Friday, October 24, 2008

Mexico, the U.S. and the Economic Crisis

By John Peterson
October 24, 2008

"Poor Mexico! So far from God, and so close to the United States!" - Porfirio Diaz

There's an old saying that when the U.S. economy gets a cold, the Mexican economy gets pneumonia. For example, between 2000 and 2001, when the Internet bubble burst and the U.S. economy slowed from 3.7 percent to 0.8 percent, Mexico's economy went from 6.6 percent growth to zero, with devastating effects on the lives of millions of people. So what happens when the U.S. economy itself gets pneumonia? The deepening U.S. financial crisis is already having a violent knock-on effect around the world, and Mexico will be among the hardest hit.

Mexican President Felipe Calderon – considered by millions of Mexicans as illegitimate due to the blatant electoral fraud that brought him to power – has said that Mexico is no longer economically dependent on the U.S. and will therefore not be adversely affected by the crisis. Confronted with rising social instability and falling oil revenues, Calderon needs to put on a brave face and find a way to justify his government's increasing use of repression to maintain itself in power. Social discontent in the country is reaching the boiling point and a further hit to the Mexican economy could unleash an even bigger wave of mobilizations by the masses, with revolutionary implications. Unfortunately for Calderon, the reality is a far cry from his optimistic assessment.

According to Alfredo Coutino, a senior economist for Latin America at Moody's “Mexico is the most exposed economy to the U.S. recession.” And according to George Grayson, an expert on Mexico at the College of William & Mary in Virginia: “I think Calderon is sort of like a deer caught in the headlights of four onrushing tractor trailers.” How could it be otherwise when 80 percent of Mexican exports go to the U.S., and U.S. consumers and companies are cutting back across the board? Already, the U.S. economic crisis is having a devastating effect on millions of Mexicans (and Central Americans) living at home and abroad.

For decades, U.S. corporations shuttered factories and “shipped jobs off to Mexico” in pursuit of higher profits due to the availability of cheaper labor and weaker labor and environmental protections. Now factories in Mexico are being shut down and the jobs are being “shipped off to Asia.” According to the United Nations, from 1970 to 2007, Latin America's share of worldwide domestic product remained more or less unchanged at 5.7 percent, while Asia's share grew from 18 percent to 29 percent. Mexico's share of the world economy has now fallen from a 1980 high of 1.4 percent to just 1.2 percent. In other words, the region has stagnated for nearly 40 years, and even before the recent crisis, Mexico was on a downward spiral.

But these figures do not reveal the entire picture. Over the same period, the amount of wealth concentrated in the hands of a tiny minority has increased astronomically. This has led to the most unimaginable impoverishment of millions of Latin American workers, peasants and urban poor. A recent study by the Organization for Economic Co-operation and Development found that the greatest inequality between rich and poor among OECD countries is precisely in Mexico, where the income of the wealthiest 10 percent of households is more than 25 times greater than the poorest ten percent. The world's third richest person, just behind Bill Gates ($56 billion) and Warren Buffet ($52 billion) is not someone from Germany, Japan, or the Saudi royal family. It's Carlos Slim, a Mexican, with an estimated $49 billion in assets – more than the annual GDP of dozens of small countries put together. Slim made his fortune when the formerly state-owned telecommunications monopoly was sold off and became a privately run monopoly – just as they now hope to privatize the state-owned oil industry.

International currency markets have been in turmoil over the last few weeks, and the Mexican peso has fallen to new lows. The drop is comparable or even greater than the 1994 devaluation of the Mexican currency. For the first time since 1998, the Mexican Central Bank has been forced to sell dollars ($11.2 billion worth) in order to prevent the total implosion of the peso. The official rate is now roughly 14 Mexican pesos per U.S. dollar, although in some parts of the country, especially along the border, it has fallen as low as 17 to 1 on the street. This represents a steep drop in value, especially after several years of relative stability at between 10 and 11 to 1. There was even talk of the “super peso.” This is now finished.

