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Arabica Robusta

Trade Denialism Continues: Trade Really Did Kill Manufacturing Jobs - 0 views

  • The basic story on automation, trade and jobs is fairly straightforward. "Automation" is also known as "productivity growth," and it is not new. We have been seeing gains in productivity in manufacturing ever since we started manufacturing things. Productivity gains mean that we can produce more output with the same amount of work. Before the trade deficit exploded in the last decade, increases in productivity were largely offset by increases in output, making it so the total jobs in manufacturing did not change much.
  • The extraordinary plunge in manufacturing jobs in the years 2000 to 2007 was due to the explosion of the trade deficit, which peaked at just under 6 percent of GDP ($1.2 trillion in today's economy) in 2005 and 2006. This was first and foremost due to the growth of imports from China during these years, although we ran large trade deficits with other countries as well.
Arabica Robusta

I cite: Is debt the connective thread for OWS? - 0 views

  • An emphasis on debt could be politically promising -- particularly as it helps people understand the trap of capitalism, the way the system feeds off them, the way it relies on debt at multiple levels and establishes terms of credit and debit for the benefit of the capitalist class. A politics of debt seems especially posed to reach a middle class that compensated for its declining income with credit (that said, household indebtedness has declined since the beginning of the great recession even as part of that decline can be attributed to mortgage defaults). 
  • there seem to be some challenges or potential drawbacks to a political strategy based on debt:
  • It is difficult to overcome the individual dimension of debt: the individual quality of debt (credit card, mortgage, student loan) presents a collective action problem.
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  • Focusing on student loan debt too easily slides into the language of attacking higher education already prominent on the right.
  • The construction of debt as a problem can easily elide with right-wing attacks on deficits, the national debt, too much government spending, etc. The mistake is to treat government debt as the same thing as individual and household debt, and vice versa. 
  • when we contrast debtors with proletarians: the former consume, the latter produce. Admittedly, in the face of CDOs, debts become a kind of production--but it's fake, empty, a ponzi scheme, production without production. 
  • The most pressing common issue in the present is climate change. This affects everyone. The rich are currently dispossessing the people of our collective wealth, positioning themselves so that they are mobile, comfortable, defended, impermeable.  The rest of us will face the ravages of weather, drought, flood, famine, shortages, disease. The only way to deal with any of this is collectively -- beginning from the premise that food, shelter, health, and knowledge belong to all in common. Anyone who thwarts this is an enemy of the people.
  • A politics that focuses on debt seems to treat people as failed capitalists -- even if debtors are not shopaholics or spendthrifts, that is, even if debt is a matter of self-investment, or purchasing in order to benefit one's self, children, household, the model seems too close to the one that treats people as human capital, the homo economicus of liberal and neoliberal theory.
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    An emphasis on debt could be politically promising -- particularly as it helps people understand the trap of capitalism, the way the system feeds off them, the way it relies on debt at multiple levels and establishes terms of credit and debit for the benefit of the capitalist class. A politics of debt seems especially posed to reach a middle class that compensated for its declining income with credit (that said, household indebtedness has declined since the beginning of the great recession even as part of that decline can be attributed to mortgage defaults). 
Arabica Robusta

Piketty and the Crisis of Neoclassical Economics | John Bellamy Foster | Monthly Review - 0 views

