Tuesday, March 30, 2010

The Liquidation of The US Economy

Marshall Auerback has a guest post at NC in which he discusses the origins of the Greek debt crisis, and makes the point that it was precipitated by both France and Germany, who, he notes, have violated the same GDP/Debt rules that Greece did:

Of course, both France and Germany also violated these rules and were never punished for their transgressions. Indeed, the selective applications of the rule in EMU have made it more apparent that this is nothing more than a liquidationist gambit on the part of Berlin and now, it appears, Paris.
A liquidationist gambit is the removal, by power, of government from the society. Liquidation occurs when society has ceased to be a center of power, and has become a center of weakness. It therefore becomes far more prone to corporate predation. It does not mean that government becomes either smaller or less intrusive, but that government’s traditional role of mobilizing resources for broader public purpose is impaired. These are some of the instruments which are characteristic of liquidation gambits:
1. Looting
2. Corporatism and cartelization
3. Brow-beating (societal interest above self interest, power as power, cooptation and betrayal) particularly via manufactured bankrupcties
4. Shams and accounting frauds

These are all, of course, the exact same types of activities you'd expect to find in your average banana republic. But what should seem frightening to Americans is that three of the four (1,2,4) are now standard operating procedure in the U.S. economy.

And they are certainly not sustainable.

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