True, America and China, unlike Europe, have pumped trillions in the economy to support demand. Their huge fiscal stimulus seems to be paying off. Problem is toxic assets still plague the US and EU financial systems, and a huge credit card default crisis lies in store, when Bank of America and others will be forced to acknowledge the extent of their losses  on finanical assets in their balance sheets. If consumer credit goes bust, the recovery just won’t happen, unless purchasing power is redistributed — by tax or strike — toward employees and lower social strata in America, Europe, Asia, and a new international monetary system, based on stocks of primary goods and on fixed, but adjustable, exchange rates, comes into being. Kaldor proposed it to the UN thirty years ago. It would provide a firmer anchor for the global economy than current international reserve currencies, and promote North-South economic realignment, since it would regulate the terms of trade between manufactured goods and agricultural and mineral commodities.

Don’t believe the hype: the recovery is NOT around the corner. It remains to be seen what will happen when, especially in Europe, the crisis worsens in late 2009 and early 2010: Anarchy in the EU?

Let’s guarantee housing to each other. This means not only “No” to evictions, but the reoccupation of houses that have
been abandoned, the distribution or occupation of the empty housingstock that lies all around us; the collectively decided self-reduction of rent of the kind that was carried out in Italy in the 1970s; the creation
of new housing that would be organized collectively and built ecologically. Short of that we should build our version of “hobo jungles” on the steps of the White House, open soup kitchens there, show the world our empty pockets, our wounds, instead of agonizing in private.

For instance: Let our struggle over housing be a struggle for the reorganization of work reproductive of daily life on a collective
basis. Enough of spending time in our solitary cages with trips to the mall as the climax of our sociality. It is time for us to join with
those who are reviving our tradition of collective, cooperative living. This “year-zero” of reproduction that the capitalist crisis cre-
ates, as evinced by the mushrooming of tent cities from California to North Carolina, is a good time to start.

However, in their recounting the reasons for the current crises, they count the struggles of different strata of the working class now integrated into the credit system.  This transformation they correctly read as the transfer of the cost of social reproduction from one class to another with the concurrent creation of investment opportunities.  For example, you could look at average household debt load in a given state to see just how much a given section of the working class has taken on the chin these past 30+ years.  Then they ask if these struggles merit their inclusion and respond with there are struggles over repayment and bankruptcy, we should not discount and the larger history of communities against discriminatory credit practices.  All of these are given as causes for the crises. We here at the Great Recession, agree that all of these struggles will shape the form of the responses to the crises but not mean they are responsible for it.  You can look at the changes to bankruptcy law in the US and see not only has the creditor class been calling the tune, but they have been picking the instruments, the musicians, everything down to the wine list.

It’s clear that the torrents of money poured in the banking systems since Lehman went bust last September haven’t halted the recession, but have so far prevented the worst, namely a generalized depression. Unlike in the early 30s, the Fed’s stance has been countercyclical  (the ECB, much less so). This is enough to mitigate nosediving, but not enough to rescue the economy from the doldrums of recession. Only Obama’s fiscal stimulus has a chance in that respect. Merkel’s (and also Sarkozy’s) stubborn insistence on not expanding deficits amid a world recession, could make the situation worse for the international economy and much worse for the eurozone.

We on the radical and reformist left must stop thinking that since neoliberalism has been proved wrong by history, this automatically translates into a revival of progressive policies of wealth redistribution and welfare expansion. It won’t happen until we have shaken off the bankrupted elites of europe. They are still dictating the terms of the game, making employees and households pay for the gargantuan errors of managers, bankers, and the politicians bribed to sing their song.

Let’s shred the Maastricht Treaty! Let’s overthrow Europe’s failed élites!

http://cityroom.blogs.nytimes.com/2009/03/16/fired-over-a-tuna-sandwich-and-fighting-back/?emc=eta1

http://www.artsblog.it/post/2749/trilogy-of-crisis-intervistando-la-crisi-unintroduzione

We, great recessionists encourage you to follow and participate in the project.

On a fairly unrelated issue, we wanna lambast that jerk of Niall Ferguson, the official historian of global finance, who, after having rescued the memory of the British Empire (while ripping off H&N’s newfound fame) from disrepute (ask Indians and Pakistanis, or Israelis and Palesitinians about the virtues of their former colonial masters) writes on financial collapse on the Financial Times as if he had predicted it all (he didn’t, of course). OK, Ferguson now thinks we’re in a Great Repression (that’s right, it ain’t a typo), which is not Sarkozy’s latest plan for policing riotous banlieues, but rather the coming home to roost of 20 and more years of financial recklessness (fine, but where were you Niall when the party was on?).

