Recession

The inequality generated by decades of neoliberalism and the resentment it has caused across the world have in recent times led to uncertainties that only intensify the fear of recession.

• Growth is decelerating worldwide, including United States which is experiencing 50-year low unemployment rate. China lost momentum with industrial growth at a 17-year low. Prospects for the third quarter are gloomy as well.
• The performance of major economies affects the rest of the world economy. For example, depressed Chinese demand caused the fall in Thailand’s second quarter growth rate to the lowest since 2014. 
• Scattered talk has given way to widely expressed fears of an impending recession affecting financial investment behavior, with investors dumping stocks and shifting to government bonds, resulting in a slump in stock markets.
• The deeper malaise is the depressed demand due to extreme inequality in assets and incomes that has resulted from decades of neoliberal growth across the developed world. Globalization moved productive activities to cheap labor locations had depressed wages across countries with large profits for a few and tax concessions for the rich have accentuated inequality.
• Incomes in the top percentile have exploded, those in the middle and lower ranges have  stagnated sapping consumption demand. Growth came by finding ways of stimulating demand not depending on current income, but driven by credit. That, beyond a point, is not sustainable and the fear of another recession is likely.
• The USA-China trade war and other countries responding with similar measures, the world is faced with a proliferation of beggar-thy-neighbor policies that makes a bad situation worse. The unknown consequences of Brexit cannot be anything but adverse. These uncertainties intensifies the fear of recession.
• The challenge for capitalism was finding an alternative way of reviving demand depressed by underlying inequality. In the past the states used to step in to lift economies out of recession with their spending for a short a time. With neoliberalism that has shrunk the revenues of the state and public spending being is mostly debt-financed, this option was shunned. The only way to drive private demand is with credit in the form of near zero interest rates and getting central banks to hugely increase liquidity in the economy.
• Capitalism’s current predicament arises because this policy has not worked, though it has been experimented with very low interest rates and in some countries even have turned negative. While this policy has not delivered growth, it has encouraged speculation financed with cheap credit. This has led to accumulation of corporate debt as firms borrowed mainly to speculate in financial markets and pay off their rich shareholders with costly share buybacks resulting in asset price inflation and financial fragility. But with low growth central banks were compelled to continue this policy regime.
• But as the threat of recession looms, erstwhile advocates of fiscal prudence and austerity such as the IMF are calling for adding fiscal stimuli to the policy mix. Infrastructure upgrades, expanding public housing stocks and targeted tax cuts should all be considered. This is the recipe for a return to more robust growth and inflation.

The recession threat is immediate and policy is likely to respond too slowly. If the recession does set in, it can be devastating. In 2008 China, Germany and India were affected less and this time they are among the countries whose performance could drive the recession. Corporate debt often denominated in foreign currencies at high levels, a recession would find many debtors defaulting on payments and forced to sell assets. That could result in asset price deflation and will have reverberations in an over-committed financial sector. Only a set of freak occurrences can prevent another recession.

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India's Freedom & Liberalisation

