[PEN-L:11528] Re: Re: Re: Re: [Fwd: Fw: EH.R: Kondratieff Cycles]

["Patrick Bond" <pbond@xxxxxxxxxx>]

No, not satisfying, Doug.

There's an issue here about methods. Of course, Kism valorises
and devalorises continually. Isn't it in the least interesting to
explain why and how and where and with what temporal rhythms? If
there are particular moments in the business cycle where this
becomes frenetic, and if it coincides with the restructuring of elite-
politics, with geopolitical tensions and with the possibility for
informed resistance, you don't want to just deny the process, do
you?

On 22 Sep 99, at 14:27, Doug Henwood wrote:
> Patrick Bond wrote:
> >For the early 1990s, take away half the value of
> >the Tokyo stock market,
> An event whose real world effects are...?

The catalyst for all manner of 1990s problems in Japan, and part of
the capital-push factor into East Asia?

> > a huge chunk of real estate values in
> >world cities not to mention backwaters,
> What world cities outside Japan are you talking about?

E.g. a million families in England suffering negative equity because
the 30% crash of their real estate asset-valuation put them below
the value of their mortgage bonds. The early 1990s downturn of the
global Kuznets property cycle was nothing to sneer at;
gentrification in NYC even came to a grinding pause. In
Johannesburg, the very rich and the black working-class witnessed
a 30% property market crash from 1991-94, whether in snazzy
Houghton (where Mandela lives) or Soweto (where he used to).

> > more downward commodity
> >price pressure,
> Except for the 1970s, commodity prices have been either in relative
> or real decline for decades.

I know, the post-1973 non-oil index dropped something like 80%
BEFORE 1989. My understanding, though, was that the drop
intensified during the early 1990s. (I don't have data handy; do you?)

> > (my favourite, Zimbabwe, witnessed a 40% fall in volume of
> >manufacturing from 1991-95), rising bankruptcy rates, S&L asset
> >write-downs, etc etc.
> The S&L crisis was 10 years ago!

But the workouts of property portfolios hit peak around 1989,
serving as one basis for intense little crashes of local real estate
markets in southern California, Texas, parts of Florida, as I vaguely
recall.

Meanwhile, real and financial values
> are both many times higher than they were when the Resolution Trust
> Corp. was formed.

Right, but a) it didn't look pretty during the early 1990s (the point of
this discussion); and b) it could be said (and I'm just
hypothesising, not putting forth a Domhoff-type analysis) that this
asset-price recovery reflected the next logical step in the argument:
the ability of one set of territorially-grounded capitalists (including
US real estate interests, but particularly financiers who draw the
bulk of their funds from the US) to withstand, displace or delay the
broader devalorisation of capital, in part by the kinds of alliances --
huge campaign contributions to Democratic Party neoliberals for
example -- that have encouraged the US to visit its vast economic
problems onto the rest of the world during the 1990s.

In any event, even if you don't like the story, do you not concede
the idea of adding valorisation/devalorisation processes to your
GDP and profit data (and are the latter not of dubious scientific
merit anyhow after the past few months' corporate accounting
revelations)?

Patrick Bond
(Wits University Graduate School of Public and Development Management)
home: 51 Somerset Road, Kensington 2094, Johannesburg
office: 22 Gordon Building, Wits University Parktown Campus
mailing address: PO Box 601 WITS 2050
phones:  (h) (2711) 614-8088; (o) 488-5917; fax 484-2729
emails:  (h) pbond@xxxxxxxxxx; (o) bondp@xxxxxxxxxxxxxxxxxxxx