Explaining the recession

41 comments on “Explaining the recession ”

• Comments are now closed

1. lprent 1

   6 March 2009 at 5:30 pm

   Excellent video. Obviously targeted at union delegates. Should be compulsory for some poorly educated employers as well.
2. Wharfie 2

   6 March 2009 at 7:18 pm

   As this place is a union funded blog [deleted]

   [lprent: The biggest nut around is yourself – please read the policy and the about. It is funded by me, and not by some pathetic wingnut pretending to be a wharfie ]
3. illuminatedtiger 3

   6 March 2009 at 7:43 pm

   A union funded blog? Will someone ban this crackpot?
4. Wharfie 4

   6 March 2009 at 7:46 pm

   You ban me then I call in my mates at the Teamsters Union to sort you out. Don’t piss me off boyo.

   [lprent: ‘Teamsters’ ? Dad, have you been watching too many gangster movies? Besides aren’t you banned? ]
5. Ray 5

   6 March 2009 at 7:55 pm

   Gimme a break. This is just propaganda from a right wing union to talk workers into accepting they’ll be paying for this crisis. The union bureaucracy featured in this video are no friend of the workers. Why should workers pay for a crisis they didnt make.
   • Daveo 5.1

     8 March 2009 at 8:03 pm

     I’ve got three questions for you Ray.

     – What makes you say the EPMU is a right-wing union other than the talking points you’ve picked up from the sectarians in Unite?

     – What possible motivation would the EPMU have in talking workers into accepting they’ll be paying for this crisis?

     – With reference to the above, have you even watched this video?

     I’d be interested in your responses, that is if you’re honest enough to back up your statements with facts.
6. Rosa 6

   6 March 2009 at 8:24 pm

   Hey .. Ray and Wharfie,

   have a look at this ..

   http://jameshowardkunstler.typepad.com/clusterfuck_nation/2009/03/what-next.html
7. rave 7

   6 March 2009 at 8:29 pm

   Good point Ray. If Little and Conway believed their own propaganda that capitalism is sweet and its just the financiers that ran amok, they would be saying let the financial speculators pay for the crisis, we are not paying for any of it.
   They would condemn the Labour government for signing up to a deposit guarantee that bails out shonky finance ripoff merchants.
   That would be tough for Little who is now Labour Party Pres.
   They would attack Key as a financier whose former failed employer Merryl Lynch has been bought up by BOA which itself has to bailed out. Instead of guaranteeing the toxic assets (greedy bets) of the financiers they would nationalise their good assets and use them to create jobs for all who get sacked.
   But of course if they were to do that the financiers would be revealed to be the same people that own all the big corporations and run the state that is busy taking our taxes and future labour as bailout packages. To upset the financiers would be to rock the whole capitalist shebang.
   The EPMU half-assed apologies for the system and not an explanation of the crisis but a joke cover up of its real causes in declining profitability that is built into the system. It proves that they are up the system and their only use to the bosses is to keep workers quiet.
   Time to wake up.
   • Tim Ellis 7.1

     7 March 2009 at 3:09 pm

     Rave, I disagree with pretty much every point you’ve made in that comment, but I congratulate you for making your argument without resorting to tribal partisanship.
   • Snail 7.2

     7 March 2009 at 4:41 pm

     I think I follow the feeling in your comment, Rave, but I’d have to say it is a little loose re assets and their merits/values etc..

     As I’ve said here before just as labor produces goods & services then the role of capitalism is to produce capital.

     What has happened is that capitalism and capitalistic resources have not (in the main) produced capital—they have created credit and taken fees/charges from its very high leverage. Repeat: credit is NOT capital.

     Correct, those “toxic assets” are problematic. And because they do not value out in ‘mark-to-market’ — hey I didna invent this market makeover stuff 😉 — or accepted modern business means. Hence, putting the show back on the road requires either they are bought up (independently by govt..?) – that is to say another funding source, or they are ‘bought’ over time by perpetrators.

     We both know which choice has been made. And yes, for better or for worse.
     You might care too ponder what kind of banking minds aligned themselves to ‘off-balance sheet’ accounting. Does it make them incompetent or criminal. Or both.
     And, praise be, how would punishment of offenders with nationalization make our world better..?
8. mickysavage 8

   6 March 2009 at 9:04 pm

   The trouble with blogs is that the nutters can move in and make comments that can kill good discussions. Wharfie and Ray are obviously trying to do this. Are they the same person?