According to reports from the border, retail sales have plunged. In the border city of Matamoros, Tamaulipas, Genaro Alonso Tavera, the former president of the an association of money exchange outlets reported business was down 30 percent. This has also led to a dramatic decrease in traffic from Mexico into the U.S., which is already affecting businesses on the U.S. side who depend on Mexican shoppers to stay open. In addition, consumer prices rose 5.47 percent in September from a year earlier, and are expected to rise further in October and November.

In other words, Mexican workers' purchasing power is being squeezed by both devaluation and inflation. An item – for example a kilo of tortillas – that cost 10 pesos just a few months ago, now costs 15 pesos or more. That's a colossal increase in the cost of living. This alone is a recipe for a surge in the class struggle on an even higher level than in 2006, when the struggle against the electoral fraud, several major strikes and student mobilizations, and the Oaxaca Commune shook the country from top to bottom. Those momentous events are just a hint of what's to come in the coming period. Even more serious confrontations between the classes are being prepared: the backs of the Mexican masses are against the wall and they have no alternative but to struggle.

The two most important sources of income for the Mexican economy are PEMEX, the nationalized oil industry, and remittances from Mexicans living and working in the U.S. However, oil prices have fallen from $147.27 a barrel in July to under $70 in mid-October. This, combined with falling demand and overall production due to crumbling infrastructure, corruption, and mismanagement, means a fiscal disaster is looming. Other export commodity prices are also falling and tourism is expected to drop as well. Calderon is moving might and main to force through the privatization of PEMEX, as a way of injecting cash into the economy – and above all to further enrich the Mexican capitalists and foreign oil companies. From Wall Street to Mexico City, within the limits of capitalism, whether it's nationalization or privatization, it's all about stealing from the poor to give to the rich.

As for the other pillar of the economy, Mexicans living in the U.S. sent home 12 percent less money in August than a year ago, the largest drop since the Bank of Mexico began tracking remittances 12 years ago. This amounted to $1.9 billion as compared to $2.2 billion a year earlier. In the first 8 months of 2008, $15.5 billion was sent home, 4 percent less than the same period in 2007. Some 11 million Mexicans live in the U.S., forced to emigrate here in search of work as whole swathes of the country have become an economic wasteland. Entire families, neighborhoods, and even towns are entirely dependent on these monies for their very survival. Now that source is drying up.

In times of economic crisis, immigrant workers are among the hardest hit. Already badly paid and with few if any labor or legal protections, they are among the first to be laid off, are increasingly swindled out of money owed for work performed, and are being rounded up like animals and deported by the thousands in increasingly aggressive Immigration and Customs Enforcement raids. Immigrant workers are being used as scapegoats for the economic crisis, to divert attention away from the real cause of the economic crisis, of the millions of foreclosures and layoffs: the capitalist system itself. They are also being punished for daring to rise up against decades of super-exploitation and discrimination in the “immigrant spring” of 2006.

From Oct. 1, 2007 to Aug. 31, 2008, Immigration and Customs Enforcement conducted 1,172 work-site raids across the U.S. Hundreds of raids on homes and neighborhoods are not included in these figures. One raid alone, in Postville, Iowa, resulted in the detention of 389 immigrant workers. This single raid cost more than $5.2 million to prepare and conduct, not including the expenses incurred by the Department of Labor or the federal attorney general (more than $13,300 per detainee). This is nothing less than a campaign of state terror (using workers' tax money) against one of the most vulnerable layers of the working class.

And yet, millions of Mexicans and other Latin Americans have no choice but to emigrate to the U.S. Simply put, the situation facing them at home is even more dire. As the crisis deepens, millions more will be forced to flee the dead end that capitalism has led to in most Latin American countries. The raids, deportations, increased border patrols, layers of walls and checkpoints, and massive detention centers are also a pre-emptive blow against the Latin American revolution, which will not respect the artificial borders drawn up by imperialism. There is nothing the capitalists on both sides of the border fear more than the united international working class.

