The 2012 budget: by the ruling class for the ruling class

2012_Budget_SpeechOnce again much media fanfare has broken out in aftermath of the South African state’s budget speech.  The budget, however, is yet more proof of the ANC’s ruling class agenda: free markets, budget cuts for the poor and subsidies for the rich. From the budget and other utterances it is clear the ANC has, despite media hysteria, no interest in nationalisation. The state will, therefore, try and deal with the global economic crisis largely through business-as-usual.

Read more: The 2012 budget: by the ruling class for the ruling class

They've Tried Everything: What Now?

The world is tipping over into unknown territory. All the pundits are now starting to agree with US economist, Nouriel Roubini, famous for his prediction of the 2008 financial crash, that a second recession is inevitable. South Africa’s Reserve Bank governor Gill Marcus has also added her voice to the chorus warning of another “Lehman type event.”

Since the last recession, the major governments have spent in excess of $24trillion bailing out the banks, dwarfing the money spent on rebuilding Europe under the Marshall Plan. And yet despite all the talk of recovery these measures have only taken us back to where we were in 2008...only with apparently no further options available.

Meanwhile the call from economists is for the politicians in the US and the EU to get their act together, to “act decisively,” to “satisfy the jittery markets.” It’s now all the fault of the politicians.

Read more: They've Tried Everything: What Now?

All Geared Up for a New Growth Path – On the Road to Nowhere


ngpIt has become common knowledge that South Africa is the most unequal country in the world. Only 41% of people of working age are employed, while half of the people employed earn less than R 2 500 a month. Worse still, inequality is growing with wages as a share of the national income dropping from 50% in 1994 to 45% in 2009; while profit as a share of national income has soared from 40% to 45%. In real terms this means that while a minority live well – and have luxurious houses, swimming pools, businesses, investments, and cushy positions in the state - the majority of people live in shacks or tiny breezeblock dwellings, are surrounded by squalor, and struggle on a daily basis to acquire the basics of life like food and water. Likewise, while bosses, state managers, and politicians – both black and white – get to strut around in fancy suits barking orders; the majority of people are expected to bow down, do as told, and swallow their pride.

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The IMF and Trevor Manuel: A Plague on Both their Houses

The arrest of Dominic Strauss-Kahn (DSK) on allegations of attempted rape certainly has got tongues wagging. In the Guardian newspaper, French journalist Angelique Chrisafis alleged that DSK “always had a problem with women.” Also writing in the Guardian, Dean Baker, co-director of the Washington DC-based Centre for Economic and Policy Research, notes how ironic it is that the immigrant hotel worker who made the allegations may simply have been dismissed under the “flexible labour market policies” so favoured by the IMF, had she not been in a job protected by a trade union.


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Libya and the BRICS: Currency Wars, Imperial Wars and Popular Uprisings

BRICS_550356eOn one side of the world NATO bombs Libya and on the other, the newly expanded BRICS (Brazil, Russia, India, China and South Africa) meet on the island of Hainan, off the south coast of China. Two seemingly unrelated events. But there are links and forces at play fuelling important new power contestations in the world.

Western bombs are raining down on Libya and a “no-fly zone” is being imposed after a United Nations (UN) Security Council resolution. At the UN, BRICS members, China and Brazil, abstained from voting (although South Africa voted for) but publicly criticised the idea of bombing Gaddafi’s forces.

The US is in decline as the power able to exert its authority over world affairs. At the same time we are seeing the rise of China – predicted to be the world’s largest economy within 10 to 20 years – having imperial ambitions, but racked with many internal contradictions. China is the single biggest holder of the US’ debt, in the form of federal bonds. Its rise is offset by its dependence on the US for its exports and on US companies that are its biggest foreign investors. Moreover, holding dollar-denominated US treasury bonds also means that China can't simply watch the dollar decline or risk a US bond default.

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South Africa's Muted Response to the Global Crisis

People the world over are facing an economic crisis unseen since the Great Depression of the 1930's. Despite the talk of "green shoots" and the emergence of the United States of America (US), Germany, France and others from recession, this "recovery" (if one can all it that), is extremely fragile. Witness the scare of Dubai World defaulting, and at some stage the costs of some US$14 trillion dollars will have to be carried somewhere.

The long wave of decline in capitalist accumulation that began in the 1970's is reasserting itself after the stock exchange bubbles of the 1990s and early 2000s. Major states have tried everything from cutting interest rates to (almost) zero, to partial nationalisation, to buying the debt of corporations, to printing money (also known as quantitative easing).    

Read more: South Africa's Muted Response to the Global Crisis


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