   These films are really good. It would help us all if we could concentrate on the messages. For me the messages are:

   1. These are extraordinary times.

   2. Workers are not to blame. Wall Street and the Bankers who leveraged to the extreme equity in ordinary homes should be blamed.

   3. Consumption is going down. It is not a bad thing. Climate change and global warming and environmental devastation ought to require us to consume less. One less plasma TV will mean less transportation and money but will also mean that the current economic system will suffer.

   4. Why should workers suffer? They do not share in the profits earned by their employers when times are good but they are expected to suffer when times are bad through no fault of theirs.

   5. A 9 day working fortnight sounds great. Most workers cannot and should not suffer a 10% wage cut, some employers may fold if they have to pay for the extra day. The logical solution is for the proposed tax cuts to be cancelled and for central government to pay for the 10th day. I am holding my breath. It will hurt the wealthy but they are the most able to handle these current circumstances.

   Maybe Karl Marx was right?

   [lprent: Wharfie is d4j. Ray prefers to not use his usual psuedonym.]
   • Ray 8.1

     6 March 2009 at 11:50 pm

     You can believe all the Andrew Little rhetoric/garbage/tokenism all you like, but where was the EMPU when Air New Zealand was shafting its engineers, oh thats right it was helping Rob Fyfe force them to take a pay cut. Or where was the EMPU when Fisher & Paykel shut up shop? The EMPU/Andrew Little/Labour are no friend of workers.

     You’re right mickey, workers should not pay for this crisis.
     • Daveo 8.1.1

       8 March 2009 at 7:59 pm

       You appear to be under the misapprehension that a union’s national secretary is like a superhero who can ‘save’ workers from any calamity. Anyone who’s actually organised knows that’s not true. You can only take workers as far as they’re willing to go and to the extent that is possible under the current system where bosses own the means of production and have ultimate managerial prerogative.

       You sound like another of those ‘glorious defeat’ idiots Irishbill wrote about the other day.
9. mike 9

   6 March 2009 at 9:42 pm

   Mr little says “a lot of employers are getting workers to panic”???. Wake up idiot – now is not time to come across all militant and thuggish, companies do not have the usual fat to accomodate unions demands. This guy is the new Labour president – I think you were better off with the fat snoop.
   • lprent 9.1

     7 March 2009 at 9:29 am

     Employers suddenly bleat during recessions and depressions. All of a sudden want the state to bail them out. Look at the US car companies.

     I’m just waiting for the property developers to do it here..
10. Ianmac 10

    6 March 2009 at 10:05 pm

    What a great video. The collective message is that we are all in for tough times. And Andrew Little was a small part of this. Gareth Morgan is certainly not a Left winger and I understood
    his message straight and clear. It should not be assumed that the “workers” should be the first to pay. (Although the USA tends to use the poor and disadvantaged as canon fodder.)
    It would be interesting to get a critque from Rod Oram.
11. rave 11

    6 March 2009 at 10:06 pm

    Wake up Mike the world has moved on. The market has failed.
    Employers who can’t keep workers in jobs and pay them decently should go broke. Instead workers are expected to cut their pay and mortgage their future pay and taxes to bail out corrupt banks and failing icons like F&P.

    The market has failed. Its not the best way to allocate scarce resources, unless its into the pockets of the rich. Obama is stuck in the old way of propping up the market in the name of a ‘new deal
    see http://www.globalresearch.ca/index.php?context=va&aid=12517
    According to Chossudovsky he’s shifting public spending from the poor to the rich even more than Bush. A massive con job.

    The market has failed and needs to be replaced by social ownership to meet the needs of the people, for the people by the people.

    If workers are expected to take pay cuts and bail out bosses, then they should demand to decide who gets bailed out and that it will only happen if this public investment becomes public ownership.
    This means that scarce resources would become publicly owned and democratically planned.

    The CTU should be saying that to defend jobs we have to take the most important industries and services into public ownership and put them under the control of working people not corrupt banksters raking in multimillion bonuses sitting on boards who are only interested in maximising profits.
12. Socialist Aotearoa 12

    6 March 2009 at 10:15 pm

    Socialists say “We WON’T pay for their crisis”. We didn’t cause it, and where workers are threatened with redundancies, we point to the examples of factory occupations in Chicago, Waterford and Buenos Aires as an alternative to capitalist greed and mass unemployment.

