Economic crisis continues

Bailout hilarity, cartoon by Mikhaela

This is Bailout hilarity, a cartoon by Mikhaela from the USA.

The economic crisis continues.

Britain: Crisis, the national charity for single homeless people, yesterday warned of a potential surge in homelessness in 2009 as it opened the doors of Crisis Christmas to hundreds of homeless people: here.

Toyota losses highlight global auto collapse: here.

India: Honda workers wage tenacious struggle to defend their jobs: here.

USA: GM closes plants in Wisconsin and Ohio: here.

U.S. officials are bringing far fewer prosecutions as a result of fraudulent stock schemes than they did eight years ago, raising questions about lax oversight: here.

Recent press reports make clear that the Madoff affair is not an aberration. It is indicative of pervasive fraud and criminality in the highest echelons of the financial establishment, aided and abetted by government regulatory agencies: here.

Australian bank fiasco—a warning of “tougher times” ahead: here.

5 thoughts on “Economic crisis continues

    8th Congress

    Hyderabad, India, 14-16 December 2008

    Final Communiqué

    The 8th Congress of the Afro-Asian Peoples’ Solidarity Organisation (AAPSO) held in Hyderabad, India, from 14th to 16th December 2008, hosted by the All India Peace and Solidarity organization (AIPSO) was attended by delegates from 25 countries after a gap of 20 years. Having entered the 51st year of its founding in 2008 as one of the oldest and broadest peoples’ organization that has played a historic role in mobilizing peoples of Asia and Africa to tackle the problems that confronts the Third World nations in the second half of the 20th century, the AAPSO Congress affirmed its intention to reinvent itself to meet the new challenges posed by imperialism for the peoples of Africa, Asia and Latin America in the 21st century.

    The 8th Congress of AAPSO deliberated on various issues including: (a) Financial Crises and its Impact on Developing Countries; (b) Against the Policy of Aggression, for Peace and A Nuclear Weapon Free World; (c) NAM, South-South Cooperation and Solidarity with the People of the South; (d) Climate Change; and (e) Organizational Issues. After due deliberations on the above issues, the 8th Congress of AAPSO has resolved as follows:
    Financial Crises and its Impact on Developing Countries:

    The Congress notes the unprecedented magnitude of the global financial crisis triggered by the bursting of the real estate bubble in the US economy and the subsequent economic recession. The Conference while welcoming the possible roll back of the Wall Street model of neo-liberal globalization and weakening of the hegemony of international finance capital, also expresses its deep concern over the adverse impact of the global economic crisis on the working people across the world. The Conference however, recognizes that unless there is a strong and united movement of the people in the developing countries together with the progressive forces in the developed world, the burden of this crisis will be imposed disproportionately on the poor, vulnerable and disadvantaged sections of the people.

    These events, which are being compared to the Great Depression of the 1930s is engulfing the financial sector of the US and other advanced economies, highlights the destabilising character of international finance. The Congress notes that a key aspect of imperialist globalisation has been financial liberalization, With the financial crisis and the consequent downturn in the US economy, the sustainability of the global growth process has also become questionable.
    The global financial crisis is a result of the financialisation of the global economy and at the expense of real production, is now affecting the real economy. The crisis is a serious setback to the neo-liberal dogma, which has dominated the world since the 1980s. The effects of the crisis on the people in different countries should provide the basis for the working class and all sections of the working people to organise and fight back to reverse the neo-liberal policies.

    The world credit crunch following the financial crisis, coupled with a protracted recession in the US and other advanced economies and decline in the US economy will lead to efforts by other advanced and developing countries to find a way out of the crisis can strengthen the trend towards multi-polarity. With faith in the “free market” getting eroded considerably following the financial meltdown, the hegemony of neoliberal policies will be challenged.

    The structure of centralising the production and distribution system with global MNCs at the helm helped to fracture and roll back national development projects across the globe. With the debt crisis of the 1980s, export-oriented models of development were imposed by the International Monetary Fund (IMF) and other financial institutions on most countries in the South.

