‘Fictitious’ Capital & Independent
of Real Investment & Cycles
Financial Asset Prices Are Not Responsible for
Economic Instability
Banks Are Intermediaries Redistributing Profits as Credit
Money, Credit and Debt
Summary
A Note on Marx on Finance in Vol. 3 of Capital
18. THE CONTRIBUTIONS & LIMITS OF MINSKY’S ‘FINANCIAL INSTABILITY
HYPOTHESIS’
Marx and Keynes Were Before Their Time
Minsky on Financial Instability
Minsky’s Contributions
The Limits of Minskyan Analysis
The Missing Dichotomy of Investment
The Burden of Kalecki’s Theory of Profits
Two- vs. Three-Price Theory
Flow vs. Income Analysis
Fragility’s Undeveloped 3rd Key Variable
Government as Solution vs. Source of Fragility
Dynamic & Systemic v. Financial Fragility
Transmission Mechanisms
Institutional Framework
Origins of Debt
Money v. Inside Credit
Business Cycles & Phases of Profits-Debt
PART IV: A THEORY OF SYSTEMIC FRAGILITY
19. A THEORY OF SYSTEMIC FRAGILITY
The Historical Context
Some Queries from History
Excess Liquidity at the Root of Debt Accumulation
Money Liquidity
Inside Credit Liquidity
From Excess Liquidity to Excess Debt
Debt and the Shift to Financial Asset Investing
Financial Asset v. Real Asset
Financial Asset Investing Shift
The New ‘Spread’: Financial v. Real Investment
From Stagflation to ‘Definflation’
The Irrelevant ‘Money Causes Inflation’ Debate
Liquidity As Brake on Real Growth
Restructuring Financial and Labor Markets
Financial Market Structural Change
Labor Market Structural Change
Structural Change and Fragility
Fiscal-Monetary Policy: From Stabilizing to Destabilizing
What Can Be Done
A Brief Recapitulation of Key Trends & Systemic Fragility
Measuring the Three Forms of Systemic Fragility
Fragility Feedback Effects
Transmission Mechanisms of Systemic Fragility
Price Systems as TXM
Government Policy as TXM
APPENDIX
Preliminary Equations for a Theory of Systemic Fragility
Dr. Jack Rasmus is the author of several
books on the USA and global economy,
including Epic Recession: Prelude to
Global Depression, 2010, Obama’s
Economy, 2012, and An Alternative
Program for Economic Recovery, 2012.
He hosts the weekly New York radio show,
Alternative Visions, on the Progressive
Radio network; is shadow Federal
Reserve Bank chair of the ‘Green Shadow
Cabinet’ and economic advisor to the USA
Green Party’s presidential candidate, Jill
Stein. He writes bi-weekly for Latin
America’s teleSUR TV, for Z magazine,
Znet, and other print & electronic
publications. Dr. Rasmus currently
teaches economics and politics at St.
Marys College in California.
books on the USA and global economy,
including Epic Recession: Prelude to
Global Depression, 2010, Obama’s
Economy, 2012, and An Alternative
Program for Economic Recovery, 2012.
He hosts the weekly New York radio show,
Alternative Visions, on the Progressive
Radio network; is shadow Federal
Reserve Bank chair of the ‘Green Shadow
Cabinet’ and economic advisor to the USA
Green Party’s presidential candidate, Jill
Stein. He writes bi-weekly for Latin
America’s teleSUR TV, for Z magazine,
Znet, and other print & electronic
publications. Dr. Rasmus currently
teaches economics and politics at St.
Marys College in California.
Fake recovery, failing fix-its: going nowhere faster
FROM REVIEWS OF EARLIER WORKS:
Obama’s Economy: Recovery for the Few
“Rasmus, a veteran economist, offers an unremittingly bleak assessment of the Obama administration’s
failure to promote a strong and broad-based recovery from the Great Recession of 2007-09. Written in
late 2011, his gloomy predictions about the limited nature of jobs growth have been fully borne out.”
Review of Books, London School of Economics & Political Science
Epic Recession: Prelude to Global Depression
“Jack Rasmus’s book is not just another chronological account of the current economic crisis or a
simplistic denunciation of financial ‘animal spirits’. Nor does it replicate superficial discourses of business
analysts and the financial press, which put ali the blame for the crisis on abusive bank practices and the
violation of market mechanisms. Instead, in a counterpoint to neoliberal discourse and financial jargon,
Rasmus’s book offers readers an illuminating and developed theoretical framework that adds to our
understanding of specific contours of the current crisis, and its difference from earlier crisis experiences.”
Capital & Class, Vol. 36, No. 2 , June 2012
Obama’s Economy: Recovery for the Few
“Rasmus, a veteran economist, offers an unremittingly bleak assessment of the Obama administration’s
failure to promote a strong and broad-based recovery from the Great Recession of 2007-09. Written in
late 2011, his gloomy predictions about the limited nature of jobs growth have been fully borne out.”
