1. “ Roots of the Current Economic Crisis ” www.akliman.squarespace.com

2. Fred Moseley (2008, 2009): “The main problem in the current crisis is the financial sector. … The current crisis is more of a Minsky crisis than a Marx crisis. … there has been a very substantial and probably almost complete recovery of the rate of profit in the U.S.” Gérard Duménil and Dominique Lévy (2005): “the recovery of the profit rate [ in the U.S.] appears nearly complete within the entire Corporate sector”

4. Pre-tax Profit as % of Historical- and Current-Costs of Fixed Assets, U.S. Corporations; 1982 = 100%

5. - + 51%

7. Constant-”Wage”-Share and Actual

10. Theory The rate of profit heads toward the incremental rate of profit At the start of new boom, the rate of profit is well above the incremental rate of profit, so it tends to fall over time This situation persists unless there’s sufficient “destruction of capital” Destruction of capital restores profitability, ushers in a new boom Great Depression & WWII

11. But insufficient destruction of capital in economic crises of mid-1970s & early 1980s Rather than depression (& subsequent boom!), policy-makers have continually encouraged excessive expansion of debt. This artificially boosts profitability and economic growth, but in an unsustainable manner; it leads to repeated debt crises. The present crisis is the most serious and acute of these. Policy-makers are responding by again papering over bad debts with more debt, this time to an unprecedented degree.

13. S = surplus labor, surplus value C = capital-value advanced In the long run, the rate of profit tends toward the incremental, or long-run, rate The labor rate of profit is S/C. The incremental labor rate of profit is ILR =(change in S)/(change in C). To abstract from distributional issues, I’ve assumed that % change in S = % change in employment.

14. Devel- (ex-) World oped USSR China Rest of World Avg. West & & E. World Avg. Excluding Japan Europe China

15. “[My] Secretary of the Treasury [Andrew] Mellon … had only one formula: ‘Liquidate labor, liquidate stocks, liquidate the farmers,. liquidate real estate.’ … He held that even a panic was not altogether a bad thing. He said: ‘It will purge the rottenness out of the system.’” President Herbert Hoover

16. “ Roots of the Current Economic Crisis ” www.akliman.squarespace.com

20. P.C. Vey, The New Yorker, March 9, 2009

21. correct incentives for executives financial product safety commission financial systems stability commission "speed bumps" to limit borrowing consumer protection laws … that prevent predatory lending better competition laws. CNN.com Sept. 17, 2008 How to prevent the next Wall Street crisis by Joseph Stiglitz “These reforms will not guarantee that we will not have another crisis. The ingenuity of those in the financial markets is impressive. Eventually, they will figure out how to circumvent whatever regulations are imposed. But these reforms will make another crisis of this kind less likely, and, should it occur, make it less severe than it otherwise would be.”