'I see
an American economy working its way into that kind of a dead end by
its own mechanisms, and because it can't face that the system doesn't
work, it has to keep going in a kind of zombie way towards its own
end.'
Richard
Wolff briefly explains the dead end in which the American economy has
been trapped, and why it is unlikely to avoid another financial
crisis soon:
If you
try now to jack-up the interest rates in order to prepare for the
next recession, you are admitting - which you should be doing and
should be talking to the American people, that the next recession is
something that leading policy makers know is on the horizon. It's not
whether we are going to have one, it's only a question of when.
Over the
last 200 years, capitalism, wherever it existed, has had economic
downturns every four to seven years. Well, do the math: the last one
was in 2008-9. We're due for one and it will be very unlikely that we
don't have one in the next twelve, eighteen, twenty-four months.
Putting
aside what that would do to Trump presidency, for the Federal
Reserve, they can't lower the interest rates unless they first bring
them up. But by bringing them up, they make houses more expensive,
cars more expensive, all of us will be paying higher monthly payments
on our credit cards, and that will constrict the economy, so they
don't know which way to turn.
This is
a sign of an economic system that isn't working very well because it
literally does not give you an idea of which way to turn, if you want
to avoid a catastrophe.
I see an
American economy working its way into that kind of a dead end by its
own mechanisms, and because it can't face that the system doesn't
work, it has to keep going in a kind of zombie way towards its own
end.
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