a curious commenter has asked your obedient savant manque
to review an article by the appealing epigone of the now dead grand masters of monthly review magazine
paul sweezy and harry magdoff

http://monthlyreview.org/081201foster-magdoff.php

here is my review ....in brief

(note this piece was written back in october
so first you gotta hack away all the narrative parts
which by now any progressive must know by heart)

the brain at the core is --as might be expected -- old paul s and harry m 's
theory of "secular stagnation 2.0 "

here it is in their acolytes own words :

".. stagnation ....(is) ...the normal state of the monopoly-capitalist economy...
(characterized by ) slow growth ... rising excess capacity and unemployment/underemployment..
..the economic surplus controlled by corporations...... (is)...poured in an ever increasing flow
into an exotic array of financial instruments.... Little of the vast economic surplus... (is) ..used to expand investment,
which remains .. geared to mere replacement (albeit with new, enhanced technology),
as opposed to expansion.... . With corporations unable to find the demand for their output
--a reality reflected in the long-run decline of capacity utilization in industry --
and therefore confronted with a dearth of profitable investment opportunities,
the process of net capital formation becomes ...more and more problematic.
profits ...(are )... increasingly directed away from investment in the expansion of productive capacity
and toward financial speculation "

see its all about ...stagnation.... what lies mine-able in a single word ...i guess
for some heads meme troves unlike mines can never be over worked eh ???

example:
"Stagnation in the 1970s led capital to launch an accelerated class war against workers
to raise profits by pushing labor costs down. The result was decades of increasing inequality"

"accelerated class war " i like the sound of that going the other way .. class war is a two way street ..isn't it ???
but seriously folks ...where's the whole export of capital import of products gig gone to here ???
global empire trans nat corporate style maybe we are assuming a one world closed system model but if so is stagnation theory able to get its chin over the raised bar ??

i doubt it..but in te spirit of comrades to comrades i'll proceed as if there was only amerika ...
first off let my get something cleared up here
i like vintage stuff ..even if its basically patois studded circular isometric gabbling like the following

"the underlying growth of surplus value falls increasingly short of the rate of accumulation of money capital...
...a shift from the “general formula for capital” M(oney)-C(commodity)–M¢ (original money plus surplus value),
in which commodities were central to the production of profits
—to a system increasingly geared to the circuit of money capital alone, M–M¢,
in which money simply begets more money with no relation to production."

but for heaven's sake brothers and sisters
why do our authors here use terms like " surplus value and simple reproduction " and even more to the point
runic florishes like m-c- = m c m prime -> hammer + cycle ..etc
what's this pirate code ????
why use stilted running dog terms and notions from the crumbling temples of the marxicon
when we have perfectly good every day street clothed replacements (and with no loss of precision precision?? what precision owen)
especially in a non sectarian periodical aimed at a general progressive readership ????

to me well.... its no more then clownish mock wizardry worthy of the local shriners club

but back to the substance of things

"stagnation theory "... okay so we ain't accumulatin' any more ...where's the beef ????
maybe stagnation is good
maybe its part of a better whole
maybe its green
maybe its best .. us advanced systems slow our expansion new emerging systems speed theirs up
maybe its the best possible national role we yanks can play in a global process of multi national convergence
(oops i went global again...sorry)
or maybe ---as the greens never tire of pointing out to us---
maybe we don't need no stinking national accumulation round here anymore anyway
maybe all we need is a hyper employment macro policy
which ya i know maybe we don't have
but is that because of stagnation ???

okay indeed its likely if we did have hyper employment
every day on the job stuff would be quite a different arrangement
then we got now ...i mean wages and work would fly up their own ass....
imagine if job offers exceeded job applicants ...!!!!!
"hey straw boss take this three penny opera of a job and shove it .."...
at any rate here's little mag and foster's take away :

" Our argument in a nutshell is that both
the financial explosion in recent decades
and the financial implosion now taking place
are to be explained mainly in reference to stagnation tendencies
within the underlying economy.... a real economy experiencing slower growth,
giving rise to financial explosion
as capital seeks to “leverage” its way out of the problem
by expanding debt and gaining speculative profits
...The overall effect has been a massive increase
in private debt relative to national income..."

okay and ummm err i guess that's a no no ..leverage i mean ...and because.....
well eventually the equity margin gets to be too thin a membrane and come a few bad days at the dice table and pop ...
theres of a sudden the deadly shutter of a proximate system wide credit contraction

but what if hereth enter irv fisher to play dutch boy stuffing the holes with limitless new and safe uncle securities to shift
private wealth to... but that's only more debt if now public debt and more debt only creates the pre conditions
for a next time debt crisis and that next time eventually must be "a major crisis of the financial system (which) ... "
ta taaaa "..overpowers the lender of last resort "
i repeat the punch line "overpowers the lender of last resort " ie uncle fed ...
parathetically these are almost paul krugman's exact words

"our main line of defense against recessions — the Federal Reserve’s usual ability to support the economy by cutting interest rates — has already been overrun. The Fed has cut the rates it controls basically to zero, yet the economy is still in free fall. "
http://www.nytimes.com/2009/02/06/opinion/06krugman.html?_r=1&partner=permalink&exprod=permalink


well the day of doom sounds and we're off down the rabbit hole we go .. on a now unstoppable fisherian deflation spiral
as income gets diverted from spending on new products to an attempt to fill in the deepening debt trap prices and wages fall
and since by assumption the trap is deepening faster then we can fill...

