1. HOW TO SOLVE THE CRISIS? Dr. Zoltan Pogatsa

2. V or W shaped? L-shaped: Corporate capitalism Corporate party financing State capture Unsustainable corporate, household and state finances Crisis

3. Rate of profit Marx: falling Reality: growing WHO WILL BUY THE PRODUCTS? Question: WHO WILL BUY THE PRODUCTS?

4. Answers 1.Mediatised consumerism 2.Borrowing from the future (debt) 3.Ridding the state of resources (tax cuts, offshore) 4.Geographical expansion (CEE, China, BRICS) 5.Environmental degradation 6.War

5. Mediatised consumerism

6. RIDDING THE STATE OF RESOURCES

7. EVER SMALLER STATE Because it is „too large”

8. Financial deregulation (Johnson & Kwak „13 Bankers”)

9. Banking compensation

11. Securitization

12. Offshore (Shaxton: Treasure Island) Tax Justice Network Financial Secrecy Index: 1.US 2.Luxemburg 3.Switzerland 4.Cayman Islands 5.UK Rich individuals in offshore: a complete yearly US GDP Corporations: Vodafone, Google, Enron, Wizzair, CBA….

13. War

14. Sovereign indebtedness

15. Household indebtedness

16. Geographical expansion CEE, BRIC, etc. New consumers for corporations Cheap labour offshoring for corporations

17. ENVIRONMENTAL DEGRADATION

18. Responses so far Anticyclical fiscal expansion Monetary easying (QE1&2, ECB) Austerity (Stiglitz, Soros, etc.) No regulation No sustainability

19. Why don’t politicians act? Finance Chris Dodd, Chair of Senate Banking Committe received $2.9mn from securities industry in 2007-2009, more than three times any senator who was not a presidential candidate. („13 Bankers”) Defense Lockheed Martin is the biggest campaign sponsor of Buck McKeon (chair, Congress Military Forces Commitee) and Daniel Inouye (chair, Senate Military Procurement Committe).(Hartung „Prophets of War”) Offshore Lord Ashcroft, Chairman of UK Conservative Party is a tax citizen of Belize. Revolving door Robert Rubin (Goldman>Glass-Stegall>Citi), Dick Cheney (Halliburton)

20. How to solve the crisis? Cut the nexus between corporations and government.

21. GREECE

22. Greek state not big!

23. Revenue side problem!

24. Greece 3-5% of GDP in Offshore (mainly Cyprus) 3-5% of GDP in Offshore (mainly Cyprus) Military expenditure: EU countries sold €1bn worth of military to Greece in 2010 Military expenditure: EU countries sold €1bn worth of military to Greece in 2010 Would need 6-8% growth to get out of sovereign debt trap Would need 6-8% growth to get out of sovereign debt trap Will not happen with 5th wave of austerity Will not happen with 5th wave of austerity

25. Cheap lending in €uro

26. €urozone not an optimal currency area

27. Not a productivity issue!

28. But a wage issue!

29. Germany benefitted from €z

30. Greece had deindustrialised in free trade

31. THANK YOU! pogatsa@gmail.com