He’s also saying that a pragmatic mix of monetarist and keynesian measures is being implemented to drag us out of the slump. Trying to save Friedman’s failed legacy on the sneak? Any macro 101 student knows that if you’re in depression you need 100% Keynes in both fiscal and monetary policy. But wait, we learn from him that Bernanke is a monetarist while Paulson is a keynesian. WOT?? If money-thrower Bob is a monetarist, what about the french old man in Frankfurt? The Fed wants inflation at any cost (you hear, Trichet?). Not even Santa can do better, moneywise. But it’s true that Bernanke like all US macroeconomists revered Friedman to the point of dogma.  As Krugman notes, Lucas and other Chicago boys were boasting that the Depression was no effective demand crisis which had a keynesian solution,  but a monetary fuckup. After Friedman, that would be unrepeatable. Well, Keynes was right all along. And, if you’re keynesian, it means you’re fiscal before anything else and wanna go on a deficit spending splurge. Now, everybody knows Paulson is a goldenparachuted investment banker who wanted to spend money on his pals on Wall Street and nobody else. Obama and Summers might go keynesian all the way, we’ll see. But the bushists have just done a fucking mess. TARP has proved as corrupt as ineffective and the economy is dropping like a stone. Some pragmatism… The once overmighty financial markets and their apologists are just no longer relevant.

But when everything starts breaking really bad next year, the French aren’t comparatively that bad of a position:

• Their economy is geared for internal consumption,  they’re not going to see the same sort of the drop off they we’re going to see in Germany.
• There was no housing bubble, like Spain, the UK, Ireland…
• Because there was no housing bubble, there was no financial sleight of hand with accompanying level of rising household debt, and the packaging of said debt to be resold all over the world.
• Public Debt is only 66%+, nowhere no near the ~100% of Italy and Greece.
• And while France is the most touristed place on visit, it only clocks in at ~7% of the GDP.

All of which leaves France with a little more carrot and just as much stick.

(!new! check out this:
http://zoescope.wordpress.com/2008/12/22/comparing-usa-outlay)

Capitalism is in crisis. Neoliberalism is dead. Neoconservatism is deader.

We are in the Great Recession, the biggest slump since the Great Depression. And 2009 will see many more us unemployed and our wages slashed.

America, Europe, China, Russia, all the regions of the world are reeling from the consequences of the financial tsunami. The Zero Interest Rate is the last bastion of business-as-usual capitalism. Massive inflation will come next, as Central Banks will print money and buy bonds and assets to avoid deflation.

This situation presents ample opportunities for radicals of all stripes to put forward new forms of conflict, political organization and social relations, but the possibility of an authoritarian solution looms just as large, exploiting the fear and uncertainty of the millions who will be laid off, or live in the shadow knowing they could be next.

This blog comes from people that predicted the oncoming of a recession of historical proportions as early as 2004 and wanna share their knowledge of macroeconomics, political economy, and the riot sciences with people at large, starting from women, youth, immigrants, and including students, activists, unionists, free-thinkers, rabble-rousers. One thing: we might be lefties, libertarian marxians, pink radicals, green hacktivists or what have you, but we certainly are not dogmatic.

We wanna look at the chaotically unfolding economic, social, geopolitical reality with a critical mind which makes use of the tools of radical social theory and keynesian-kaleckian macroeconomics.

We wanna know how things happen for, to, and by movements. We wanna describe and discuss how insurgent strata affect socioeconomic reality and determine the redistribution from capital to labor, from state to multitude, from investment bankers to office temps.

So we’ll write, explain, report on the crisis and its consequences, while trying to keep it entertaining, and expect that you do the same. Let’s get the facts straight, keep the theory grounded, and start building in the cracks exposed by the Great Recession.

Nine years after, we can look back and see than none of this happened. The much-touted European miracle of a transnational polity turned out to be a mirage. The EU has been voted down in almost any open electoral contest (France, Holland, Ireland), and the neoliberal legacy that propelled Europe into Maastricht and Schengen has caused the biggest economic slump since the Great Depression. In fact, the eurocracy has been standing idle as the meltdown progresses, while national governments rushed to insure their banks from a run on them (ask the Icelanders who can’t use their credit cards any longer or indeed buy anything coming from abroad). To add worse to worst, new cold war tensions loom in its East. In short, political Europe lies in ruins, as nationalism, xenophobia, clericalism are dangerously on the rise everywhere.