So while Wall Street panics and the billionaires receive billions in tax-payer dollars to bail them out, millions of working Americans are losing their homes, jobs, and hopes for the future. But for people living just across the border in Mexico, things are even worse. And for the millions of undocumented immigrant workers and their families already living in the U.S., the walls are closing in – literally. The “immigration crisis” and the general economic convulsions are at root part of the same problem: the organic crisis of the capitalist system. All workers' interests are the same, no matter where we were born. In the coming period, the ruling class will do its best to divide the working class along lines of race, ethnicity, nationality, gender, etc. The only solution is working class unity and militant organization and mobilization against the real enemy: the capitalists and their system.

With a global economy comes global economic crisis. The U.S. and Mexican economies are tightly interconnected, and what happens in one country has a direct and profound effect on the other. The Mexican working class has been ground down for decades by the death agony of the system. Entire areas of country are out of the government's control and thousands of civilians killed every year in the crossfire between the government and the narco-traffickers – it's often hard to tell which is which. Some bourgeois analysts even warn the country is on the verge of becoming a “failed state” like Afghanistan or Pakistan. This, right on the border of the most powerful country on earth. The choice facing the Mexican masses is truly one between socialism or barbarism.

But there is another side to the story. The epoch of world capitalist crisis is also the epoch of world revolution. The Mexican masses have shown time and again that they have not forgotten the heroic revolutionary traditions of the past. In recent years, millions of Mexican workers, peasants and youth have mobilized to improve their lives, to defend Social Security, to defend public education, against electoral fraud, to stop the privatization of oil, and for better wages and conditions. In the coming historical period, the Mexican working class, along with their U.S. class brothers and sisters, will move again and again to change society. Together, we will succeed in ending the horrors exploitative system of capitalism once and for all.

John Peterson


troutsky said...

CAJA and IWW hosted speakers from Mexico Solidarity Network last night to talk about Merida Initiative (Plan Mexico) Unemployed workers become soldiers (armed by US) to kill other unemployed workers.A model for the US as social unrest increases?

Craig Bardo said...

Looks like a good opportunity to annex Mexico!

Mariamariacuchita said...

I have been to Mexico many times. Lived one summer there.

Calderon is a joke; he is another Bush.

People are beginning to starve. The price of tortillas has gone through the roof. Mexico now has areas of poverty worse than the poorest countries in Africa and much of Mexico is no longer seen as a desireable place for tourists as crime and kidnapping has gotten out of control.

The fragile economies of places like Merida have come to rely on tourism as many visited the ruins nearby at Chichen Itza. Without tourists, how will they eat? Many used to have kitchen gardens, but so many have forgotten how to grow food and many others have no land.

Mexico is ripe for revolution... maybe that is the real reason we are building a keep the poor out when the kettle boils over, and it will if something does not change.

Good post.

Frank Partisan said...

Troutsky: In 1930s Minneapolis, the Trotskyists organized an unemployed union. That was one of the reasons, in 1934 Minneapolis the general strike was won. No glamour there, but unemployed should be organized.

CB: I think the opposite.

Maria: I'm confident Obrador will be the next president.

roman said...

Mr. Peterson's report is well written but his conclusion that capitalism cannot bring prosperity to most Latin Americans is plain wrong. With prudent governmental oversight and a funtioning judiciary to control corruption, capitalism is able and does improve the lives of those who live and work under the system.
This recession is a direct result of "tinkering" by the government into the free enterprise system in order to promote a social agenda promoting home ownership for the poor.
BTW, the fact that the validity of the Calderon election victory is once again being raised, even though it was validated by the Federal Electoral Tribunal, tells me that Mr. Peterson is an Obrador supporter and the piece smacks of "sour grapes" ala the 2000 US election Bush victory over Gore.
Time to move on. Every election has a winner and loser. Obrador lost because most Mexicans favored Calderon, plain and simple.

Ducky's here said...

roman, I assume you are talking about the Community Reinvestment Act.