Review of Books, London School of Economics & Political Science
Epic Recession: Prelude to Global Depression
“Jack Rasmus’s book is not just another chronological account of the current economic crisis or a
simplistic denunciation of financial ‘animal spirits’. Nor does it replicate superficial discourses of business
analysts and the financial press, which put ali the blame for the crisis on abusive bank practices and the
violation of market mechanisms. Instead, in a counterpoint to neoliberal discourse and financial jargon,
Rasmus’s book offers readers an illuminating and developed theoretical framework that adds to our
understanding of specific contours of the current crisis, and its difference from earlier crisis experiences.”
Capital & Class, Vol. 36, No. 2 , June 2012
REVIEWS
This is a great book and the substantial effort it takes to read it is well worth it. It is both a compelling
economic history and a call for change.
For decades, the neo cons have used every possible economic club to beat the lower 90%: low growth,
no growth; stagnating incomes; busted unions; no benefits, no pensions; cash starved public schools,
cities, counties, and states; shipping all the real jobs overseas--what remains here are part time,
contingent, low paid service jobs. The young are saddled with a trillion dollars of student loans which won’t
be paid off until old age, if then. Budget busting deficit spending to fund wars and destroy social security
and medicare and force austerity. Ruthless regressive taxation and an upside down economy that shoots
all new income growth straight up into the pockets of the top 5%.
When the global economy collapsed in 2007 through 2009, Bernake and other bankers “helicoptered”
trillions of free dollars into the banks and other major corporations but this monetary policy has gone
nowhere to revive the real economy. The economic destruction of the lower 90% has set up negative
feedbacks and what is called monetary policy [pumping trillions into banks and other corporate entities]
doesn’t provide real jobs or income growth. Rasmus calls these negative feedback systems systemic
fragility. But what monetary policy has provided is trillions of dollars of free money for the banks and
others to speculate in an obscene array of financial assets. Hence Bernake and other banlers have never
stopped pumping more and more trillions into the global economy and the result is what Rasmus calls a
“money parade” of a hundred trillion dollars that is turning casino capitalism into a world wide web of
defacto Ponzi schemes.
Rasmus does describe the necessary tools to bring back a real economy of real jobs and real income
growth for all but the lower 90% are so beaten, atomized, and misled that a global explosion on the level
of the 1930's Great Depression is almost inevitable.
David R. Baker, Business Reporter, San Francisco Chronicle, reviewed on amazon.com
a thought-provoking contribution to an understanding of the fragility of modern capitalism. It’s a ‘must
read’ in a year that is generating a whole new range of radical and Marxist books on capitalism and its
laws of motion...
Michael Roberts blog
This is a great book and the substantial effort it takes to read it is well worth it. It is both a compelling
economic history and a call for change.
For decades, the neo cons have used every possible economic club to beat the lower 90%: low growth,
no growth; stagnating incomes; busted unions; no benefits, no pensions; cash starved public schools,
cities, counties, and states; shipping all the real jobs overseas--what remains here are part time,
contingent, low paid service jobs. The young are saddled with a trillion dollars of student loans which won’t
be paid off until old age, if then. Budget busting deficit spending to fund wars and destroy social security
and medicare and force austerity. Ruthless regressive taxation and an upside down economy that shoots
all new income growth straight up into the pockets of the top 5%.
When the global economy collapsed in 2007 through 2009, Bernake and other bankers “helicoptered”
trillions of free dollars into the banks and other major corporations but this monetary policy has gone
nowhere to revive the real economy. The economic destruction of the lower 90% has set up negative
feedbacks and what is called monetary policy [pumping trillions into banks and other corporate entities]
doesn’t provide real jobs or income growth. Rasmus calls these negative feedback systems systemic
fragility. But what monetary policy has provided is trillions of dollars of free money for the banks and
others to speculate in an obscene array of financial assets. Hence Bernake and other banlers have never
stopped pumping more and more trillions into the global economy and the result is what Rasmus calls a
“money parade” of a hundred trillion dollars that is turning casino capitalism into a world wide web of
defacto Ponzi schemes.
Rasmus does describe the necessary tools to bring back a real economy of real jobs and real income
growth for all but the lower 90% are so beaten, atomized, and misled that a global explosion on the level
of the 1930's Great Depression is almost inevitable.
David R. Baker, Business Reporter, San Francisco Chronicle, reviewed on amazon.com
a thought-provoking contribution to an understanding of the fragility of modern capitalism. It’s a ‘must
read’ in a year that is generating a whole new range of radical and Marxist books on capitalism and its
laws of motion...
Michael Roberts blog
| INTERVIEWS |
| LISTEN |
| CHINESE EDITION FORTHCOMING FROM HUAXIA PUBLISHING HOUSE |