By Lofty depression-2: true dip is yet to come

Go to the "Great Depression 2": this fall is yet to come…Representatives of the "pillars" of modern economic and financial system, which, of course, refers International monetary fund, about a crisis always read as very reluctantly, and, most importantly, in a very specific context. Specifically, he's about to end, it's all local, "banal" cyclic tasks that were spent to little excess amount of debt … And so on, and so similar.

None of them ever publicly did not analyze the relationship of excess debt, and, most importantly, the scale of its rise, with credit facilities and the standard of living of people in general, the phenomenon of the "middle class." No one compared the scale of real income of the population in the "developed" countries with their costs and, even more so, not studied the effects of the gap between those with 2 indicators. Gap that grew up without annoying before the "acute" phase of the crisis in the autumn of 2008.

But here, in the end, the head of the IMF was obliged something to say on this topic. Christine Lagarde, the IMF managing director, speaking in the United States, which is called, has come off. In this case immediately to the maximum. No to clarify that this crisis, all the same, not repeating that he has some special features that can give a sudden, from the standpoint of "meynstrimovskoy" monetarist theory implications. No, she immediately compared what is happening now in the world economy since the "Great" depression and identified: "There is no longer the world's economies, including the poorest, developing and advanced countries, which would have immunity to the crisis." And, accordingly, called on "all countries, irrespective of municipal and political system or religion, to merge to deal with the crisis."

This, of course, very sensual, but, frankly, not very appropriate. Depression, including the second "The Great" (first, we recall, was after the collapse of 1907 and lasted in the U.S. until 1914, the beginning of World War I) depression of the twentieth century, can begin only after the collapse of the end . Roughly speaking, the depression — is a prolonged crisis bottom. If it has been repeated, the "bottom" is usually not more than a couple of blocks, well, the maximum a year. But if the crisis was structural, in other words, the decline was caused by the fact that the mechanism did not operate (from time to time — artificial) to stimulate economic growth, which and caused the imbalance, the depression can be quite longish — until a new engine of economic growth.

And here it is worth recalling the chronology of the crisis 30s. In the 20 years in the U.S., as well as for the moment, was to stimulate private demand, however, only a 2-narrow sectors of the economy: land speculation, and speculation on the stock exchange. Both of these speculations have made asset bubbles, with the first burst in 1927, and the second — in the autumn 1929 (the famous market crash). But by March 1930 Exchange played for more than half of the decline in October-November 29, it seemed that the worst is behind. And in that moment began the fall of personal demand, which lasted until the end of 1932. The rate of fall was about 0.8-1% of GDP for the month — so that the total decline over this period was about 30% of the initial level of the economy.

We have the same spring of 1930, the decline began in September 2008, he is then, and passed by a deflationary mechanism, since he was called the reduction in aggregate demand. But in 2008, the U.S. monetary authorities have begun an active monetary emission pumping (which is not done in 30 years), while that surprisingly, its scope were just about 1% of GDP for the month! Who would ever think about. As a result, the crisis could barely stop. Slightly — because of the economy crisis lasted processes, aggregate demand continued to fall, the Obama administration, even for its support to increment the budget deficit by one trillion dollars in year. That, incidentally, is equivalent to an increase in real disposable income by about 10%! And despite this, the demand continues to fall. What will happen when the ability of the U.S. budget to improve the shortage will be exhausted, everyone can imagine for themselves — the fall of the country's GDP by 10% will be in effect automatically. But the process does not stop.

This is the main place in which I do not agree with Lagarde. "The Great" depression started after the recession, which in the current crisis has not yet occurred. Since the pumping demand in the 80 — 2000s was much higher than in the 20 years of the last century, the recession may last longer and than 2.5 years, as it was then. Anyway, now the demand is higher than the real disposable income by about $ 3 trillion dollars in year, and after a fall in demand revenues will also fall. According to our calculations, the final amount of demand will be lower than today's 6 trillion a year, which is a decline of the U.S. GDP from its pre-crisis value by 55-60%, but this, of course, only an estimate, not to mention the fact that the associate of GDP before the crisis and after it is in general quite difficult in the economy will be very different structure. Namely, at the end of the crisis sharply reduced fraction of monetary sector in the U.S. economy.

Given the fact that in the 30 years of the last century decline was less than 40% (in this case for a long calculations were more impartial, as the structure of the U.S. economy has changed considerably smaller then), in our time, the crisis will be much stronger. And this is the second place, in which I do not agree with Lagarde — we do not expect a repetition of the crisis 30s, and a much more severe crisis, the biggest since the emergence of capitalism in the world. Furthermore, its scale is so large that inevitably affect the social and political structure of the big capitalist countries, which 80 years ago was not.

And, in general, I am pleased that the management of the IMF, in the end, spoke a loud what previously read afraid. Even after realizing what scale phenomena with it encountered. And the calls for a "joint struggle" I see exactly how sensual cry, addressed, in fact, in the air: who and how can suspend this structural crisis? While demand and revenues are balanced, any samples to stop the process and only fools will lead to serious consequences for themselves activists. But then you can not just keep quiet — so there can be only Lagarde posoboleznovat.

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