Holding it responsible for a world recession is such an insane idea that it really shouldn't have to be debunked but there is plenty of information available.

The CRA was passed in 1977 and was designed to assure that banks are in fact lending to QUALIFIED minority applicants. In fact, the default rate is slightly lower than the rate in neighborhoods not previously redlined.

Pick up a copy of this weeks The Nation for a good article on the nonsense that is being spread about ACORN.

Giving morgages to QUALIFIED minority applicants under the thirty year old CRA caused the current world recession. When you say something that silly do you understand why the right is currently ridiculed?

Culture Vulture said...

Thanks for blogging.

Craig Bardo said...


Greetings fair ambassador from opposite world! You have reemerged with no signs that any intelligent life you may have encountered there, rubbed off.

Government intervention is the crisis. The Clinton administration used CRA as a bludgeon to force banks to make bad loans, corrupted Fannie and Freddie placed their imprimatur on garbage they then sold off to Wall Street. Rating agencies relied on "the moral obligation" of the gubment and corrupt Democrats being paid by the GSEs blocked attempts to reign it all in.

Deregulation kept it from being worse. Chase couldn't have bought Bear Stearns, B of A couldn't have bought Merrill, Morgan Stanley and Goldman couldn't have changed their charter. Regulation didn't help, it actually hurt. Sarbanes Oxley's mark to market rule exacerbated the decline in value of assets and didn't prevent Democrats from screwing everything up by combining ill conceived social engineering with flat out corruption.

Even maria's tortillas can be traced to gubment. Ethanol subsidies pushed by snake oil salesmen wanting us to believe we are effecting the climate, pushed subsidies to oil companies to produce ethanol. They wouldn't even allow the more energy and price efficient sugar based ethanol to be imported. These subsidies have not only pushed up the prices of food all over the world but they have contributed to the destruction of eco systems around the world because people are trying to take advantage of the subsidy.

Until Mexico banishes all remnants of the ejido system and makes a commitment to property rights and protects the people from government, the citizens of that resource rich country will never be able to feed themselves.

Anonymous said...

mr. ducky,

What, no alternatives or red herrings? Not even CDS's?

Alinsky RULE 11: "The price of a successful attack is a constructive alternative." Never let the enemy score points because you're caught without a solution to the problem. (Old saw: If you're not part of the solution, you're part of the problem. Activist organizations have an agenda, and their strategy is to hold a place at the table, to be given a forum to wield their power. So, they have to have a compromise solution.)

Live by Rule 5, die by Rule 5. ;-)

Frank Partisan said...

Culture Vulture: Thank you for visiting.

Roman: The whole nature of capitalism is anarchistic, not compatible with regulation. From this crisis, we can tell regulators are easily snowed.

Obrador will win decisively next election. Who else can hold down ferment? The period of politicians like Calderon is over.

Ducky: The CRA is like a thimble sized cause of this crisis. I would imagine if you are rightist, to go beyond that, would mean questioning the methods used to make quick fortunes, and questioning deregulation. In another words, it is admitting Reaganism didn't work. The issue is not loans. The issue is why are people allowed to lose their homes.

CB: You sound like some kind of anarchist.

Capitalism is hostile to regulation. As I said it's an anarchistic system, with regulators easily snowed. Regulation is not the answer. A democratically planned economy is the alternative. This is a crisis of overproduction. There is not famine because of no crops, but because of the price not right.

I agree with you on ethanol.

FJ: No Alinsky for me. He is the guy who'll teach you, how to organize a community, to win a street light. Trotsky taught how to take the big prize.

Larry Gambone said...

Hey Ren, What's with the capitalism is "anarchist" bit? Better to use the work "chaotic" We anarchists are the foremost anti-capitalists and favor direct democratic worker and community control of the economy.

As for CB getting rid of the ejido would be a disaster for Mexico. As it is thousands of farmers are being driven off the land by US dumping practices. With the ejido gone it would be a tidal wave of misery - that would wash over the US Apartheid Wall. Furthermore, the ejido is the traditional form of property ownership among Mexican farmers. I thought conservatives were in favor of tradition.

