Flash estimate for the second quarter of 2013Euro area and EU27 GDP both up 0.3%
-0.7% and -0.2% respectively compared with the second quarter of 2012
Dry your eyes my little European Union friend. Jubilation in the European Land. Francois get ready, Angela rock steady, As Wolfgang strikes up the band.
Zero point three percent growth and the 18 month recession is over. Just like that. Acabado, finito, gatavas, críochnaithe, Ολοκληρώθηκε, fertig, lest, завършен, done and dusted, färdiga befejezett, gotov, hotový, færdig, готов, afgewerkt, valmis, päättynyt, terminé, pabeigts, gotowy, finisat, končano. Zero point three percent growth compared to the previous quarter. Compared to the previous year, well, the churlish might think the Great Recession is a little ways away from being acabado.
But 0.3% is close enough to growth for government work because the GDP in the first quarter 2013 was 1.1 % below the 2012's first quarter. So things must be getting better, because it's not as bad as it was and as we expected it to be. It's getting less worse more slowly. That's good news.
Pointing out that EU GDP is still about 2% below its 2008 measure-- that's just being, well, churlish. And don't even think about mentioning GDP per capita, you malcontent you.
In the United States, an economy, and with a ruling class, less encumbered than the Europeans by the notion that an economy is anything other than an ATM for a very select clientele, the good news was exactly that-- the ATM was spitting out money for a very select clientele only. The Dow Jones Industrial Average was above 15,000 (operative word-- was). Fracking shale was doing for oil production what fracking shale had done for natural gas production. Petroleum imports were down, refinery profits were up.
Earnings growth, expected to expand some 27 percent in the second half of the year, was being revised downward to 15 percent, but compared to Europe?
However, there were signs, indications that the churlish pointed to..like the 3 month moving average of the rate of growth of exports had moved from 10% during 2012 to 0% in 2013 for the US....and for Germany and China and India and Brazil and Mexico...
...while the generous pointed to the same moving averages for the same period moving from -8% to +8% for Japan and from +10% to -4% to +7% for Great Britain.
Good news, bad news, generous, churlish, optimistic, pessimistic, bulls, bears... it's all the same; that is to say all this good and bad, best of times worst of times is nothing but taking a position in the markets. It's the long and the short of it. It's buying and selling.
2. The determinant of capital, that relation of the labor process to the valorization process is based in the relation of necessary labor time to surplus labor time. The determinant is manifested by labor organized as value-producing, as wage-labor, which has no use other than when engaged by the means of production organized as commodities.
The determinant is oblivious to news good and bad; knowing nothing more than the need for the reproduction of itself; which is to say the accumulation of the means of production as a mass of expanded values which is the condition of labor, the condition of labor organized as a commodity, as value-producing. The circle is complete, even as it breaks apart.
3. Last time around, in the not-so-Great Recession of 2001-2003, the US bourgeoisie confronted, they though, too much. Too much capital, too many fixed assets, too many works, too high wages. So they took a short course in accelerated disaccumulation.
[All figures below either taken directly or developed from the US Census Bureau's Quarterly Financial Report and/or Annual Surveys of Manufacturers]
In the 1Q of 2001, the value of of the net property and equipment (PPE) in manufacturing peaked at $1.177 trillion. By the 4Q 2003, the PPE value had decline to $1.123 trillion. This was not a paper devaluation, a "moral depreciation," but rather involved real consumption of capital; real restraint of capital expenditure; and real decline in the fixed asset replacement rate.
Further, this decline in value was not due to a divergence between the technical composition of capital and its value composition, where the mass of the means of production employed continued to expand, while the value of the means of production declined due to improved efficiency, reduced costs of new fixed assets. We're talking about recession remember. We're talking about capitalism remember. The "thing"-- actually the relation-- to keep in mind is that for capital, value and physical capability are fused, as use and exchange are fused in an antagonistic identity, and are indissoluble. A generalized contraction of capital, generalized overproduction is exactly that antagonistic identity.
The reaccumulation after the recession ended in 2003 was painfully slow, even under the whips of the devalued dollar, the oil price spikes, and the invasion of Iraq. The old 2001 peak in net PPE was not exceeded until the 4Q 2006, after capital spending had to be resumed to replace the capital already consumed, and this itself correlates so neatly with a downturn in the rate of profitability for US manufacturing.