Eurofederalism, once a progressive ideology commanding the allegiance of most of European élites, is definitely passé. While America is finally on the lookup with Obama’s election marking the end of the long, dark years of bushism, Europe lies in shambles. It does not have an economic or geopolitical direction, much less a social and a cultural agenda. In this confused scenario, a statist rightist like Sarkozy is looking like a giant standing amidst the rubble of laissez-faire, calling for unprecedented government intervention in the economy, altho this has splintered the traditional Franco-German core of the EU. Even a discredited leader like Brown is getting a new lease on life because of the crisis. Berlusconi instead is going to pay for the crisis dearly in political terms (and it’s not clear what
the cost of offloading the major toxic assets held by the Italian government and banks will be), as the Anomalous Wave student movement is proving as I write these lines. Their mobilization has already mobilized millions and produced two general strikes. It’s the only social force that manages to counter the cryptofascist policies and the persecution of gypsies, muslims and immigrants enacted by Berlusconi III, who presides over a government exclusively composed by fascists, xenophobes and all the sycophants on his vast payroll. Not even the clericals are in his government, although Mr B has been publicly blessed and praised while he was attending a Mass held by Papa Ratzy. The new socialist hope of Europe, Zapatero, is now paying the price for his mix of social progressivism and economic conservatism. The latter has propped up real estate prices to impossible heights and now the fall is very harsh. But there’s no question that socialist and social democrats are rediscovering their keynesian instincts and are moving to left in practically every European country. Also Merkel is being weakened by the crisis: her free-market and monetarist instincts are playing against her on the domestic side, and Putin’s aggressive stance in Georgia and elsewhere is weakening her foreign position. Unfortunately, the SPD does not seem posed for a united left approach with Die Linke and Greens that could defeat the CDU in the next elections (it would already have a majority in the Bundestag).

But events are unfolding rapidly as eurocorporations have started laying off workers and employees in large numbers, and this major fact could alter the political landscape dramatically. Right now, Europe seems to be coming apart at the seams, with an unloved political structure, an outdated economic policy, and an outmoded foreign policy. Many have started betting on the dissolution of the euro. It is likely that the great recession will hit Europeans harder than Americans, due to the neoliberal and monetarist inertia built into european institutions. In fact, the EU has never weathered a major recession in its history. Will it withstand the financial hurricane it never thought possible?
Already spreads on eurobonds issued by the Greek, Italian, Portuguese governments have risen sharply. Yet panic-stricken Iceland and Hungary want shelter under its umbrella, and even Denmark and Sweden are now considering joining the euro, not to say the UK. One of the few countervailing effects to European self-dissolution is that the split between Old and New Europe is likely to be repaired under Obama. But this will also mean that NATO will be strengthened, as euroatlantic relations are now on the sunny side.

Obama’s victory undoubtedly brings a wave of optimism, which after all these years of bushist darkness and obscurantism is refreshing. His administration should chart a fairly liberal, ecokeynesian course in socioeconomic policy. The gross inequalities created by three decades of free-market fundamentalism are likely to be reversed, in America. But what about Europe? From a European perspective, Obama’s election exposes the white christian xenophobic monetarist gerontocracy that still holds on to power in much of europe (definitely in spaghettiland). Strange as it may seem, Europe now finds itself to the right of America. The other time it happened it was in the very scary 30s and 40s with FDR, whose New Deal clearly represents a political template for BHO. His election was made possible by the mobilization of young, women, blacks, latinos. This is the political constituency that opens up venues for social change in Europe, too. In Europe, blacks, arabs, slavs, turks, latinos are either discriminated or persecuted by national governments; they should conversely be empowered by Europe’s Next Left. Let’s write on our banners once for all: Pour l’europe sans frontières du métissage sociale!

European movements have steadfastly refused to give priority to a European agenda, and thus to become the effective social and political opposition to Commission, Council, and Central Bank. The latter is a dangerous remnant of monetarist orthodoxy and if not decisively confronted by political and social pressures, will make the recession worse in Europe than in America, meaning millions more unemployed. Trichet was raising interest rates as late as July, when Europe was already in recession. Suicidal. (Today it’s still over 3%, while zero interest rates are already a reality in US and Japan). We must get rid of him and the Stability Pact. This is priority #1 for organized labor and egalitarian movements.

