December 11th, 2011

‘The longer the economics crisis goes on, the less credible sticking plaster solutions become. Four years in, Europe is heading into a nasty recession, China is flirting with a hard landing, the governor of the Bank of England is warning of a systemic banking crisis and George Osborne has announced spending cuts that will continue for the next six years…(…) Italian banks are even more dependent on their financial lifeline now than in 2008; last week’s co-ordinated action by six of the world’s leading central was prompted by evidence that Wall street was no longer prepared to lend money to European banks. Sooner or later, Hayek and his followers would say , there has to be aging of the system to remove the rottenness, and what has happened over the past few years is merely deferring the inevitable. Interestingly it is not only free-market economists that believe in the power of creative destruction. The term, – although it came to be associated with Joseph Schumpeter – originally came from Marxist economic theory, which held that each phase of development emerged out of the wreckage of a system that no longer worked. Socialism would follow capitalism, just as capitalism followed feudalism. The Marxists believe the attempts to muddle through are doomed to failure…..’

‘Welcome to the world of the living dead’ by Larry Eliott/Economics editor/ The Guardian, 5 December, 2011

We hear from sources at the Costas Lapavistas/Paul Mason jamboree on Friday at SOAS that Lapavistas was speaking positively about Greece leaving the Euro. He seems to want some kind of modern day Stalinism instituted to save Greece. The only thing to raise a smile was when Mason said: ‘I am sorry to leave early but I have to present Newsnight!’

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