Craig Bardo said...


I am seeing the wisdom of the anarcho capitalists more and more every day. We have been living a free market illusion because we are nearly 60% socialist. The government picks winners and losers, monetary policy controlled by a central bank (the fed) has been nothing but a series of disasters from its inception. I hang onto Milton Friedman and the Chicago School, partly because of their empirical rigor but the Austrian School, von Mises, Rothbard and Friedman's son David, among others have great appeal to me except for their insistence on hard currency linked to precious metals. We've been lurching toward this mess since Wilson put the fed in place, Hoover put Smoot Hawley tariffs into effect and FDR pulled Hoover programs together and called them the New Deal adding 100,000 pages to a federal register that before he took office had just 2450 pages. Then there was the Great Society and now this. The anarcho guys, like Trotsky predicted the demise of the Soviets, predicted this mess.


Technically, the government did away with the ejido system but the taxes make taking ownership too burdensome for most. Let me explain why its a disaster.

Do you wash a rental car? No, you wash the car you own. Much of the formerly arable land in Mexico is now desert because no one invested in and cared for the land. Why? Because if you work the land and have no right to dispose of it, not even the yield, then it's worthless to you. Why plant if you can't be sure to harvest. So, people are starving because it's a waste of time, energy and resources to farm. Yes, there is ownership of land, but when you place such a high burden on new ownership, you make it almost impossible for people to rise from their current condition. They are left only with envy and no incentive to do anything but leave the country or become wards of the state.

Craig Bardo said...


Look at Venezuelan oil production. It has fallen off the charts. Why? State ownership, no, profit incentive.

Ducky's here said...

Yes ren, why allow people to lose their homes. In the current environment it has been difficult to get out a message that renegotiating many mortgages would benefit kapital as well as the home owner isn't getting across.

Finding a leftist in the current administration is a fool's errand but we can still find common sense. The current head of the FDIC, Sheila Bair, who has been named as a possible Treasury secretary under Obama has at least seen the wisdom of trying to stop the foreclosure bleeding.

However I still like the claims that CRA loans had anything to do with this. Hell, Lehman's went under because of bad COMMERCIAL loans. They lost hundreds of millions on the John Hancock Tower sale and my friends on the right would have me believe the loan was a jumbo to some unwed black hotel chamber maid.

Ducky's here said...

"...corrupted Fannie and Freddie placed their imprimatur on garbage they then sold off to Wall Street."


Actually cb, you're not even wrong. Fannie Mae and Freddie Mac were essentially PRIVATE institutions and as the total share of mortgages began to be written more by unregulated companies like Countrywide, Fannie and Freddie began to lose market share and in order to preserve stock price and ensure executive bonuses they had to get as frisky as their NON-REGULATED competitors.

There were two causes to this mess:

1. Alan Greenspan was busy keeping the money spigot open while refusing to require minimum mortgage requirements. He was doing this while you and your republican brethren were constantly fellating him. That's a FAIL.

2. Phil Gramm, John McCheese's economic adviser, pushed through the deregulation of credit swap derivatives, i.e. the Enron exemption.

The rest is history. Ren almost has it right when he says the CRA had just a little to do with this. In fact it had NOTHING to do with it and you are blowing smoke.

Ducky's here said...

And through it all, laissez-faire capitalism once more proves itself incapable to manage a reasonably equitable distribution of wealth.

Sooner or later the right will have to come up with a better explanation than just pissing on the poor.

Or maybe the won't. At least not in America where they get fed a few scraps of the table and merrily piss on the ones who haven't even the scraps.

SecondComingOfBast said...


"Deregulation kept it from being worse."
"Regulation didn't help, it actually hurt."

This is why the right isn't going to get very much traction out of this issue. You're right about Clinton's manipulation of the CRA, and you're right about almost everything else, but then you turn right around and drop this turd in the punchbowl.

