Just over a year since the beginning of the worst U.S. financial crisis since the Great Depression, and only six months after the federal bailout of Bear Stearns, the seizing up of credit markets continues. The failure of eight U.S. banks this year, including IndyMac, and the recent instability that struck the two government-sponsored mortgage giants, Fannie Mae and Freddie Mac, requiring a special government rescue operation, has had the entire financial world on edge. Mortgage-related losses by themselves “could cause a trillion dollars in credit to vaporize,” according to a special July 28, 2008,Business Week report. The downside effects of financial leveraging (the magnification of results associated with borrowed money) mean that each dollar lost by financial institutions could lead to reductions in lending of fifteen dollars or more, creating a shockwave so massive that it could reveal structural weaknesses throughout the economy. Already the economy is reeling, with faltering growth, a deep slump in housing, massive job losses, rapidly rising oil and consumer goods prices, and a falling dollar | more…
Beginning in March 2008 and extending through the last Democratic primaries of early June, the United States witnessed the most brazen demonization in its history of a person based on his race, his creed, and his ties to a presidential candidate. One major purpose behind these attacks was to use the demonized figure to discredit the politician. But participation in the attacks also fed the voracious, twenty-four-hour-aday media appetite, and quickly took on a life of its own. When we look back at the ugly spectacle then taking place, the evidence suggests that, despite much optimism about narrowing racial divides and an emerging “post-racial” consciousness, something much closer to the opposite had gripped America. | more…
The subprime mortgage crisis that emerged late last summer in the United States led to a massive seizure in the world financial system that has had capital staggering ever since. This has now carried over to the “real economy” of jobs and income. As reported in the Wall Street Journal on April 4, “The National Bureau of Economic Research probably won’t say this for months. But why wait? The U.S. economy fell into recession sometime in January” (“Job Market Hints Recession Has Started”). World economic growth as a whole is expected to decline sharply this year… | more…
The United States and the world economy are now experiencing a major economic setback that began in the financial sector with the bursting of the housing bubble, but which can ultimately be traced back to the basic problems of capitalism arising from class-based accumulation (see the Review of the Month in this issue).…Things are clearly much worse, with respect to the general public understanding of these problems, here in the United States, the citadel of capitalism, than elsewhere in the world. We were therefore bemused by an article entitled “Europe’s Philosophy of Failure” by Stefan Theil, Newsweek‘s European economics editor, appearing in the January–February 2008 Foreign Policy. Theil writes of the “prejudice and disinformation” incorporated in French and German secondary school textbooks dealing with economics. Such textbooks he complains “ingrain a serious aversion to capitalism.” | more…
In early 2011, the nation was stunned to watch Wisconsin’s state capitol in Madison came under sudden and unexpected occupation by union members and their allies. The protests to defend collective bargaining rights were militant and practically unheard of in this era of declining union power. This timely book brings together some of the best labor journalists and scholars in the United States, many of whom were on the ground at the time, to examine the causes and impact of events, and suggest how the labor movement might proceed. | more…
This year marks the 150th anniversary of the birth of Thorstein Veblen, the greatest critic of U.S. capitalism in the early twentieth century and one of the foremost social theorists of all times. Veblen was the subject of a special issue of Monthly Review fifty years ago last July in celebration of the centennial of his birth. He remains important today from our perspective for at least three reasons: (1) he was the first to develop a theory of monopoly capitalism, including a recognition not only of the implications of the rise of a big-business dominated economy, but also the new role assumed in this era by finance, advertising, the penetration of the sales effort into the production process, excess productive capacity, etc.; (2) Veblen provided a strong critique of the ecological destruction of U.S. capitalism (particularly the devastation of forests); and (3) Veblen’s unbridled wit and sardonic language coupled with his keen analysis cut to the heart of capitalist ideology. Thus, for instance, he wrote of the ahistorical character given by orthodox economics to such categories as capital and wage labor | more…
