Monday, May 10, 2010

Recession Part II: The Stock Market Strikes Back


Global stock markets, those infallible thermometers of capitalism's health, are back on the rise with the news of Greek's loan deal and a 750-billion-Euro plan to back up loans and provide emergency funds to future failing governments. These promised funds from the European Central Bank are like water to the parched roots of Wall Street, the London FTSE, and even the Asian markets. Proving, once again, that this is truly a global economy, all is right in the world, glory glory hallelujah.

EU Commission President Jose Manuel Barroso (who happens to be Portuguese) even says, according to the BBC, "Our fundamentals are certainly good."

Surely he must mean the "fundamentals" of a regional and global economy, meaning consumer goods, industry, and raw materials?

When we juxtapose (I love juxtaposing) this statement from a BBC article with yet another good article, this one on the sustainability of the environment and its economic implications for the future, we see this is not the case. Human economies are often conceived of as a supply chain, but we forget that the beginning point of this chain is nestled in the complicated web of the Earth's environment. It's a web we hardly understand, yet one corporations fuck with like the own the place. (Seriously? Golf balls and tires? It's the 21st Century!)

So my apologies to the fine bankers of Europe, but your institutions are built on sand. In 20 or 30 years, it won't matter how many shiny Euros you have in the bank; if there's no arable land, no amount of gold will buy you food.

This is just another touted event in the "inevitable" climb to "global recovery." Of course we will remember that after every "recession," the so-called "recovery" leaves hundreds of thousands of people all across the globe worse off than before. Their homes foreclosed, their once-stable jobs irrevocably lost, their future in peril. As this instability increases, the chances that their region will go to war increase as well, and we all know by now that war is not a desirable outcome (except, perhaps, if you're Haliburton).

So yes, the banks are now investing in Spain and Portugal and all the rest of those governments that teetered on the edge of disaster. Perhaps that will stave off the remaining fallout from 2008's Great Recession. Now the stock market can creep back towards its "infinite growth" and the capitalists can rub their paws in anticipation of their "absolute wealth." It'll be 1991 all over again, only this time the European Union version: the countries taking international loans will sacrifice their people's livelihoods on the altar of austerity.

But let us here not forget that the seeds of the next crisis have already been sewn. The peoples of Europe, led for the moment by the rowdy but largely stumbling Greeks, will not take all this lightly. Not when banks and industry go back to making record profits. Unemployment in the United States has felt no alleviation. The wealth continues to concentrate on the top and wreck havoc at the bottom. BP will get a slap on the wrist (at best a spanking) when it deserves the corporate death penalty. There are other problems here at home, too: commercial land prices, consumer debt, the coming health and education sector storms. (And further on, the public sector.)

So I wouldn't look so smug and hopeful if I were you, Mr. MBA. If you don't get a decent war to clear your slate, the pace of recession and economic disaster will only pick up.

5 comments:

comrade x said...

O.K. where did my comment go?

Dresden Scott said...

Your damn modem probably ate it.

comrade x said...

Its working now. Turns out the problem was at the ISPs end. You know, private enerprises' great efficiency and all.

Locke said...

Perhaps BP should be dismantled, but drilling for oil should not be prohibited on all accounts. Solar energy is still struggling to reach a point of applicability, till then oil will be needed unless people are willing to return to the 18t century. I wouldn't mind. I could do with out the distractions of the internet.

Dresden Scott said...

Locke, you're partly right. We can't wean off oil overnight. But we can't even do it at all as long as oil companies are giving tons of money to political parties. By nationalizing the giants like BP, we could turn that profit towards a real renewable resource project. (Currently BP spends about 1% of its income on developing "green" technology.) Imagine the leap forward our society would take if we had BP's 1st-quarter profit of $6.5bn to play with!

So I do agree that it can't be an overnight transformaiton, but we won't need oil for much longer if we take over the oil companies. Nationalization isn't the only way to do that, but it's more in step with the stage we're in. There are solutions beyond the horse-and-buggy! ;) And also I need the internet to keep me awake at work. ;)