the cat chases its own uncatchable tail till it turns itself into a grease spot

in the article's words
".. the whole precarious financial superstructure .. grown to such a scale
that the means of governmental authorities, though massive,
are no longer sufficient to keep back the avalanche,..."

ya ya ya this amounts to the old maxim there's always a weight too great to hold
but is this really such a gig ???
sure eventually something that keeps getting heavier will ...
but this all paper gang what are we talking about ?? it can be rendered weightless if we so desire
an over powered fed ??? because macro policy is suffering what ?? ..a failure of horse power or just of will power ???
why not a peaceful clever massive fisherian debt restructuring ??
let me indulge some jargonation here ...are vital klass interests of the hegemonic class at stake here ??
would a full fisherian fix wreck the main gig ... "over power " the system's ruling klass ????

okay ghost buster jargonian hiccups like the monstrosity above true or untrue
hardly move us a single centimeter closer to the answer we need if we want to not just understand but change

question numero uno oughta be :
does this crisis have a solution reachable from inside the system itself ??

let me caution those who say no--- at least a scientific socialist hearty proletarian nyet of a no ---
with the memory of the stinking THIRD PERIOD blooper http://en.wikipedia.org/wiki/Third_Period
don't ever count kong out on his feet


at any rate if despite my caveat you still wanta get intoxicated
on a longer swig of this here back yard still 180 proof histo-mat elixir

feature this :


"Stagnation in the 1970s led capital to launch an accelerated class war against workers
to raise profits by pushing labor costs down. The result was decades of increasing inequality"
and yet
"household consumption continued to rise from a little over 60 percent of GDP in the early 1960s to around 70 percent in 2007."

"... a constant ratcheting up of consumer debt. Household debt was spurred,
particularly in the later stages of the housing bubble,
by a dramatic rise in housing prices,
allowing consumers to borrow more against their increased equity...
household debt increased from about 40 percent of GDP in 1960
to 100 percent of GDP in 2007"

"The deleveraging of the enormous debt built up during recent decades
is now contributing to a deep crisis.
Moreover, with financialization arrested there is no other visible way out for monopoly-finance capital.
The prognosis then is that the economy, even after the immediate devaluation crisis is stabilized,
will at best be characterized for some time by minimal growth,
and by high unemployment, underemployment, and excess capacity. "

yup aggregate effective demand can be raised by offering jobholders looser bigger credit lines
instead of higher wages only up to a point
push it too far too fast as we've seen recently
base it on a house lot bubble and pop ...
in sum if macro policy begins to rely on this method too fully
if it becomes ".. quantitatively the most important stimulus to demand.
unavoidably..(there will be).. a day of financial reckoning and cascading defaults."

yes indeed if wages fail to rise fast enough to keep up with household debt obligations
once the lot ponzi stumbles bingo a crisis
but why can't we inflate our way out of here anymore ??
okay nominal house lot prices must fall but why can't nominal wages rise ???
why can't the ass hole innocent widow and orphan petty rentiers
holding all the old maid inventory of existing dollar debt take the hit ???

so long as real wages don't rise up to squeeze profit margins
but thats what price increases are for fool
again we're not talkin real here man we're talkin purely nominal

but little mag and foster sez

" financialization(their word for the paper pyramid ) is so essential to the monopoly-finance capital of today,
that ...a “euthanasia of the rentier” cannot be achieved—
in contravention of Keynes’s dream of a more rational capitalism—without moving beyond the system itself."

there you have it flat out can't get there from here
at some point like maybe now "the system" becomes incapable of a solution internal to itself
but proof by assertion is for show trails boys
why is this escape hatch not availible ???
why
when the paper pandemonium whurls out of control
instead of letting the system sponaneously try deflating asset prices to conform with product prices and wages
and only send product prices and wages down with em
why not inflate the product systems prices and wages up to the level of the paper assets ???
what sinister klass forces would scotch this and why ???
rentiers ?? please they are right now taking a thumping already

questions questions questions

instead of answering these obvious questions we get this seductive gibberish

"U.S. financial profits have deviated from the mean over the past decade on a cumulative basis…
The U.S. Financial sector has made around 1.2 Trillion ($1,200bn) of ‘excess’ profits
in the last decade relative to nominal GDP… So mean reversion
[the theory that returns in financial markets over time “revert” to a long-term mean projection, or trend-line]
would suggest that $1.2 trillion of profits need to be wiped out
before the U.S. financial sector can be cleansed of the excesses of the last decade"

i really won't try to untangle it but i smell wagnerian confusions galore here
phantom flows playing the scheinvert villains magic wealth towers taking the rap for
the crimes of stock rings and stock rings playing the police department chasing the phantom flows ....
cats rbark dogs meow mice roar ...the cow jumps over the moon

to be fair much of use can be rescued from this midden heap of marx-think but
my children i grow weary of honest toil so i'll not press on any further right now
i'll just sign off as it were in media res
with a see you next time compadres
and with a slightly trim-ed up
version of our headliners from the little mag and foster show's
lovely next year in jerusalem type coda

"If ... elementary prerequisites of any decent future look impossible under the present system,
then the people should take it into their own hands ...turn it all inside-out ... create a more rational social order.
... ...seize control of .. political economy,...replace the present system of capitalism with ...socialism"