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How to solve the crisis

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  • 1. HOW TO SOLVE THE CRISIS? Alcím mintájának szerkesztése Dr. Zoltan Pogatsa24.5.2012
  • 2. V or W shaped?L-shaped:• Corporate capitalism• Corporate party financing• State capture• Unsustainable corporate, household and state finances• Crisis24.5.2012
  • 3. Rate of profitMarx: fallingReality: growingQuestion: WHO WILL BUY THE PRODUCTS?24.5.2012
  • 4. Answers1. Mediatised consumerism2. Borrowing from the future (debt)3. Ridding the state of resources (tax cuts, offshore)4. Geographical expansion (CEE, China, BRICS)5. Environmental degradation6. War24.5.2012
  • 5. Mediatised consumerism24.5.2012
  • 6. RIDDING THE STATE OFRESOURCES24.5.2012
  • 7. EVER SMALLER• Because it is STATE „too large”24.5.2012
  • 8. Financial deregulation (Johnson & Kwak „13 Bankers”)24.5.2012
  • 9. Banking compensation24.5.2012
  • 10. 24.5.2012
  • 11. Securitization24.5.2012
  • 12. Offshore (Shaxton: Treasure Island)Tax Justice Network Financial Secrecy Index:1. US2. Luxemburg3. Switzerland4. Cayman Islands5. UK•. Rich individuals in offshore: a complete yearly US GDP24.5.2012
  • 13. War24.5.2012
  • 14. Sovereign indebtedness24.5.2012
  • 15. Household indebtedness24.5.2012
  • 16. Geographical expansion• CEE, BRIC, etc.• New consumers for corporations Cheap labour offshoring for corporations•24.5.2012
  • 17. ENVIRONMENTAL DEGRADATION24.5.2012
  • 18. Responses so far• Anticyclical fiscal expansion• Monetary easying (QE1&2, ECB)• Austerity (Stiglitz, Soros, etc.)• No regulation• No sustainability24.5.2012
  • 19. Why don’t politicians act?FinanceChris Dodd, Chair of Senate Banking Committereceived $2.9mn from securities industry in2007-2009, more than three times any senatorwho was not a presidential candidate. („13Bankers”)DefenseLockheed Martin is the biggest campaign24.5.2012
  • 20. How to solve the crisis? Cut the nexus between corporations and government.24.5.2012
  • 21. GREECE Alcím mintájának szerkesztése24.5.2012
  • 22. Greek state not big!24.5.2012
  • 23. Revenue side problem!24.5.2012
  • 24. Greece• 3-5% of GDP in Offshore (mainly Cyprus)• Military expenditure: EU countries sold €1bn worth of military to Greece in 2010• Would need 6-8% growth to get out of sovereign debt trap• Will not happen with 5th wave of austerity24.5.2012
  • 25. Cheap lending in €uro24.5.2012
  • 26. €urozone not an optimal currency area24.5.2012
  • 27. Not a productivity issue!24.5.2012
  • 28. But a wage issue!24.5.2012
  • 29. Germany benefitted from €z24.5.2012
  • 30. Greece had deindustrialised in free trade24.5.2012
  • 31. THANK YOU!• pogatsa@gmai l.com24.5.2012