There are bad regulations, overly oppressive and restrictive ones, but human nature demands some kind of oversight when it comes to things as vast, complicated, and all-pervasive as the national economy. The key is transparency.

Craig Bardo said...


Your beloved leader, Karl Marx knew who the father of capitalism was but you missed that lesson. John Locke and before him, Hobbes, Grotius and Plufendorf understood that unless a man were allowed to own himself and the product of his intellect and effort, then he was not free. He was subject to the whims of the state, dictator or monarch.

Jefferson was a smart, well read dude and wrote "We hold these truths...Life, Liberty and [property]. He had to accede to the demands of others and put in happiness instead but got it in the due process clauses of the 5th and after his time the 14th amendment.

They were terribly wise in establishing a country on this fundamental premise, that we have the liberty from government interference to buy more and more property, the essence of freedom.

In a market economy the distribution of scarce resources is governed by the mechanism of price. It is the most efficient and effective way to distribute scarce resources. There is no notion of equitable distribution there. The equality is built into the opportunity not the outcome.

The Soviet Union literally tried to manage prices and created shortages where they could not be tolerated and surpluses where they were not needed.

Let's have the conversation about America's "poor" versus world poverty sometime, that should be entertaining and educational.

Craig Bardo said...


I gave you specific examples of how deregulation helped. Before Graham Leech Bliley, Chase couldn't have bought Bear Stears, B of A couldn't have bought Merrill Lynch and Morgan Stanley and Goldman Sachs couldn't have changed their charters to attract new capital.

On the regulation front. Sarbanes Oxley has pushed capital off shore and hedge fund managers used the legislation's mark to market rules to drive WaMu, Indy Mac and Wa Mu down to cover their short positions at a very nice profit. Further, Sarbox didn't prevent the corruption of Fannie & Freddie nor did it halt the meltdown of the other financial institutions.

Moreover, Banks are heavily regulated and they are failing left and right. On the other hand, insurance companies are largely self regulated and are stalwarts. Even AIG's insurance companies are among the strongest in the business, their holding company execs just got carried away. The notion that government is the best regulator doesn't stand up on its face, much less to the light of any scrutiny.

Anonymous said...

It's all about having skin in the game. It isn't capitalism, otherwise.

Frank Partisan said...

I'll leave comments tomorrow.

Bob said...

The notion that government is the best regulator doesn't stand up on its face, much less to the light of any scrutiny.

The problem with this line of thought, however, is that it is neglecting the unchecked greed, pillaging of the poor, and general shafting of the working class that a completely unfettered market will bring.

Sure government may not be the greatest regulatory agency but the alternative is worse.

Anonymous said...

Yeah, we ought to regulate baseball and football games, too. I wanna know who's gonna win before I sit down and spend two hours in front of the television set.

Ducky's here said...

cb, I was discussing your ridiculous contention that the CRA had anything to do with the current Wall Street(i.e. capitalism, free market, call it what you like) collapse.

Now if you would like to cut the straw man arguments and man up and defend your position please do.

The CRA had NOTHING to do with the Wall Street collapse. Laissez-faire capitalism did.

Ducky's here said...

cb, I would also like to point out that failing banks were the banks who went to the money spigot and loaned on unregulated mortgages. Greenspan, you hero, required no regulation on loans and simply provided the boys with plenty of free chips.

Now you have the fallout.

There is NO way you can point to anything in the regulatory structure that caused this meltdown of world markets.

You aren't even wrong.

Craig Bardo said...


First, we have not had a free market since Wilson put the Fed in place. Greenspan was never my hero, I think the fed should be abolished! We have been fully socialist since FDR. I view things as on a spectrum and the answers to questions of governance lie on that spectrum. Does more centralization of power work or does a diffusion of power work. Unless you are trying to grow bureaucracies, the diffusion of power works best for the interests of liberty and prosperity.

The GOP today is like the Democrat party of the 70s and 80s. It was George Bush and Senate Republicans that bowed to nationalizing banks and socializing losses.

