Re: forex spillovers

[Jurriaan Bendien <bendien@xxxxxxxxxxxx>]

Hi Jim,

> Or is unemployment not lower in NZ? If unemployment didn't fall, then
> that contradicts
> the orthodoxy.

Real unemployment is difficult for me to estimate momentarily, because of
the compilation of data and statistical presentation. For example, if you
just worked a few hours a week they'd count you as employed, and so on. So
then you have to take a whole labour force data set and a demographic data
set to work out what real unemployment actually is (total population ->
active population ->total labour force ->employed labour force ->unemployed
labour force, taking into account "jobless" research (important in assessing
casual labour) and actual working hours. I would have to contact Steve
Maharey MP (Labour Party) who got a ministerial job working on this type of
thing (the pay is pretty good, much better than if you are a statistician).
Only then can you evaluate registered unemployment figures.

The basic orthodox reply to unemployment in New Zealand was saying "well,
what is work anyway ?" (because they don't have Marx's theory of value, only
utility, as reflected in car sales I mentioned in a previous post, and then
I bought my Orange Ford escort with the Rosa Luxemburg sticker on it) and so
we ought to investigate this question more objectively.

> Again, I wasn't advocating orthodox macro. But the total volume of
> capital
> and money movements doesn't seem relevant here. The pundits focus on the
> size
> of the trade deficits.

Well I don't have any data on that handy here at this moment, but trade
deficit data takes a long time to produce and usually appears quite some
time after the interval to which it applies. They make quarterly estimates
of some deficits, but how accurate would those estimates be, for short-term
investment decision making ?
>
> Just because there's a taint of racism in the criticism of China's or
> Japan's policies
> doesn't mean that the rest of the critique is totally off-base.

True, but I am questioning whether we are getting into another "I can't see
the wood for the trees" dispute where we conveniently and ideologically
focus on a problem which isn't the real problem.
'
>
> I think there's a contradiction within the US ruling class. An
> appreciation of the renibi (sp?)
> would aid US manufacturing and other exporting or import-competing
> sectors and help
> Bush get re-elected. But if the renibi were to rise, it would hurt
> existing fixed investments in
> China by US corporations, by hurting demand for their products. I don't
> know how big this
> contradiction is, but it seems real.

Yes but then you say that the capitalists should vote for Bush if they want
the renibi to appreciate, and vote for Dean if they don't want to force this
policy on the Chinese.

But if we look at the quantitative picture (which I cannot do at this
moment) then we would say that really they are making a mountain out of a
molehill, and they should trace the problem back to its roots. By the way,
if the renibi rises, this has multiple effects. Yes, it would hurt demand,
but, for example, if the foreign fixed assets are held in renibi, then their
value rises also, but that trades off against a smaller profit rate. I
suspect that this is the real reason: the currency level puts pressure on
both profit rates and demand. So then what do they actually do in terms of
valuating the asset holdings in China and Japan ?

In my reply to (Aussie) Gary on Marxmail a while back, I said that the moral
of the neo-liberal story was really that everybody needed better negotiation
skills, because that is HOW we could make the market equilibrium work better
(everybody gains some, loses some - Sabri who takes the piss out of me for
seeing some value in game-theory misses the significance of that - the idea
being that being better negotiators or hagglers or whores, we are being more
humanised as a result, just as Adam Smith suggests with his "natural
propensity" theorem).

So what are they going to do now, bomb the Chinese and the Japanese, or what
?

I have to go now, I am stuffed.

Jurriaan