The accumulation of fixed assets continued through the 4Q 2008, one year after the onset of the recession itself. The "lag," this asynchronous aspect to capitalists response to the condition of capital is another expression of capital's tendency to becoming the immanent barrier to the further accumulation of capital-- with the further accumulation of capital being the expression of generalized overproduction.
Anyway, as asynchronous as the processes of accumulation appear to be, sooner or later they all converge, and converge these did once Lehman Brothers was denied admission to the Fed's emergency medical insurance program.
The devaluation of fixed assets in this iteration of generalized overproduction, in this "Great Recession" has been less severe, and of shorter duration than that of the 2001-2003 recession. In that not so great recession the devaluation amounted to 6% of the estimated value or $69 billion. In the Great Recession, the devaluation, 2008 peak to 2010 trough, has been $45 billion; and while it took almost six year, 1Q 2001- 4Q 2006, for fixed asset accumulation to recover completely the value lost, it has taken only two years, 4Q 2008-4Q 2010 during this current period.
What has made the Great Recession "great," is its severity, persistence, expansiveness.. and the ability of the US bourgeoisie to shift almost the entire burden, the entire costs, the entire "loss" of value unto the living component of capitalist reproduction, labor.
Production workers' wages declined 17%, 2007 peak to 2009 trough. Production worker wages in 2011 were still 11% below the 2007 peak. The peak to trough (2000-2003) decline in the previous cycle was 9 percent. Most significantly, that 2000 peak for production workers wages in the US has never been exceeded. As a result the rate of growth of value added to production has declined. Between 1990 and 2000, that growth was 46.5% or about 4% annually. Between 2000 and 2011 that growth measures 16% or about 1.2% annually
What characterizes the contraction in the US is what has characterized the recovery in the US and accounts for the tenuous and shallow nature of the recovery-- the rapid recovery and expansion of fixed assets; or... the failure to devalue enough capital quickly.
What characterizes the contraction in the US is the continuity of that contraction with the overall trend since 2000, the convergence of capitalist recovery and capitalist contraction. In every sense, capital is still grappling with the changes brought about by the applications of advanced technology in the 1992-2001 period; to the changes this has brought to the relations of necessary to surplus labor-time; to the expulsion of labor from the valorization process; to relations between the value components of capital.
S.Artesian
Next: Smooth...And By the Numbers 3.
But 0.3% is close enough to growth for government work because the GDP in the first quarter 2013 was 1.1 % below the 2012's first quarter. So things must be getting better, because it's not as bad as it was and as we expected it to be. It's getting less worse more slowly. That's good news.
Pointing out that EU GDP is still about 2% below its 2008 measure-- that's just being, well, churlish. And don't even think about mentioning GDP per capita, you malcontent you.
In the United States, an economy, and with a ruling class, less encumbered than the Europeans by the notion that an economy is anything other than an ATM for a very select clientele, the good news was exactly that-- the ATM was spitting out money for a very select clientele only. The Dow Jones Industrial Average was above 15,000 (operative word-- was). Fracking shale was doing for oil production what fracking shale had done for natural gas production. Petroleum imports were down, refinery profits were up.
Earnings growth, expected to expand some 27 percent in the second half of the year, was being revised downward to 15 percent, but compared to Europe?
However, there were signs, indications that the churlish pointed to..like the 3 month moving average of the rate of growth of exports had moved from 10% during 2012 to 0% in 2013 for the US....and for Germany and China and India and Brazil and Mexico...
...while the generous pointed to the same moving averages for the same period moving from -8% to +8% for Japan and from +10% to -4% to +7% for Great Britain.
Good news, bad news, generous, churlish, optimistic, pessimistic, bulls, bears... it's all the same; that is to say all this good and bad, best of times worst of times is nothing but taking a position in the markets. It's the long and the short of it. It's buying and selling.
2. The determinant of capital, that relation of the labor process to the valorization process is based in the relation of necessary labor time to surplus labor time. The determinant is manifested by labor organized as value-producing, as wage-labor, which has no use other than when engaged by the means of production organized as commodities.
