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Addressing Economic Crisis: Analyzing Corporate Capitalism, Debt, and Policy Solutions

This comprehensive analysis by Dr. Zoltan Pogatsa delves into the multifaceted crisis facing global economies, exploring concepts of corporate capitalism, state capture, and unsustainable finances. Highlighting the challenges of falling profit rates, inadequate consumer purchasing power, and mediatised consumerism, the paper also examines the impact of geographical expansion and environmental degradation. It urges a reevaluation of the government-corporation nexus, proposing solutions such as anticyclical fiscal expansion and financial regulation, and draws on case studies including Greece's economic struggles.

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Addressing Economic Crisis: Analyzing Corporate Capitalism, Debt, and Policy Solutions

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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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