    The Congress notes that this unfolding social crisis resulting from the economic recession has triggered the threat of mass unemployment, inflations and melt down of their currencies in the countries of the South. Countries facing potential collapse will be forced to approach the IMF and which in return will demand the fulfillment of stringent economic conditions. The most likely immediate outcome is a hardened, more authoritarian state that seeks to restore profitability through ratcheting up repression and forcing people to accept the loss of jobs, housing, and any kind of social support. In the South, this will inevitably mean more war and military repression and sinister attempts to bolster sectarian divides.

    The Congress believes that If this is not prevented then the system will utilize this crisis to restructure and continue business as usual. This is why resistance-both at home and abroad-will be the single most important determinant of how this crisis, eventually plays out. Here in the South, we will have to resist every attempt of the respective governments to capitulate before designs to offload the effects of the crisis on these countries. On the one hand, we have to force our respective governments to make public investment in social sector and public works to generate domestic demand. On the other, loan packages for poor countries with no strings attached will have to be created and greater degree of autonomy to all nations will have to be provided.

    Against the Policy of Aggression, for Peace and A Nuclear Weapon Free World:

    The 8th Congress of the AAPSO notes with grave concern the brazen imperialist aggression in Iraq where, during the last five years, over one million Iraqis – primarily unarmed civilians – have been brutally killed by the armed forces of the U.S. and its allies.

    The mindless devastation of the social, economic, political and cultural fabric of Iraq, and, as well as, of the widespread destruction of its natural environment, has heaped untold misery on its hapless 28 million people. Today Iraq, which is the seat of the world’s oldest civilization and which developed into a relatively modern secular nation among the countries of West Asia, finds itself divided on ethnic and sectarian lines.
    The ongoing occupation of Afghanistan by the US and NATO forces not only failed to contain the terrorist outfits but actually giving more space for Taliban to stage a comeback in the political and social scene of Afghanistan. In fact, this is spilling over across the Pakistan border causing the turmoil and uncertainty destabilising the entire South Asian region.
    The developments in Palestine, Iraq and Afghanistan are symptomatic of the present aggressive phase of U.S.-led imperialism. Until and unless the concerned sections of humanity rise in unison to oppose and stop this outrage, the victims of naked imperialist aggression in Palestine, Iraq, Afghanistan and elsewhere can never be emancipated.

    The US strategy in Africa is also matter of great concern. In Africa in order to expand its aggression to other places, the United States is now pressurising African countries to grant it a place where the US can place its AFRICOM Headquarters.
    In Iran also US is building up its pressures. The Congress demands that pressure must cease on Iran and the IAEA be allowed to ascertain that Iran wants to develop nuclear energy for peaceful purposes only. US must also desist from forcing Gulf States to seek nuclear shield from the US on the pretext of Iranian nuclear threat. In this respect Congress demands that Israel must be forced to dismantle its nuclear arsenals.

    The Congress expresses it concern on the growing build up of nuclear arsenal in Asia-Pacific region. The disastrous fate of the atomic bomb victims of Hiroshima & Nagasaki and the dreadful legacy of the Agent Orange victims in Vietnam are chilling examples for all of us and all these tragic incidents reminds the members of the Afro-Asian Solidarity movements its duty to take bold initiative in mobilising world opinion and to build up strong movement with all fraternal peace movements the world over against imperialist aggression; for a non-violent world order and Nuclear Weapons Free World.

    NAM, South-South Cooperation and Solidarity with the People of the South
    The Congress is of the view that in the post cold war era the NAM is faced with a challenging circumstance and has got considerably weakened. The single superpower the US in its overdrive to secure an aggressive hegemony over the rest of the world is undermining the sovereignty of nations which constitute the NAM. The aggressive of US imperialism is manifested through the attempt to establish a complete domination of international finance capital driven global financial and economic system which is intensifying inequalities between the rich and the poor both within and across the nations. This US dominated paradigm of neo liberal globalisation is also exacerbating unemployment and other untold miseries. But in contrast to the capitulation of the ruling elite in most of the countries of the NAM, peoples’ solidarity movements have forced progressive changes across many countries of Latin America with Venezuela and Bolivia leading the pack. These changes have opened up new vistas for south-south cooperation so significantly manifested in the ALBA process. The Congress recognises the possibility of developing similar positive models of South –South cooperation across other continents.

