Economic Crisis (from 2008 to June 2020)

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critisticuffs's picture
Joined: 20-12-13
Sep 12 2020 12:16
Economic Crisis (from 2008 to June 2020)

We're translated and adapted a piece by Groups against Capital and Nation on the economic conditions when Covid-19 hit:

It is meant as a gentle introduction to the crises and weird growth since 2008.

The motivation for this seminar is the economic crisis that developed from Spring 2020 and the Government's countermeasures. Initially, the idea was to look at the individual measures taken by governments and central banks and to explain what they intend to achieve, what they are reacting to objectively, how they are financed and what the consequences will be. This was meant to be quite accessible.

This project is complicated not only by the fact that there is a lack of technical expertise about the banking world, but also because the issues involve advanced considerations about capital and that we must always ask ourselves whether the purpose intended by the actor (e.g. lowering key interest rates promotes economic growth) is also the one that is objectively achieved by the measure.

For these two reasons, this text takes a different approach: It attempts to explain, as easy as possible, the interlocking of capitalist exploitation, finance capital, state budget policy and monetary policy both in the normal course of the economy and in times of crisis.

For this purpose, we will go back to the beginning of the Great Recession (2007-2009), because it is an excellent way to show step-by-step how the different layers build on each other, support each other or, if necessary, produce trouble for each other.2 This has a didactic reason: the chronology of the Great Recession can be used to explain in a comprehensible way, as well as possible, the individual measures that are being used with increased force in the current crisis. Anyone who understands the actions of the states and their central banks during the Great Recession will find it easier to keep track in the current situation.

The other reason is that this lead-up time seems to be necessary to understand the current crisis. Not simply because it is always necessary to explain the past in order to understand the present (then one could also start in 1600); but because the crisis of 2008 never ended but has kept on taking on new forms. Against this backdrop, there is now an economic crisis due to a new impulse – the measures taken during the Corona pandemic, which are depressing business. The thesis: in 2020, new crisis mitigation measures are adopted on the basis of a crisis situation in the global financial system that has lasted for the last decade. Hence the structure of this text is:

In Part #capitalist-production we give some general considerations about the market economy without considering credit. This is not intended to be a complete explanation, but to highlight aspects that are relevant to the matters that follow.
In the large middle section (Part #economic-cycle-2008-2020), the years 2008 to the end of 2019 are used to explain what the various crisis events say about capitalist society and how states tried to stop or mitigate the crisis.
In the last part, the new economic crisis since February/March 2020 is briefly described (Part #corona-pandemic) and an overview is given of how states are responding (Part #countermeasures). This should then be understandable with the explanations in the middle section. Finally, a brief conclusion is given with reference to current forecasts in the financial press (Part #conclusion).