Former Federal Reserve Board Chairman Alan Greenspan’s new book The Age of Turbulence (Penguin 2007) set off a firestorm in mid-September with its dramatic statement on the Iraq War: “I am saddened that it is politically inconvenient to acknowledge what everyone knows: that the Iraq war is largely about oil” (p. 463). The fact that someone of Greenspan’s stature in the establishment—one of the figures at the very apex of monopoly-finance capital—should issue such a twenty word statement, going against the official truths on the war, and openly voicing what “everyone knows,” was remarkable enough. Yet, his actual argument was far more significant, and since this has been almost completely ignored it deserves extended treatment here. | more…
In this definitive socio-political analysis of the Tea Party, Anthony DiMaggio examines the Tea Party phenomenon, using a vast array of primary and secondary sources as well as first-hand observation. He traces the history of the Tea Party and analyzes its organizational structure, membership, ideological coherence, and relationship to the mass media. And, perhaps most importantly, he asks: is it really a movement or just a form of “manufactured dissent” engineered by capital? DiMaggio’s conclusions are thoroughly documented, surprising, and bring much needed clarity to a highly controversial subject. | more…
We have been arguing in these pagesfor more than three decades that the dominant economic reality of advanced capitalism is a tendency toward stagnation of production accompanied by financial explosion. In an article on “The Centrality of Finance,” in the August 2007 issue of the Journal of World-System Research, MR and MR Press author William K. Tabb writes:
Real global growth averaged 4.9 percent a year during the Golden Age of national Keynesianism (1950–1973). It was 3.4 percent between 1974 and 1979; 3.3 percent in the 1980s; and only 2.3 percent in the 1990s, the decade with the slowest growth since World War II. The slowing of the real economy led investors to seek higher returns in financial speculation…. [I]increased liquidity and lower costs of borrowing encouraged in turn further expansion of finance. The coincident trends of growing inequality and insecurity…and the spreading power of rapid financialization do not suggest a smooth continued expansion path for a society based on increased debt and growing leverage. | more…
At the end of May the Bush administration announced that the United States is planning on maintaining permanent military bases in Iraq on a model like that of South Korea, where U.S. troops have been deployed in massive numbers for more than fifty years. Despite the failures associated with the U.S. invasion of Iraq, Washington is openly proclaiming to the world that it intends to do everything it can to maintain a lasting military presence in that country. By doing so it hopes to retain the main spoils won in the war and to declare it a partial victory. The strategic objectives are obvious: to control Iraq and Iraqi oil, threaten Iran, and dominate the geopolitically vital Middle East. Thus Secretary of Defense Robert Gates declared on May 31 that he did not expect the United States to withdraw from Iraq as from Vietnam “lock, stock and barrel” and invoked the example of South Korea. Earlier that week White House Press Secretary Tony Snow, conveying the views of President Bush, said U.S. troops would remain but would be in an “over-the-horizon support” role to maintain security in Iraq—with permanent bases on the South Korean model. Lt. Gen. Raymond Odierno, in charge of daily military operations in Iraq, stated on May 31 that he supported the creation of a South Korean type U.S. military presence in Iraq. The message could not be clearer and can be summed up as: Naked Imperialism: The U.S. Pursuit of Global Dominance(see John Bellamy Foster’s book with this title for an analysis of the larger forces at work). | more…
In Class Dismissed, John Marsh debunks a myth cherished by journalists, politicians, and economists: that growing poverty and inequality in the United States can be solved through education. Using sophisticated analysis combined with personal experience in the classroom, Marsh not only shows that education has little impact on poverty and inequality, but that our mistaken beliefs actively shape the way we structure our schools and what we teach in them. | more…
The focus of this book is the emerging economic confrontation between European and U.S. capitalism at the end of the “golden age” of capitalism in the late 1960s. Ernest Mandel here paints a remarkably clear, comprehensive, and detailed portrait of trends at that critical period. Mandel moves with ease from the most general international problems to the specifics of corporate activity, and few developments in the business and economic worlds seem to have escaped his attention. | more…