The determinant is oblivious to news good and bad; knowing nothing more than the need for the reproduction of itself; which is to say the accumulation of the means of production as a mass of expanded values which is the condition of labor, the condition of labor organized as a commodity, as value-producing. The circle is complete, even as it breaks apart.
3. Last time around, in the not-so-Great Recession of 2001-2003, the US bourgeoisie confronted, they though, too much. Too much capital, too many fixed assets, too many works, too high wages. So they took a short course in accelerated disaccumulation.
[All figures below either taken directly or developed from the US Census Bureau's Quarterly Financial Report and/or Annual Surveys of Manufacturers]
In the 1Q of 2001, the value of of the net property and equipment (PPE) in manufacturing peaked at $1.177 trillion. By the 4Q 2003, the PPE value had decline to $1.123 trillion. This was not a paper devaluation, a "moral depreciation," but rather involved real consumption of capital; real restraint of capital expenditure; and real decline in the fixed asset replacement rate.
Further, this decline in value was not due to a divergence between the technical composition of capital and its value composition, where the mass of the means of production employed continued to expand, while the value of the means of production declined due to improved efficiency, reduced costs of new fixed assets. We're talking about recession remember. We're talking about capitalism remember. The "thing"-- actually the relation-- to keep in mind is that for capital, value and physical capability are fused, as use and exchange are fused in an antagonistic identity, and are indissoluble. A generalized contraction of capital, generalized overproduction is exactly that antagonistic identity.
The reaccumulation after the recession ended in 2003 was painfully slow, even under the whips of the devalued dollar, the oil price spikes, and the invasion of Iraq. The old 2001 peak in net PPE was not exceeded until the 4Q 2006, after capital spending had to be resumed to replace the capital already consumed, and this itself correlates so neatly with a downturn in the rate of profitability for US manufacturing.
The accumulation of fixed assets continued through the 4Q 2008, one year after the onset of the recession itself. The "lag," this asynchronous aspect to capitalists response to the condition of capital is another expression of capital's tendency to becoming the immanent barrier to the further accumulation of capital-- with the further accumulation of capital being the expression of generalized overproduction.
Anyway, as asynchronous as the processes of accumulation appear to be, sooner or later they all converge, and converge these did once Lehman Brothers was denied admission to the Fed's emergency medical insurance program.
The devaluation of fixed assets in this iteration of generalized overproduction, in this "Great Recession" has been less severe, and of shorter duration than that of the 2001-2003 recession. In that not so great recession the devaluation amounted to 6% of the estimated value or $69 billion. In the Great Recession, the devaluation, 2008 peak to 2010 trough, has been $45 billion; and while it took almost six year, 1Q 2001- 4Q 2006, for fixed asset accumulation to recover completely the value lost, it has taken only two years, 4Q 2008-4Q 2010 during this current period.
What has made the Great Recession "great," is its severity, persistence, expansiveness.. and the ability of the US bourgeoisie to shift almost the entire burden, the entire costs, the entire "loss" of value unto the living component of capitalist reproduction, labor.
Production workers' wages declined 17%, 2007 peak to 2009 trough. Production worker wages in 2011 were still 11% below the 2007 peak. The peak to trough (2000-2003) decline in the previous cycle was 9 percent. Most significantly, that 2000 peak for production workers wages in the US has never been exceeded. As a result the rate of growth of value added to production has declined. Between 1990 and 2000, that growth was 46.5% or about 4% annually. Between 2000 and 2011 that growth measures 16% or about 1.2% annually
What characterizes the contraction in the US is what has characterized the recovery in the US and accounts for the tenuous and shallow nature of the recovery-- the rapid recovery and expansion of fixed assets; or... the failure to devalue enough capital quickly.
What characterizes the contraction in the US is the continuity of that contraction with the overall trend since 2000, the convergence of capitalist recovery and capitalist contraction. In every sense, capital is still grappling with the changes brought about by the applications of advanced technology in the 1992-2001 period; to the changes this has brought to the relations of necessary to surplus labor-time; to the expulsion of labor from the valorization process; to relations between the value components of capital.
S.Artesian
Next: Smooth...And By the Numbers 3.
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