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HOW TO SOLVE THE CRISIS?

HOW TO SOLVE THE CRISIS?. Dr. Zoltan Pogatsa. V or W shaped ?. L-shaped : Corporate capitalism Corporate party financing State capture Unsustainable corporate , household and state finances Crisis. Rate of profit. Marx: falling Reality : growing

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HOW TO SOLVE THE CRISIS?

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  1. HOW TO SOLVE THE CRISIS? Dr. Zoltan Pogatsa

  2. V or W shaped? L-shaped: • Corporatecapitalism • Corporatepartyfinancing • Statecapture • Unsustainablecorporate, household and statefinances • Crisis

  3. Rate of profit Marx: falling Reality: growing Question: WHO WILL BUY THE PRODUCTS?

  4. Answers • Mediatisedconsumerism • Borrowingfromthefuture (debt) • Riddingthestate of resources (taxcuts, offshore) • Geographicalexpansion (CEE, China, BRICS) • Environmentaldegradation • War

  5. Mediatisedconsumerism

  6. RIDDING THE STATE OF RESOURCES

  7. EVER SMALLER STATE Becauseit is „toolarge”

  8. Financial deregulation(Johnson & Kwak „13 Bankers”)

  9. Banking compensation

  10. Securitization

  11. Offshore (Shaxton: Treasure Island) TaxJustice Network Financial Secrecy Index: • US • Luxemburg • Switzerland • CaymanIslands • UK • Rich individualsin offshore: a completeyearly US GDP • Corporations: Vodafone, Google, Enron, Wizzair, CBA….

  12. War

  13. Sovereignindebtedness

  14. Householdindebtedness

  15. Geographicalexpansion • CEE, BRIC, etc. • New consumersforcorporations • Cheaplabouroffshoringforcorporations

  16. ENVIRONMENTAL DEGRADATION

  17. Responsesso far • Anticyclicalfiscalexpansion • Monetaryeasying (QE1&2, ECB) • Austerity (Stiglitz, Soros, etc.) • No regulation • No sustainability

  18. Whydon’tpoliticiansact? Finance Chris Dodd, Chair of Senate Banking Committereceived $2.9mn fromsecuritiesindustryin 2007-2009, more thanthreetimesanysenatorwhowasnot a presidentialcandidate. („13 Bankers”) Defense Lockheed Martin is thebiggestcampaignsponsor of BuckMcKeon (chair, Congress Military ForcesCommitee) and Daniel Inouye (chair, Senate Military ProcurementCommitte).(Hartung „Prophets of War”) Offshore Lord Ashcroft, Chairman of UK ConservativeParty is a taxcitizen of Belize. Revolvingdoor Robert Rubin (Goldman>Glass-Stegall>Citi), Dick Cheney (Halliburton)

  19. Howtosolvethecrisis? Cutthe nexus betweencorporations and government.

  20. GREECE

  21. Greekstatenotbig!

  22. Revenuesideproblem!

  23. Greece • 3-5% of GDP in Offshore (mainlyCyprus) • Military expenditure: EU countriessold €1bn worth of military toGreecein 2010 • Wouldneed 6-8% growthtoget out of sovereigndebttrap • Willnothappenwith 5th wave of austerity

  24. Cheaplendingin€uro

  25. €urozonenot an optimalcurrencyarea

  26. Not a productivityissue!

  27. But a wageissue!

  28. Germanybenefittedfrom€z

  29. Greece had deindustrialisedin free trade

  30. THANK YOU! pogatsa@gmail.com

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