    The Congress is concerned with the growing menace of religious fundamentalism and its expression in the form of grotesque terrorism killing thousands of innocent people. The Congress firmly believes that the growing sense of insecurity and challenges to their livelihood, the poor in the developing countries frustrated by oppressive policies of imperialism can not achieve any thing meaningful by pursuing sectarian violence.
    The Congress call upon its member organisation to unite the people against the forces of religious fundamentalism, obscurantism and as well as against terrorism.

    The Congress emphasises the need for better cooperation among the south to build-up strong solidarity movements with the people of Palestine for their homeland and to end the Israeli occupation, with the people of Syria to free the Golan Height from the Israeli occupation, with the Saharawi people for their independent home land and the people of Korea for their just struggles for peaceful reunification of Korean peninsula.

    The Congress believes that continue economic blocked against Cuba tantamount to aggression. It demands that the US must comply with the UN resolution calling for the dismantling of embargo and economic blockade against Cuba.
    The congress calls on the cessation of hostilities in the Democratic Republic of Congo (DRC), and to allow the Congolese to find a lasting solution to their problems based on justice, national reconciliation and peace.

    The Congress firmly believes that unity of the people and their solidarity is the only course to forge ahead to ameliorate the conditions of the people particularly the poor in the countries of the South.

    Climate Change:

    The Congress recognises that the earth is on the brink of a climate change catastrophe, caused by human actions. Humans need to start acting immediately to avert planetary ruin and loss of species, including themselves.
    The Congress takes particular note of the fact that world peace is gravely threatened by climate change induced food riots, water wars, displacements, migrations and depleting natural resources.
    The Congress notes the gross inequality that exists in sharing the atmospheric space – with developed countries historically occupying it with their GHG emissions far in excess of their share of world population, depriving the developing countries of their present development needs. The latter face the most damage from climate change and have the least capability to adapt to it.
    The Congress holds the view that equity – based on per capita emission rights, is the only practicable principle on which an international accord can be based. We hold that equitable development is the best adaptation method.
    The Congress observes that more human-centred and community based development is the need of the day and profit–motivated instruments should not be trusted to deliver core solutions on climate Change.

    Organisational issues

    The Congress having taken cognisance of the changed environment of the contemporary world, the AAPSO will have to take up the challenge of reinventing itself in facing the pressing concerns of our people. The Congress believes that with a new and vibrant dynamism and more pro active style of functioning of the Permanent Secretariat can live up to the expectations of our movement and our people. The Congress therefore mandates the new leadership to act necessary and appropriate measures for addressing these goals.


  2. Posted by: “Richard Frager”

    Wed Dec 24, 2008 3:56 am (PST)

    Depression Hits Detroit:
    Average home price $18,513
    Unemployment rate 21%

    The Great Depression has reached Detroit. The average price of a home is now $18,513 and unemployment has reached 21%, and it’s expected to get worse. Detroit is facing a crisis of epic proportions that officially puts Detroit statistically (and real term) on par with the great depression. Many readers of Tribble Ad Agency are advertising centric.. and due to the rash of layoffs within all Detroit Advertising firms has put the city on the map for the wrong reasons. It has become the center of all that is wrong with America… and nothing of what is right. For example, the crime rate has fallen…. because of lack of targets within the city. Meaning there is nothing left to steal. In fact, even the criminals don’t want to leave jail. Heard confirmed that some offenders, notably those without homes of their own, were now expressing reluctance to leave jail when their sentences were done.

    Home values have plummeted to levels not seen in 1/2 a century… and the 21% unemployment has in some cases been projected to double within 12 months if the auto industry totally collapses. To make matters even worse, Detroit has superseded New Orleans as the “worst city” in America…. but New Orleans had a Hurricane they could assign blame to… Detroit has no such natural disaster crutch. “It’s a depression — not a recession,” McDuell said, with the authority of someone who has lived through both. “It will get worse before it gets better.” It’s a man-made disaster.

    Regarding a local food bank in Detroit that has seen record numbers of individuals entering the system: “Many people are first-timers — they have no idea how to navigate the system, how to qualify for food stamps,” Wells said. “Last year, some were donors — now they’re clients.” In short, last year they donated money into the system… now they are feeding from it because they themselves are in hard financial times. Detroit needs a miracle, the chances of it showing a resurgence is slim to none in the current economic outlook.