    The new film from the EPMU differs in tone. Whilst it puts forward some valuable economic information and gives rank and file workers a voice to raise their fears, it also sees the Union’s role as softening the effects of the Depression in partnership with employers, rather than fighting them militantly for every job. SA presents the film and welcomes readers to post their take on the EPMU’s line.

    Crunch Time. For workers, for bosses and for union bureaucrats.

    (an alternative film on how to fight redundancies here)
    http://socialistaotearoa.blogspot.com/2009/03/crunch-time-film-on-crisis-by-epmu.html
    • mike 12.1

      6 March 2009 at 10:45 pm

      Jesus that shite almost makes Al Gore’s efforts believable – back to china with you my friend
13. Ianmac 13

    6 March 2009 at 10:21 pm

    I have e-mailed Rod Oram and invited his comment on the video, as a man whose opinion/assessment is respected. We will see.
14. Quoth the Raven 14

    6 March 2009 at 10:27 pm

    now is not time to come across all militant

    Grow up Mike. We haven’t had militant for decades. It’s 123 years since Haymarket. Be careful what you wish for.
15. Santi 15

    7 March 2009 at 7:17 am

    Is this the same Andrew Little, card-carrying member of the Labour Party and supreme double dipper, who was praised….not! by Chris Trotter in his most recent column?

    Cracks in the ricketty walls of the socialist mud house appear to be widening. All under the eagle eye of the supreme leader Fill Goff.

    Ah, the joys of being opposition.

    [lprent: You are a obnoxious little illiterate. The presidential position is either unpaid or pays bugger all. Now what about that National MP in Mangakiekie who is double dipping on both my taxes and my rates. From what I’ve heard he doesn’t do much around the council these days.]
16. Concerned of Tawa 16

    7 March 2009 at 8:44 am

    “Ah, the joys of being opposition.”

    Latest Roy Morgan Poll: National 56% Labour 26%

    You call that opposition?
    
    [lprent: I seem to remember the Nats getting 22% in an actual poll (election) in 2002 – do you call that being an opposition?. Why don’t you jerk-off elsewhere if all you can raise are troll lines.

    This appears to be a troll campaign. I’m going to delete comments of this form that have no other content]
17. Concerned of Tawa 17

    7 March 2009 at 9:06 am

    “I seem to remember the Nats getting 22% in an actual poll (election) in 2002”

    Oh give Phil Goff time. I’m sure 22% is achievable.

    Gee the mood round here needs lifting

    [lprent: it was 20.9% for National in the 2002 election. After that they dropped. It wasn’t until Brash stirred up the racial bigots in the Owera I screech (a proud moment for the right) that they started to rise in the polls.

    We tend to get annoyed when troll wankers start jerking off their poorer qualities around here. If you cannot argue a point then don’t come here. Seeing your ‘point’ mindlessly scattered by multiple people around multiple posts without actual brainwork being involved gets me seriously pissed off, and I act accordingly. ]
18. the sprout 18

    7 March 2009 at 10:01 am

    excellent work, well done whoever’s responsible for it.

    if only our msm could be trusted to produce such informative and honest commentary.

    come to think of it – if only NZers were encouraged to understand this before the election. if only our msm weren’t so keen to downplay the gravity of the situation during the election, so as not to discourage voters from speculating on sketchy long-shot promises.
    • higherstandard 18.1

      7 March 2009 at 11:13 am

      So it’s the MSM’s fault that Labour lost the election now is it ?
19. Ianmac 19

    7 March 2009 at 10:18 am

    Iprent: There are some “opposing views” which are thought provoking. The abusive ones like from Tawa (gives Tawa a bad name) are useless. I support your reactions! Rid us of the buggers.
20. RedLogix 20

    7 March 2009 at 10:26 am

    Excellent video’s.

    This is NOT a recession. It is a major debt-deflationary crisis caused by grossly irresponsible or fraudulent lending by the global finance system. Until the massive excess debt bubble is unwound or reset, credit will remain hard to find, and the economy will continue to unravel. No matter how sound your business or financial history, banks find it almost impossible to lend when assets are still FALLING in value, which in turn causes the assets to fall further in value.