• India was at a crossroads 70 years ago when it made choices that were enshrined in the constitution, so that its workers and peasants were freed from class and caste oppression.
• Nehru said at the midnight when India woke up to freedom. “To bring freedom and opportunity to the common man, to the peasants and workers of India; to fight and end poverty and ignorance and disease; to build up a prosperous, democratic and progressive nation, and to create social, economic and political institutions which will ensure justice and fullness of life to every man and woman.”
• The zamindars and landlords finding that open defense of landlord's interest was no longer feasible, switched over to communalism for their class defense.
• Pakistan's falsity of religion-based nationalism and a state was founded on theocracy. It was one area where the Hindu right-wing emulates its sworn enemy and India was sought to be converted into a theocratic state called Hindu Rashtra. 
• M.S. Golwalkar, RSS supreme leader for more than 30 years minced no words: “The non-Hindu peoples in Hindusthan must either adopt the Hindu culture and language, must learn to respect and hold in reverence Hindu religion, must entertain no ideas but those of glorification of the Hindu race and culture…. In one word, they must cease to be foreigners, or may stay in the country, wholly subordinated to the Hindu nation, claiming nothing, deserving no privileges, far less no preferential treatment—not even citizen’s rights.”
• It is no accident that the Hindutva forces had nothing to do with anti-colonial struggle and independence. Infact, the RSS chief M.S. Golwalkar had so little sympathy for the anti-colonial struggle that he thought that the British would have to be invited back shortly after Independence in order to govern India. Today they laud Ambedkar today for sheer opportunistic reasons.
• The first major victim of this narrow cultural nationalism of the Indian right-wing was the Father of the Nation. After being driven to the margins of Indian politics in the wake of Mahatma Gandhi’s assassination, the right wing RSS and its latest political incarnation, the BJP, is at the helm of India, now.
• The slide started post-Nehru and was complete in 1991, when the Congress went back on its promises and ushered in the neoliberal order. The Congress ceased the cause of workers and peasants ostensibly called national interest, but in reality for the material prosperity of the merchants and manufacturers. Now with the BJP unburdened by the legacy of any egalitarian struggle, the free people of India are under the onslaught of neoliberalism and rabid communalism.
• Ambedkar argued that the political equality, guaranteed by the constitution, would get jeopardised if there was no corresponding movement towards social and economic equality. The first setback to independent India's was its inability to carry out any significant land redistribution. The top 15 per cent of landowners continued to hold the same percentage of land area as before. Dalits, the landless class, who had been denied the right to own land under the old system continued to remain landless and therefore both socially and economically disempowered. By the end of the 1950s, Jawaharlal Nehru was worried about growing wealth and income inequality in the country, he has to set up the Mahalanobis Committee to inquire into it.
• The per capita annual foodgrain availability, which had been around 200 kgs at the beginning of the 20th century in “British India” declined to 148.5 kgs during the 1939-44 and even lower to 136.8 kgs in 1945-46, was pushed up close to 180 kgs by the end of the 1980's. It has since declined, over the neoliberal period, reaching 163 kg for the years 2012-14.
• The spontaneity of capitalism was breaking the bounds set by state control. And soon it was to jettison the institute a regime of neoliberalism, under which the domestic corporate-financial oligarchy got closely integrated with globalised finance capital.
• The economic travails of the dirigiste regime arising from the sluggish growth of the home market owing to growing economic inequality, its loss of social support among the people for the same reason, and the big bourgeoisie’s wish to break out of it has contributed towards effecting a transition from dirigisme to neoliberalism.
• Neoliberalism greatly accentuated the increase in economic inequality, though it accelerated the growth rate in the tertiary sector. The acceleration in growth rate was resolved through larger exports of services, larger elite consumption of luxury goods, and the effects of asset price bubbles. The top 1 per cent of households in India currently owns 60 per cent of the country’s total wealth puts India with the fastest increases in asset inequality.
• The process of primitive accumulation of taking over of peasant's land 'for a song' for corporate projects and squeezing the peasants through higher input prices, by withdrawing subsidies and the drying up of institutional credit, but without commensurably higher output prices. These output prices, especially of commercial crops are allowed to fluctuate widely with world market prices. Even phenomena like Demonetisation and the GST are also mechanisms for imposing primitive accumulation upon the petty production sector. 
• A tragic consequence of this primitive accumulation at the expense of peasant agriculture has been the suicides of over three lakh peasants over the last two decades. And large numbers of peasants have left agriculture and migrated to cities in search of jobs, which are not being created to an adequate extent despite the apparently high GDP growth. The net result has been a proliferation of casual employment, intermittent employment, part-time employment and disguised unemployment. The growth in the casualisation of employment and privatisation of public sector units have weakened trade unions. While capital is international, workers are still organised along national lines, making national unions ineffective.
• The middle-class segment that has done well out of globalisation, owing to the outsourcing of services from the metropolis, and owing to the rise in the share of surplus which supports a range of activities from finance to advertising, has expectedly belonged to the upper castes which have been privileged enough to acquire the skills to make use of the opportunities that have been opening up. Since these beneficiaries attribute their own success not to their privilege but to their talent, the inevitable conclusion is drawn that those who are excluded from such jobs are untalented. An impression spreads that children from the oppressed castes do not make it because they lack talent, which boosts casteist prejudice.
• Development in India started on a wrong foot by eschewing land redistribution and the pursuit of capitalist development contributed to growing socio-economic inequality, that got a free run under neoliberalism. The adherents of Hindutva in power this social counter-revolution is being carried forward with a vengeance. India is not a fascist state, but the growing socio-economic inequality is destroying the constitutional provision of political equality.
• Fascism arises when the system besieged by crisis is challenged by a threat from the revolutionary forces whom fascism is used for eliminating. Fascism grows when the system is at a dead end and when the working-class movement is not in a position to mount a challenge. That is when large sections of the people flock to fascist movements, not because it provides a credible way out, but because it projects a messiah, it resorts to flamboyant but meaningless rhetoric, it appeals to unreason, and it holds not the system but the “other” (the Jews or the Muslims or whatever) as responsible for the travails of the people.
• It may seem intriguing that neoliberalism has reached a dead end, Modi promises even greater neoliberal reforms while a Trump rails against neoliberalism. But this contrast between two current manifestations of fascism arises because neither has a coherent programme anyway for overcoming the crisis and the frustration gripping the people. Both are essentially purveyors of unreason for whom the economic agenda as a thought-out rational programme is incidental.
• The corporate-financial oligarchy adopts the fascist movement, finances the fascist movement, and promotes the fascist movement, which exists independently of it. Fascism provides “stability” and also an ideal ideological prop for neoliberal capitalism. Fascists in government represent, in the Indian context, an alliance between corporate capital and Hindutva. The fact that capital is globalised while the state remains a nation state entails that even a fascist nation state must abide by the wishes of globalised capital (to prevent capital flight) and this fact restricts its ability to overcome the crisis.
• At peril are the gains and achievements made by the movements for national independence, socialism and social justice. India is once again is at crossroads where the choices it made 70 years ago are being undermined.

