KEYNESIAN MIX OR NEO-LIBERALISM

Randy Black does a good job of presenting a version of neo-liberal views on the economy that are responsible for the lingering global recession and the debt-ridden US and EU economies, as well as for the imminent double-dip recession that awaits the world in 2012. What Randy fails to understand is that neo-liberal policies have consequences, and that was the central theme of my posting on the need of the state to  'absorb surplus capital' from the private sector. I stressed that governments will in fact go the route of neo-liberalism because that is what the lords of capital want, and politicians merely try to preserve the status quo which they faithfully serve, no matter the PR intended to engender social conformity. By so doing, however, one cannot complain, as Randy does and those of similar ideological disposition do, about the nation-wide grass movement protesting the decadent US political economy and its institutions.

If one supports the exact same policies that led the US to its current state of debt and recession, then one must accept the possibility of social disharmony, eventually social uprisings, that come with it. We cannot reinvent the wheel, but at least we can be realists and agree a) that most of the ideas we put on the table are recycled ones, b) depending on what kind of society one wishes to see then policies are followed accordingly, and c) social engineering by the state is inevitable no matter what policies one proposes, whether my radical Keynesian mix or Randy's neo-liberal mix.

I have argued in many postings in the last five years, before the global recession, that neo-liberalism has failed in the West, but the US government pursues the same failed policies to the detriment of society at large and it calls on the rest of the world, including Greece that has been in the toilet owing to neo-liberal policies as well as endemic government and private sector corruption, to adopt failed policies because they strengthen finance capital. Randy's comments indicate that he assumes each country is isolated on this planet, and if Greece and southern Europe have fiscal and economic problems, those are separate and distinct to them alone. This assumption is based on his idea that there is no global economy, no regional economic blocs, no IMF, no G-20 coordination, no World Trade Organization, no World Bank, and above all no multinational corporations and global finance capitalism on this planet.

As it has evolved in its current phase of parasitic welfare capitalism, the world economy is a giant cesspool. The periphery nations like Greece, Portugal, Ireland, Hungary, etc. are swimming for their survival, while at the core are the G-8, some of which are now in as much trouble as the periphery. Who would have guessed a year that Italy would be borrowing at 8% for its short-term bonds, that France is now under its own self-imposed austerity program and targeted by the Fitch, S and P and Moody's for a downgrade? Who would have guessed a year ago that there would be lack of interest for short-term German bonds at the recent auction. This is proof that no country has a private toilet in which it is doing its business and sinking, that all of them are swimming in the giant globalization cesspool which of course rots from the center out and takes down with it the entire world.

Countless people have written on the failure of neo-liberalism and the failure of government to change course despite the global recession, on the need to reconsider the existing policies that have caused the current global recession. Although ideas are the basic framework on which to proceed, they do not cause change if they are opposed to the status quo and are intended to upset the social order. Material conditions alone are the causes of change and it is very clear that objective material conditions in the US and in much of the Western World have changed considerably in the past four years. This is the driving force behind grass roots social movements that governments must take into account for they may become social uprisings in the future if objective material conditions deteriorate, a situation that will force otherwise 'democratic' societies to become increasingly authoritarian or quasi-police states.