Since Rostock, radical movements in Europe have targeted three major issues: resurgent racism and fascism, climate change and greenwashing, NATO and euratlantic militarism. Other movement priorities such as precarity, gender, free media continue to be important, but comparatively less so than in previous years. In the wake of the Great Recession, capitalism’s biggest crisis since the 30s, I surmise the hypothesis that a renewed emphasis on the self-organization of precarious, immigrants, unemployed is absolutely crucial. Mass unemployment will give new life to rightwingers everywhere in Europe, we’re already witnessing this in Italy, Austria, Switzerland, Belgium, Denmark, to name just a few countries. And while antifa and antira action is absolutely essential during emergencies, such as when Lega Nord and Vlams Blok tried to stop Koeln’s mosque from being built, not addressing the social causes of xenophobia will make all of us weaker. We must build social solidarity. And to do so, we have to create organizations where mixité and métissage are the norm, where precarious and unemployed, no matter if black or white, christian or muslim, red or pink, can join in common struggles and campaigns against borders and precarity, i.e. against persecution and detention of migrants and exploitation of the disenfranchised in Europe today. More than that, now that deregulation and neoliberalism have been exposed as the market theology, we can actually fight for and obtain a European Welfare State revolving around a European basic income and living wage, p2p culture and ecosocial communities, and more.

We should be clear that this is an overinvestment crisis caused by massive deregulation and negative redistribution: three decades of market excesses, credit-fueled consumer expansion and business-friendly policies have finally come to an end. Neoliberalism, that ideology of the Commission since the 90s, has met its demise. Hayek and Friedman are now finally buried: the policies advocated by the shock therapists have turned out to dig the grave of laissez-faire. It will be decades before that corpse is unearthed again, if at all. This is a crisis like the 30s and harbors similar dangers, namely global fascism, militarist, ethnonationalist, genocidal. Since this is also a biocrisis, it will be ecofascism, regaling given economic and ethnic elites with mastery over their own lives as they send billions to their deaths: if you ain’t got an SUV, you drown, this is the ecofascist message that New Orleans sent to the world. Precarious, creative, migrant labor must win higher income share and expanded leisure at the expense of capitalist elites, while compelling the state to redistribute social productivity, but it will need the equivalent of last century’s radical industrial unionism to do so. At the same time we have to make sure that redistribution is not about fueling our carbon addiction (like in the old-style keynesian expansion), but spent for social activism, public welfare, economic innovation and grassroots redesign of production, energy, transportation systems. The conflicts over social power will be huge about whether to assert a radically progressive agenda or a radically reactionary one. We’ll see conflicts within and among regions of the world like we haven’t seen in decades, if not centuries.

Since Rostock, Copenhagen, Heathrow a new lymph is flowing in the anticapitalist movements adopting queer pink, anarcho black, radical green ideological forms. Pink, black, green urban insurgence seems the name of the game. Pink, because since at least Act Up threw the gauntlet of protest to the neoliberal order, queer has become revolutionary for all sectors of society: it’s no longer simply a matter of identity politics, it bespeaks a radical social transformation, and the contested institutionalization of the end of patriarchy. Pink because it refers to pinko deviant political
tendencies in non-pacified urban subcultures, experimenting with the radical mixing of codes, genders, ethnicities. Pink like a clown insurrection. And ecotopian green like reclaim the streets, guerrilla gardening, criticalmass-vélorution, and now the climate action camp, setting a new template for ecological protest. It’s a DIY, eco-hacking way of dealing with environmental issues, exploring how they can empower the people in adopting alternative forms of socialization and social organization. Urban insurgence, like the one that has mobilized Copenhagen’s alternative youth since March 007 in countless demos, large-scale rioting, and huge non-violent actions to defend to the last the very idea of social squatting as a way of life, which has become integral to the notion of european urban culture over the last three decades. Self-managed zones and radical collectives will have to federate all across Europe, if the political legacy of punk and autonomism is to survive in our cities.

The Great Recession holds promise for radical transformation, but we gotta be clear about what it is about. If we next ftist radicals want to act in defense of the biosphere and remove the capitalist causes of climate change, while maintaining the digital civilization which common labor, information and knowledge has created, I think we should use revolutionary means (civil disobedience and direct action) for ends that are ultimately reformist: a new urban environment, a new welfare system, a reregulated labor market, strongly curtailed capitalist freedoms: NGOs and civil society won’t do it in our place. In other words, anticapitalism is likely to trigger fundamental ecosocial reform, rather than the revolution. This is because the present capitalist crisis is not caused by social and political constraints imposed on accumulation and domination (such as in 1917-22 or in 1968-77), but rather by the lack of regulation from above as well as effective resistance from below.

