2. Crises: One after another for the life of the system

Monthly Review

Volumn 54, Issue 6, 2002, Pages 47-59

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EID: 0040620480     PISSN: 00270520     EISSN: None     Source Type: Journal    
DOI: 10.14452/MR-054-06-2002-10_5     Document Type: Article

References (8)

1. For a classic treatment of this issue see Paul M. Sweezy, The Theory of Capitalist Development (New York: Monthly Review Press, 1942), 190-216.
2. The role of capital in promoting restructuring in response to stagnation was strongly emphasized in Joyce Kolko's remarkable study The Restructuring of the World Economy (New York: Pantheon, 1988). See also John Bellamy Foster, "Restructuring the World Economy in a Time of Lasting Crisis," Monthly Review, May 1989, 46-55.
3. The role of capital in promoting restructuring in response to stagnation was strongly emphasized in Joyce Kolko's remarkable study The Restructuring of the World Economy (New York: Pantheon, 1988). See also John Bellamy Foster, "Restructuring the World Economy in a Time of Lasting Crisis," Monthly Review, May 1989, 46-55.
4. Quoted in Naomi Klein, No Logo (New York: Picador, 1999), 14.
5. See The Editors, "The New Economy: Myth and Reality," Monthly Review, April 2001.
6. Gindin and Panitch insist that current levels of consumer debt are easily sustainable because of the low cost of servicing the debt due to low interest rates. Here it is useful to listen to Business Week: "If the credit crunch now squeezing business starts to hit consumers, whose spending accounts for two-thirds of gross domestic product, the U.S. economy could wind up in a world of trouble....For lenders, the problem is that consumers are dangerously dependent on today's superlow [interest] rates. When rates fall, the cost of servicing debt should fall, too. Yet the Federal Reserve says that household debt-service payments were more than 14% of disposable income in the first quarter, near the highest level in 22 years. If rates go higher, the burden of debt service will increase. Mortgage Bankers Assn. Economist Phil Colling says that approximately 30% of outstanding mortgage debt has adjustable rates. And about 40% of non-real-estate consumer debt is revolving credit, much of which has adjustable rates. A credit crunch could set in if a rate rise triggers a wave of defaults by holders of adjustable mortgages and revolving credit." Business Week, August 12, 2002, pp. 32-33. For a treatment of class distribution of household debt see The Editors, "Working-Class Households and the Burden of Debt," Monthly Review, May 2000.
7. Gindin and Panitch insist that current levels of consumer debt are easily sustainable because of the low cost of servicing the debt due to low interest rates. Here it is useful to listen to Business Week: "If the credit crunch now squeezing business starts to hit consumers, whose spending accounts for two-thirds of gross domestic product, the U.S. economy could wind up in a world of trouble....For lenders, the problem is that consumers are dangerously dependent on today's superlow [interest] rates. When rates fall, the cost of servicing debt should fall, too. Yet the Federal Reserve says that household debt-service payments were more than 14% of disposable income in the first quarter, near the highest level in 22 years. If rates go higher, the burden of debt service will increase. Mortgage Bankers Assn. Economist Phil Colling says that approximately 30% of outstanding mortgage debt has adjustable rates. And about 40% of non-real-estate consumer debt is revolving credit, much of which has adjustable rates. A credit crunch could set in if a rate rise triggers a wave of defaults by holders of adjustable mortgages and revolving credit." Business Week, August 12, 2002, pp. 32-33. For a treatment of class distribution of household debt see The Editors, "Working-Class Households and the Burden of Debt," Monthly Review, May 2000.
8. Stephen Roach, "The Trees or the Forest," Morgan Stanley, Global Economic Forum 〈www.morganstanley.com/GEFdata/digests/20020624-mon.html〉.