How to solve the crisis


Published on

Published in: Business, Economy & Finance
  • Be the first to comment

  • Be the first to like this

How to solve the crisis

  1. 1. HOW TO SOLVE THE CRISIS? Alcím mintájának szerkesztése Dr. Zoltan Pogatsa24.5.2012
  2. 2. V or W shaped?L-shaped:• Corporate capitalism• Corporate party financing• State capture• Unsustainable corporate, household and state finances• Crisis24.5.2012
  3. 3. Rate of profitMarx: fallingReality: growingQuestion: WHO WILL BUY THE PRODUCTS?24.5.2012
  4. 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. 5. Mediatised consumerism24.5.2012
  7. 7. EVER SMALLER• Because it is STATE „too large”24.5.2012
  8. 8. Financial deregulation (Johnson & Kwak „13 Bankers”)24.5.2012
  9. 9. Banking compensation24.5.2012
  10. 10. 24.5.2012
  11. 11. Securitization24.5.2012
  12. 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. 13. War24.5.2012
  14. 14. Sovereign indebtedness24.5.2012
  15. 15. Household indebtedness24.5.2012
  16. 16. Geographical expansion• CEE, BRIC, etc.• New consumers for corporations Cheap labour offshoring for corporations•24.5.2012
  18. 18. Responses so far• Anticyclical fiscal expansion• Monetary easying (QE1&2, ECB)• Austerity (Stiglitz, Soros, etc.)• No regulation• No sustainability24.5.2012
  19. 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. 20. How to solve the crisis? Cut the nexus between corporations and government.24.5.2012
  21. 21. GREECE Alcím mintájának szerkesztése24.5.2012
  22. 22. Greek state not big!24.5.2012
  23. 23. Revenue side problem!24.5.2012
  24. 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. 25. Cheap lending in €uro24.5.2012
  26. 26. €urozone not an optimal currency area24.5.2012
  27. 27. Not a productivity issue!24.5.2012
  28. 28. But a wage issue!24.5.2012
  29. 29. Germany benefitted from €z24.5.2012
  30. 30. Greece had deindustrialised in free trade24.5.2012
  31. 31. THANK YOU!• pogatsa@gmai l.com24.5.2012