At 10/2/01, you wrote:
>CONSUMER CONFIDENCE from ft forum. when will us bounce back?
>
>Thanks for the respect Mr Martini- I reciprocate- The good thing about this
>forum is you are on the record- so first from the 23 of March 2001.
>‘The point to note is that lay offs are in both Hi tech and more traditional
>manufacturing. The application of ‘new economy’ methods to the old economy
>in the next drive for profitability will shake out labour. This will add to
>the reserve army of unemployed further depressing consumption. This combined
>with the paralysis in Japan and the ‘non markets’ of Russia, Eastern Europe
>and Africa, forces the US to turn to interest rate reduction to try and
>stimulate consumption and prop up the financial markets. However the
>flexible workforce demanded by capital is also the insecure workforce- an
>interest rate cut does not change that and it will not have any dramatic
>effect on consumption, nor will it stimulate investment, since current
>investment returns are problematic. Amazon provided an early indication of
>the limits of any ‘new economy’ transformation; human labour. Amazon could
>take a million orders in a day but it still requires low wage ‘operatives’
>to physically deliver it ­ an impossible task.
>Most economists use psychology to explain both the bubble and the crash.
>This ignores the key question and it is an economic one. Why did profits
>start to slow in the first place? It was not the unions, not inflation and
>not political concerns, so what caused it? This is not a psychological
>phenomena it is real’
>Brookmyre 23.3.01 post on this forum.
>CONSUMER CONFIDENCE is simply a flat tautology trundled out every time
>economic growth falters. Mainstream economic analysis is not analysis at
>all- increased consumer spending must be realized as must decreased consumer
>spending. The 1929 crash did not come about as a result of the collapse of
>confidence- it came about because the banks did not have the money. The
>current recession has for these economists no origin ­it is discussed by
>using the analogy of the weather! The economic climate and mass psychology!
>As soon as recession starts ­ economics becomes an ‘inexact art.’ All the
>econometrics management and business science graduates fall silent. No
>explanation exists in these ‘schools of thought’ of periodic crises in
>capitalism. Already excluded are the unemployed, those on welfare or
>‘workfare.’ As more people loose their jobs they fall into this economic
>twilight zone. It the ideological function of economists to simply ignore
>this and for example the 500 million people in Africa alone who ‘exist’ on
>less than a dollar a day.
>Wealth creation’ and the ‘cult of the entrepreneur’ have been raised to an
>unprecedented height of nonsense in human thought-and sadly about to
>implemented in Scottish primary schools. ‘Business Science’ is akin to the
>flat world religion of the Feudal epoch. [Just how far this twaddle
>penetrates the consciousness of the bourgeois is startling. e.g. Powell
>talking about terrorist’s planning cycles and Bush wanting to clean the
>money of the world and cut off funds to terrorists ­ CBS recently had hacks
>discussing the- wait for it-terrorist business! Black money ! was coined by
>the BBC on the Ist. Of October.]
>Textbook theory cannot explain periodic crisis in value--what is going on
>right now- this is a problem for the economists because the current crisis
>came about on the basis of ‘stable’ money, the lack of which was the alleged
>cause of the last crisis!
>Going deeper part of the reason is, again, ideological- ‘a fair days pay for
>a fair days work’ but all workers cannot buy back all they produce since it
>would leave no profit and profit is what drives the whole system. Profit can
>only be expressed in money and money reduces labour- and that is human
>labour, to a commodity itself- hire and fire. An individual capital wants
>the most profit and therefore seeks to reduce the cost of labour at the same
>time he wants all other workers to buy, buy, buy, but they are subject to
>the same laws from the individual capital they work for.
>Around August last year share prices began to fall on the back of slowing
>profit growth- the response was to sack labour. Sony pioneered this
>financial heroism 1998 by sacking 20 000 workers- Good news for Sony
>investors was the Business Week headline at the time.
>Advanced capital is able to produce a massive amount of commodities using
>less and less labour. The Hi Tech market was a classic. The application of
>computers and the internet led to an investment frenzy-every capital saw
>greater output and profit with less and less labour but developed nations
>already sit with a reserve army of unemployed and with more redundant labour
>as a result of falling average rate of profit the capitalist makes the
>situation worse- govt spending can shore this up for a while but without
>real profit coming into the system the govt spending starts to undermine the
>holy of holies ­Money.
>Alan Brookmyre