Also, in the ideological fight with the right and in the ideological competition with liberals and ocialists, anticapitalism as a label doesn’t cut it. In fact, it’s already being appropriated by trotskyists for old New Left parties that cater to the protest vote but don’t change the fundamental hierarchical structures of politics in the direction the Next Left has been experimenting with since Chiapas and Seattle. We need a new social organization (the One Big Heretic Union) and a new (pink, black, green) political ideology for the anticapitalist movement, which, looking at it from the perspective of malmoe’s Klimax vs E-On street block or the night’s battle by the Hilton, is in a nutshell the interbreeding of the autonomous, anarchist, antifa, queer, vegan tendencies that have been brewing over the last two decades in metropolitan subcultures. I think next leftists can better expand their radical action and build alternative structures for society, if social liberals and green capitalists prevail over nationalist authoritarians and military-carbon corporatists in the present historical bifurcation.

The simultaneous interest rate cuts by the world’s central banks in early October 008 was the last-ditch effort to solve the crisis by monetary means. In fact, it didn’t work and monetary authorities have fallen into the liquidity trap, where monetary policy becomes ineffective, and only fiscal policy has an effect on the economy. Thus only major deficit spending of the equalizing sort can now drag the economy out of deep recession. The political battle in Europe and America will be on that, in my opinion. This overaccumulation crisis which is turning into a major effective demand crisis (realization crisis in the marxian terminology). Anyway my take on the Great Recession, which I somehow predicted (the article was printed in early 2007) is here (there’s one typo in the geopolitics cell, it should read “unstable UNIpolar” in the 80s and 90s):

www.leftcurve.org/LC31WebPages/Grid&ForkTable.pdf

Today the debate in movements seems to polarize around two ways to go about the new historical situation created by the Great Recession and America’s shift to progressivism:

i) let’s finally secede from the mad and corrupt world of capitalism and build the new society from scratch, a place were solidarity and sharing are in and inequality and exploitation (of women, peoples, nature) are out; let’s call it the steampunk solution.

ii) the great recession is a once-in-a-century opportunity to build radical political and social organizations/ federations/coalitions that can impose redistribution (and thus economic sustainability) and push for the redesign of basic social structures toward ecological compatibility; let’s call it the commonist solution.

But the two strategies should not be mutually exclusive, especially if we wanna beat the Right. For instance, a massive increase in public spending that goes toward financing alternative, sustainable communities, as well as environmental remediation public works are likely to be progressive ways out of the recession, while a new postcapitalist culture won’t be able to thrive if there aren’t enough spaces and hoods that experiment with new ways of collective living
and explore new dimensions of social conflict.

To conclude, a list of statements that in my wet dreams should spring all european radicals into common action, now that capitalism is in crisis and neoliberalism is over:

– the EU is engulfed by the great recession and is reverting to national sovereignties to solve the credit crisis: one more blow at the already vacillating political legitimacy of Commission; but in the present sociopolitical climate in Europe a rightist, authoritarian and xenophobic, even outright fascist outcome is more likely than a leftist outcome (reformist and/or revolutionary don’t matter)

– in fact, the elites are in disarray: they don’t know how they sank into shit so fast and don’t know the way out, while the free market suddenly has no longer any appeal for the media or the population at large

– the deepening recession will provoke escalating labor conflict, but the precarious generation must build its own organization or be left out from the redesign of economic institutions

– G2, as second-generation immigrant youth (first-generation europeans) are called in italy, will be at the forefront in the social conflict vis-a-vis securitarian and cryptofascist powers — today islamophobia is the functional equivalent of antisemitism in interwar europe: it’s the faultline between right and left in europe; in recessive conditions, which will fan the flames of xenophobia, only a transeuropean revolutionary social organization can bridge the gulf between immigrant and native workers, service and creative labor, between rebellious G2 youth and dissident white youth: let’s build the European Union of the Precarious and the Unemployed

– politically, it’s high time that we build a european federation of autonomous/anarchist/antiracist/queer metropolitan zones and movements sharing common symbols, tactics, strategies. A Hanseatic League of Social Centers, if you will. The circle and the jagged arrow (aka the Blitz) is probably the most universal symbol of european insubordination. For all my quest for a new radical iconology, let’s adopt the inherited one as common signature of our struggles: live it! share it! squat it! fight it! block it!