  3. Dec 26, 4:33 AM EST

    Japan factory output has biggest fall on record

    Associated Press Writer

    Japan factory output has biggest fall on record

    Japan shares rise despite plunge in factory output

    JFE Steel to shut blast furnace as demand falls

    Founder’s grandson may take over struggling Toyota

    Japan Cabinet approves record spending for 2009

    Japan factory output has biggest fall on record

    TOKYO (AP) — Japan’s contracting economy got a slew of bad news Friday when government figures showed that industrial production plunged by its biggest margin on record in November, the jobless rate jumped and household spending fell.

    Output at the nation’s manufacturers tumbled 8.1 percent from October, the largest drop since Tokyo began measuring such data in 1953, as Japan’s automakers and others slashed production to cope with slowing global demand. A government survey predicted further declines of 8 percent in December and 2.1 percent in January.

    “Exports and industrial production are falling so extraordinarily quickly that it almost defies analysis,” said Richard Jerram, chief economist at Macquarie Securities in Tokyo.

    The drop in factory production is nearly double the previous biggest decline of 4.3 percent in January 2001, according to the Ministry of Economy, Trade and Industry. Earlier this week, trade data showed that exports plunged a record 26.7 percent in November.

    Many companies, including big names like Toyota Motor Corp. and Sony Corp., have announced plans to cut production and workers. The yen’s recent surge has also dealt a huge blow to the world’s second-largest economy by eroding exporters’ overseas earnings.

    The job cuts are already being reflected in a higher unemployment rate, which rose to 3.9 percent in November from 3.7 percent in October, the Ministry of Internal Affairs said. That’s still below the 4.2 percent reached in August.

    The ministry said 2.56 million people were unemployed in Japan in November, an increase of 100,000 from a year earlier.

    Part-time and temporary workers have suffered the bulk of job cuts so far. The Ministry of Health, Labor and Welfare said Friday that given current company plans, 85,000 such workers will have lost their jobs between October and March, compared to about 3,300 permanent employees.

    The largest portion of such job cuts were in Aichi prefecture of central Japan, where Toyota and many of its part makers are based. Layoffs of salaried employees is rare in Japan, where lifetime employment is a tradition.

    Consumers are also holding back. Retail sales fell 0.9 percent in November from last year, the third straight monthly decline.

    And average monthly household spending dipped 0.5 percent from a year earlier, for the ninth decline in a row. Still, the drop was smaller than expected, beating the 3.6 percent decline forecast by a Kyodo News survey. Household spending is a key indicator of consumer spending, which makes up more than half of Japan’s gross domestic product.

    Inflation, meanwhile, eased. Core consumer prices – which excludes volatile fresh food prices – rose 1 percent after a 1.9 increase in October.

    As Japan’s economy weakens, government officials have warned that deflation, or steady price declines, is a possibility next year. Japan suffered through bouts of deflation from 1999 to about 2006, as it recovered from previous economic downturns.

    Investors shrugged off the bevy of negative numbers. The benchmark Nikkei 225 stock average rose 1.6 percent to 8,739.52.

    “Industrial output is highly volatile, and given the current state of the global economy, investors were not surprised by the plunge in November,” said Kazuki Miyazawa, market strategist at Daiwa Securities SMBC Co. Ltd.

    Japan’s economy is already in recession. In the third quarter, it shrank 1.8 percent at an annual pace, worst that first thought.

    The outlook for manufacturers is particularly grim. If dire forecasts for the next two months of industrial production hold, factory output will have fallen 20 percent from the start of October through January 2009.

    Output by automakers fell 15 percent from October and 25 percent from a year earlier. Electronic manufacturers cut output 12 percent compared the previous month and 25 percent from the same month last year.

    Economists say that while the outlook for the near-term remains bleak, a modest recovery in demand and production may begin to surface in mid-2009, as governments around the world begin to implement stimulus measures announced in recent months.

    “We haven’t see the light at the end of the tunnel yet, but we should be seeing it in a few months,” said Takuji Okubo, an economist at Merrill Lynch.

    (This version CORRECTS name of ministry that issued jobless numbers in graf 6)

    © 2008 The Associated Press.


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