The left and democratic forces can have an alternative agenda that promotes equality, that strengthens democracy, and is willing to withdraw from the neoliberal regime. They should for instance have an agenda of introducing a set of universal, justiciable economic rights, to supplement the political rights that the constitution guarantees. These can include the right to food, the right to employment, the right to publicly-funded free and universal quality health care, the right to publicly funded free and universal quality education up to a certain level, and a right to adequate old-age pension and disability benefits. The implementation of these rights together would cost less than 10 per cent of the GDP annually, which the country can easily afford. 

There comes a time in the life of every nation when it stands at the 

crossroads of history and must choose which way to go ... Lal Bahadur Shastri

Globalization benefits just minuscule percent of population to prosper, who are rich, educated and with access to power & resources. Trickle-down theory that says benefits for the wealthy trickle down to everyone else is unacceptable nonsense. In a large populous country like India, where most people are illiterate & poor, governments ignoring their welfare and chasing money making machines is nothing but abuse of principles of democracy and Constitution of India. Globalization is a concept propounded by developed & educated western countries to expand their reach for marketing their products and services rather than extending helping hand for upliftment of suffering masses in the world. India blindly embracing it for monetary gains, is not only height of insanity but also detrimental to its large segments of population. Development is not facilitating educated and/or rich people to prosper but enhancement of living standards of all classes of people simultaneously.

Neocon - Neoliberalism is a disaster

The cold reality is America's 25 years of neocon-neoliberalism has been great for the top 5% and an unmitigated disaster for everyone else in the U.S. and in the nations it has targeted for intervention. The neocon-neoliberalism of democratic party's 16 years and the republican party's 8 years is a system that benefited the few at the expense of the many. Neoconservatism's malignant spores spread quickly after the collapse of the Soviet Union. It is American exceptionalism turned into a global entitlement to intervene anywhere in the world and defend its interests, and a right to impose their version of democracy and a market economy on other nations. Self-interest melds seamlessly with moral superiority in neocon-neoliberalism. Since it is the best possible system, it is a favor tearing down institutions and imposing the system on others. The self-interest is that the market extracts others resources and benefits their banks and corporations. Is this how "free markets" benefit everyone? The neoliberalism is that it transformed everything for the better when turned into a market. Once buyers and sellers can meet in a transparent marketplace, everybody prospers and everything becomes more efficient. Neoliberalism's markets has features of "real" markets that are rigged to favor those at the top of the wealth-power pyramid. Neoconservatism and neoliberalism are both inherently global, and so globalization is the necessary outcome. There is no market that cannot be skimmed for outsized profits once it has been globalized. Neoconservatism entitles the U.S. to have a "profitable interest" in every nook of the planet. It's in their "interest" to monitor those policy changes in Lower Slobovia and intervene if the policies are "not in their interests." Neocon-neoliberalism is brilliantly evil because it masks its true objectives behind such warm and fuzzy PR. Those looking for enemies of the people will find them not on the streets of America in cartoonish display but in the corridors of financial and policy power.

Profound changes in technology, automation, and geopolitics have influenced finance and wealth, but it cannot be merely coincidental that the incomes and wealth of the top 5% have pulled away from the stagnating 95% in the 25 years dominated by neocon-neoliberalism.