    Unemployment will peak around 20-30% and will remain stubbornly high for very long time, maybe 10 -20 years (the Japanese have remain mired in this same trap almost 20 years so I can point to precendent). Many of the rest of us will be underemployed, and our take home pays will fall. The two reasons why this crisis has yet to hit us hard here in New Zealand are simple.

    One until very recently our employment capacity was so highly extended that in the last few months much of the fall has been masked by cuts in overtime, 4 day weeks, dropping secondary jobs and using up accumulated annual leave. But as the crisis deepens in the next few weeks, the job loss snowball (665 in the last week alone) will become obvious to all.

    The second reason is of course, that our banks are still solvent and thanks to Michael Cullen our public sector debt is extremely low, which will give us a little breathing space and a temporary reprieve … but this National govt has no ideas and no ability to respond.
    • higherstandard 20.1

      7 March 2009 at 10:54 am

      “thanks to Michael Cullen our public sector debt is extremely low, which will give us a little breathing space and a temporary reprieve but this National govt has no ideas and no ability to respond.”

      Yes he did well to retire as much debt as he did – this good work should however be balanced against the poor decisions (in hindsight) in relation to NZ rail, AIA and Air NZ.
      • Ianmac 20.1.1

        7 March 2009 at 11:27 am

        In todays Herald John Roughan explains why he thinks there are no problems. Everything will be dandy. Funny how different are the assessments. For me the above video is chillingly credible as is Redlogix logic. Roughan’s:
        http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10560366
        • Travellerev 20.1.1.1

          7 March 2009 at 12:35 pm

          F*&king H^ll, I’d really like to know what colour the sky is on his planet.
21. rave 21

    7 March 2009 at 1:21 pm

    Explaining what exactly?

    The social democratics of various hues, pink, green, beige, etc need to study their Marx so they understand what is happening to them before it is too late.

    For the cruisers hung up on the evils of neoliberalism there is David Harvey’s brief history of neo-liberalism
    

    For the stayers who always worried that globalisation might be more than meets the eye there is his lecture series on globalisation
    

    For the high performance types who passed High School algebra there is the most recent series on Marx’s Capital starting here
    http://davidharvey.org/2008/06/marxs-capital-class-01/

    Or there is the Brendan Cooney’s cool low key webcam series starting with http://www.youtube.com/watch?v=yBciA1y-2mQ
    • RedLogix 21.1

      7 March 2009 at 2:24 pm

      Rave,

      For months I couldn’t make up my mind if we were going to get deflation due to unwinding excess debt, or inflation due to Central Banks printing money in response to the crisis. Turns out that the credit grinch bubble popper will trump the RB printing pump everytime. It’s like trying to keep a hot-air balloon aloft by turning up the gas heater, when the top of the canopy has been ripped in half.

      I highly, highly recommend this article. Steven Keen predicted all this on sound theoretical grounds years ago.

      The article even starts with a quote from Charlie (and has his picture)… so there must be something in it for you to like.
      • rave 21.1.1

        7 March 2009 at 5:45 pm

        Redlogix
        Keen’s paper is quite readable and explains the neo-Keynesian position well. Yet what’s missing is the other quote from Marx which you didnt see along the lines of how come capitalism allows a bunch of parasites to expand credit many times beyond the money supply, the capacity of the state to print money, and the underlying sum of the value of commodities produced by a given country, so while the Chinese and Japanese buy a large chunk of the debt, it is only official debt (fiat credit), not the crazy bank credit Keen talks about, and cannot prevent the crunch happening.

        Sure Marx hated the finance parasites, but he explained why they existed. Not as aberrations to the normal equilibrium of capitalism but the product of the internal contradictions of capitalism. Credit is expanded (and not regulated because the state is run by those with an interest in credit expansion) because the productive circuit is incapable of taking up the surplus capital since it cannot realise a profit on money invested in production.

        This, when the rate of exploitation (roughly the ratio of profits to wages) despite neo-liberalism, globalisation, privatisation of state assets, increasing productivity (rate of exploitation), cannot be increased fast enough to return a profit over total investment. The result is a crisis of overproduction of money capital and commodities. Solution is to devalue all commodities including labour-power until investment in the productive circuit does produce a profit.