There is nothing straw man about CRA and the government intervention of the Clinton administration using it as a bludgeon to interfere in the underwriting of home mortgages. A law permitting the GSEs to securitize loan tranches and to place the government imprimatur on paper, which investors relied upon to their detriment is the cause of the meltdown period. Laissez faire capitalism had nothing to do with this, but then you are the fair ambassador from opposite world.

I have pointed to the failure of regulation to prevent any of this and how deregulation eased the crisis.

Larry Gambone said...

I don't know how many times we have to point out here CB, but state ownership/control is not socialism, never was, never will be. It is STATE CAPITALISM. The US and other economies are mixed economies of state, corporate and private capital. It is fine with me if you are against state capitalism, but don't pretend it is what I want, Ren wants or anyone else here wants! And I should add the fact that Mises and other members of the Austrian school have made this error and persisted in it shows an extreme theoretical weakness on their part. Any familiarity with the writings of Marx and Engels, let alone the earlier socialists like Owen and Proudhon, would show that the did not believe in state ownership, but as Marx mentioned frequently, "cooperative production."

Larry Gambone said...

Ducky, we must not conclude that CB is a neo-liberal. He is an anarcho-capitalist which is a different kettle of fish. However, the neo-liberals mined the Austrian School for ideas that they then used as rationalizations for destroying social welfare and labour - while at the same time, contradictorily using the government to build up the corporate state. Anarcho-capitalism has its own problems, of course, which I will not go into here. Needless to say, the vast majority of anarchists do not consider it a form of anarchism, seeing anarcho-capitalism as an oxymoron.

Anonymous said...

Marx outlined a humanist conception of communism, influenced by the philosophy of Ludwig Feuerbach and based on a contrast between the alienated nature of labor under capitalism and a communist society in which human beings freely developed their nature in cooperative production.

NOT based upon "cooperative production"


Who needs money, right Gambone? Who needs Government. Let the "cooperation" develop "freely"....

Now, let's All go sing Kumbaya!!!!!!!!!!

Talk about somebody who doesn't understand SHIT about Marx... that's YOU, Gambone!

Larry Gambone said...

Yeah, I don't know shit about Marx alright. I have only read Capital Vols 1, 2, and 3, the 1844 Manuscripts, the Holy Family, Poverty of Philosophy, Critique of Political Economy, as well as many volumes of the collected correspondence. Of course I have only read selections from the Grundrisse, and managed to finish only one volume of the 3 volume Theories of Surplus Value, so I guess there is where my massive ignorance must lie. Nowhere in all of this did I find any reference to statism equaling socialism, he only referred to it as cooperative production or some variant on that concept such as "the free association of the producers."

Anonymous said...

...and NONE of it stuck! Next time, try staying off the drugs...

Frank Partisan said...

Pagan: I think your point about transparency is good. I would take it farther. If a corporation claims to need bailout money, its book should be allowed to be fully examined, and checked for hidden money, fraud etc.

Bob: Expect more regulation. This is an international crisis. The European countries are collectively demanding more regulation from the US.

CB: I can show you an essay written by Marxist Alan Woods, written in 1999, that has a totally up to date analysis of this crisis.

I read a report at, the think tank on geopolitical issues, about the international community, is demanding more regulation of the US economy. They still will stay on the dollar standard. Sarkozy openly said, this is the endof the US unregulated economy. Iceland had 100% unregulated banks.

The ejido system is based on old fashion fashion farming. A farmer today is not a farmer of 1932.

Venezuela's nationally owned oil country, has deals all over latin America. They are working out a deal with China.

Hugo Chavez provided heating oil, to Alaska for the poor.

Larry; You know more about Marx, than many Marxists.

Now we have a whole country bankrupt, Iceland. It had 100% private banks. This is the obvious death of Reaganism, and the inaction of the IMF etc. shows neoliberalism in death agony.

FJ: Don't be contrary for the sake of being contrary, it's unbecoming.

Ducky: Obama will preside over an economy with stagflation.