        Therefore according to this logic, the finance sector becomes detached from the productive sector at a specific point when profits fall to a certain level, so that the surplus capital then spins off into excessive credit creation to attempt to realise profits in the sphere of exchange rather than production. The credit bubble then produces the credit crunch as the fictitious value of those assets collapses back towards their actual price of production. So its not a monetary crisis or even a credit crisis in reality but a capitalist crisis because the credit crunch is a symptom of the failure to extract enough value to valorise the capital invested in the productive circuit.

        Such a crisis is always deflationary because the values of wages and other commodities, along with all the fictitious capital speculating in asset value, collapse downwards to reach that point where the surviving big banks (guess which) buy up the surviving corporations (guess which) and start re-investing in cheap labour and cut price productive assets, new technology comes on line, and away we go on another merry go round.

        And this leaves out the whole impact of crisis and restructuring on those who pay for it – the working class. That’s why a third quote from Marx is useful. Somewhere he said that capitalism never falls down by itself. It can suffer massive crises, prove that the market fails, but if it has the capacity to fool most workers or repress them then it will stagger on. Only the activity of a politically conscious working class can end capitalism. Capital is not self-equilibrating, or ultimately self-destructive, but it does produce its own gravediggers.

        I’ve read Keen why don’t you have a look at Brendan Cooney’s youtube vids I cite above, they are great fun. Take a look at the political economy of Superman, and the Matrix.
        • RedLogix 21.1.1.1

          7 March 2009 at 5:53 pm

          rave,

          Given what is happening right before our eyes, your line of reasoning in your very good post above, is dammed hard to argue with.

          I’ve read Keen why don’t you have a look at Brendan Cooney’s youtube vids I cite above, they are great fun.

          Yes I intend to, but later when I’m using a proper ADSL connection, and not this oversold crap 3G Nodafone connection.
        • Snail 21.1.1.2

          8 March 2009 at 3:19 pm

          Interesting..As to the following:—
          So its not a monetary crisis or even a credit crisis in reality but a capitalist crisis because the credit crunch is a symptom of the failure to extract enough value to valorise the capital invested in the productive circuit.

          I am not sure what you mean with that term “valorise”, but I have a question pertaining to constructive solutions.. That is, to what extent would the suggested undervaluing of capitalism’s productive sector be capable of implementing revaluation/s in taking up part or all of the so-called credit surpluses.

          What tools – financial, wage, salary, compensation – would be appropriate in so doing. Given how clearly the worker/laborer be no worse off..

          Look forward to your views on this..
22. Leroy 22

    7 March 2009 at 5:59 pm

    Armchair radicals like Trotter and “Ray” can attack the EPMU and Andrew Little all they like, they don’t have to make decisions in the real world. It’s easy to criticise from a position of ignorance and irrelevance.

    The fact is the EPMU gets the highest pay rises of any union and takes the lead in the whole movement’s campaigns to defend workers’ rights. If you want to accuse them of selling out to the boss class then you should at least get some facts to support your argument rather than trotting out cliches from two decades ago.
23. Ianmac 23

    7 March 2009 at 8:48 pm

    Redlogix and Rave: I am always impressed from an Economically uneducated point of view at the competence with which you put your thinkings.
    Does the point about capital outstipping production, (“so that the surplus capital then spins off into excessive credit creation to attempt to realise profits in the sphere of exchange rather than production.”) lead to those who blame the workers for not being productive enough? Hence the old arguments about how we/they have to be more productive in order to increase the wages in order to match Australia. All the workers/employers fault of course.
24. antisocialisttosspots 24

    8 March 2009 at 9:34 am

    [deleted]

    [lprent: GL – you are currently banned. Putting you into the anti-spam as you don’t offer anything and appear to ignore warnings]
25. Paul Williams 25

    8 March 2009 at 11:04 pm

    Easton and Morgan, two of the leading econmists/commentators in New Zealand offering constructive advice on the way forward. This is pro-worker without being anti-employer and yet another example of the positive approach adopted by Little/EMPU. As awkward as this video is, it’s an important insight into the strategy the EPMU are considering for the next few years: one that’ll ensure growth on the otherside is sustainable.

    Redlogix, thanks for your email – I’m sorry I’ve not replied, I’ve been a bit distracted. I apreciate your response however.

Links to post

1. The Take at The Standard: posted on 8 March 2009 at 9:21 am

• Comments are now closed

• Log in
• Donate
• Contribute post

• Articles RSS