Interesting the lack of response, from international groups as IMF and World Bank.

Interesting see how he deals with the Mexican border.

Craig Bardo said...


Interesting article. Two observations. I share the author's disdain for Keynes, central banks and a manipulative monetary policy. This would include, what Larry would call, state capitalism, which, by the way, is the only way a monopoly can be created.

However, the author points to this things as critiques of capitalism, rather than what they are, state intervention in the private markets.

Nouriel Roubini, Nassim Taleb, Arthur Laffer and Stephen Moore also predicted this, citing state manipulation as the cause.

Sarkozy and others are engaged in wishful thinking knowing that their economies can only survive if ours does and we continue, to among other things, provide a reserve currency and military defense of Europe.

I'll get back to Mexico and Venezuela later, I'm sleepy.

Anonymous said...

Sorry Ren, I can't help myself.

Emerson, "Conduct of Life, Beauty"

The boy had juster views when he gazed at the shells on the beach, or the flowers in the meadow, unable to call them by their names, than the man in the pride of his nomenclature.

? said...

poor mexico indeed!

Graeme said...

hey Ren, a bit off topic, but have you seen this?

It's a good read.

Frank Partisan said...

Graeme: I have it bookmarked.

FJ: I think Larry will get a laugh out of that.

CB: Europe is not against the dollar standard or the world leadership of the US economy, but they demand regulation. You should read Pure analysis from ex-CIA, with active contacts.

SecondComingOfBast said...

"Europe is not against the dollar standard or the world leadership of the US economy, but they demand regulation. You should read Pure analysis from ex-CIA, with active contacts."

Good, that tickles me to death. I hope they demand in no uncertain terms that the US adopt all the regulations the Europeans have, and enforce them in the exact same way, and I hope our politicians accede to their demands no matter what any US citizens say.

In the meantime, I'm going to start investing all of my money in ropes, tar, feathers, and any commodity that can be used for bomb-making. Then I'll just hole up in my cellar until I become the world's first trillionaire.

Unknown said...

Greetings from México. Things are going from bad to worse down here.

The abuse by the power elite (political and economical) has been and continues to be rampant. Just today, the government bailed out several prominent companies that lost millions on dollars on the speculative market. There is no sign of them bastards bailing out the MILLIONS of Mexicans living in misery!

I see no solution to it. Revolutions in this country have only put a different set of crooks in power. I'm sure that Mr Obrador will be no different, if he ever succeeds. Sorry, but I'm feeling rather hopeless at the moment... and very, very angry.

Frank Partisan said...

Pagan: Because of globalization, the US crisis is spreading all over the world. It should be no surprise that Europe has an opinion. They see it as the end of Reaganism.

Esteban: Thank you for visiting.

The most radical layers of Mexico's working class support Obrador. He and his party are reformist, but provide a base, to call for more radical measures.

It is not at all hopeless. One of the most radical happenings this decade was in Mexico, the Oaxaca struggle. That showed Mexican workers, will rise up, under the right conditions.

See this.

SecondComingOfBast said...


"Because of globalization, the US crisis is spreading all over the world. It should be no surprise that Europe has an opinion. They see it as the end of Reaganism."

Actually, you came close to hitting the nail on the head. The way I would put it-

Because of globalization it is no surprise that the US crisis is spreading all over the world. I saw this coming some time back.

What is surprising to me is that so many Europeans put up with it, and way too many Americans.

Globalization is to me just another way to "spread the wealth around". The US built up the world's strongest economy in recorded history on the strength of limited and regulated trade, and now our trade deficit is siphoning it away. The only people benefiting from it, the way I see it, are the elites in business and their political cronies.

It's like a bunch of drunken sailors gambling their money away at some seedy Reno gambling dens and whore houses, only its not their money to gamble away.

All the globalization of trade has accomplished is created a shadow internationalist government run by business elites with no oversight, just some winks and nods.

Frank Partisan said...

We don't even know how the bailout money, will be spent.

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