  • But Piketty advances such an argument without breaking completely with the architecture of neoclassical economics. His theory thus suffers from the same kind of internal incoherence and incompleteness as that of Keynes, whose break with neoclassical economics was also partial. Deeply concerned with issues of inequality, just as Keynes was with unemployment, Piketty demonstrates the empirical inapplicability over the course of capitalist development of the main conclusions of neoclassical marginal productivity theory. His work has thus served to highlight the near-complete unraveling of orthodox economics—even while staying analytically within the fold.28
  • This overall incoherence, as we shall see, ultimately overwhelms Piketty’s argument. He is unable to explain why capitalist economies tend to grow so slowly as to generate such a divergence between wealth and income (and between capital and labor). Hence, while his analysis sees slow growth or relative stagnation as endemic to this system, he neither explains this nor is concerned directly with it. Significantly, he replaces more traditional notions of capital as a social and physical phenomenon with one that equates it with all wealth.29
  • Nor does he address the relations of power—principally class power—that lie behind the inequality that he delineates. His analysis is confined largely to distribution rather than production. He neither follows nor (by his own admission) understands Marx, though at times clearly draws inspiration from him.31
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  • But even with these and other deficiencies, Piketty, nevertheless, brings a certain degree of reality—even a sense of “class warfare” (if only implicitly)—back to bourgeois economics. The result is to heighten the crisis of neoclassical theory. Moreover, he argues—even though he dismisses the idea as “utopian”—for the imposition of a tax on wealth.33 Piketty thus represents a partial revolt within the inner chambers of the economics establishment.
  • Edward Wolff has pioneered the study of wealth data in the United States. In his most recent paper, he finds that the average (mean) net worth of the wealthiest 1 percent in 2010 was $16.4 million. By contrast the average for the least wealthy 40 percent was $–10,600 (that is, it was negative!).39
  • Piketty has no notion of capital as an exploitative social relationship.
  • However, beginning in the mid–1970s, capital made a remarkable comeback, and the ratio began to climb, and is now approaching the level that existed at the start of the First World War. Public capital has been privatized and political regimes throughout the world have been very well disposed toward the interests of wealth-holders.43
  • He shows that throughout the eighteenth and nineteenth centuries, and right up until the First World War, wealth in most rich nations equaled six to seven years of national income.
  • If the rate of return on capital r is greater than the growth rate of the economy g, then capital’s share of income will rise. Piketty shows that over very long periods of time, r has in fact been greater than g; in fact, this is the normal state of affairs in capitalist economies.
  • He finds that there is a direct and significant correlation between the size of the endowment and the rate of return on it. Between 1980 and 2010, institutions with endowments of less than $100 million received a return of 6.2 percent, while those with riches of $1 billion and over got 8.8 percent. At the top of the heap were Harvard, Princeton, and Yale, which “earned” an average return of 10.2 percent.49 Needless to say, when those already extraordinarily rich can obtain a higher return on their money than everyone else, their separation from the rest becomes that much greater.
  • Reality could not be more different than what neoclassical theory leads one to expect. In the United States, real weekly earnings for all workers have actually declined since the 1970s and are now more than 10 percent below their level of four decades ago. This reflects both the stagnation of wages and the growth of part-time employment.50 Even when considering real median family income that includes many two-earner households there has been a decrease of around 9 percent from 1999 to 2012.51
  • But how does this relate to issues of class struggle and class power? What are the consequences of these realities in terms of control of corporations, the economy, the state, the culture, and the media? Piketty, though making a few tantalizing allusions, tells us next to nothing about this.
  • “The neglect of power in mainstream economics,” as the heterodox Austrian economist Kurt Rothschild wrote in 2002, “has its main roots…in deliberate strategies to remove power questions to a subordinate position for inner-theoretic reasons,” such as the search for mathematical models with a high degree of mathematical certainty.
  • It goes without saying that Piketty’s acceptability to neoclassical economics is dependent on his avoidance of the question of inequality and power.
  • Just as class power tends to concentrate, so does the power of the increasingly giant, oligopolistic firms which, in economic parlance, reap monopoly power, associated with barriers to entry into their industries and their ability to impose a greater price markup on prime production costs (primarily labor costs).
  • Writing for the Wall Street Journal, Peter Thiel, co-founder of PayPal, declared that “Capitalism is premised on the accumulation of capital, but under perfect competition, all profits get competed away…. Only one thing can allow a business to transcend the daily brute struggle for survival: monopoly profits…. Monopoly is the condition for every successful business.” Indeed, this might even stand as the credo of today’s generalized monopoly capital.64
  • For Piketty himself there is no organic relation between the two main tendencies that he draws in Capital in the Twenty-First Century—the tendency for the rate of return on wealth to exceed the growth of income and the tendency toward slow growth. Nor is his analysis historical in a meaningful sense, which requires scrutiny of the changing nature of social-class relations. Increasing income and wealth inequality are not developments that he relates to mature capitalism and monopoly capital, but are simply treated as endemic to the system during most of its history.
  • Here it is useful to recall that for Keynes the danger was not only one of secular stagnation but also the domination of the rentier. He thus called for the “euthanasia of the rentier, and consequently the euthanasia of the cumulative oppressive power of the capitalist to exploit the [artificial] scarcity-value of capital.”69 In today’s financialized capitalism, we face, as Piketty recognizes, what Keynes most feared: the triumph of the rentier.70 The “euthanasia of the cumulative oppressive power of the capitalist” is needed now more than ever. This cannot be accomplished by minor reforms, however—hence Piketty’s advocacy of what he calls a “useful utopia,” a massive tax on wealth.71
  • It is significant that imperialism plays no role in Piketty’s analysis, neither in explaining the growth of wealth and wealth inequalities, nor even in the analysis of past growth, or prognostication of future growth. On the contrary the book is informed by a perception according to which capitalist growth in one region…is never at the expense of the people of another region, and tends to spread from one region to another, bringing about a general improvement in the human condition.
  • Significant in this respect is that he chose as the epigraph of his book a line from the Declaration of the Rights of Man and Citizen from the French Revolution: “Social Distinctions can be based only on common utility.”75
  • One could hardly pick a statement more opposed to the system in which we live, which seeks not the common but the individual utility.
Arabica Robusta

Venezuela's Polarizations and Maduro's Next Steps | NACLA - 0 views

  • As those spread, what began as protests over insecurity were overshadowed by cryptic calls for La Salida—The Exit—spearheaded by radical sectors of the opposition that have long been involved in efforts to oust the government, constitutionally or otherwise. In response, the government of Nicolás Maduro, whose leadership after edging a narrow victory last April remains unsteady amid worsening social and economic conditions, responded aggressively against what it saw as an attempt at destabilization at a time of fragility in the heart of the Bolivarian Revolution. 
  • a weak government confronting major social and economic crises that even officials and supporters acknowledge. Fifty six percent inflation, worsening shortages, a sinking currency, and insecurity rates that are by all accounts severe—even if the precise figures are a matter of debate—have plagued Nicolás Maduro’s fledging administration. Accounts of course vary on their depth and causes. Opponents blame mismanagement, corruption, and too great an emphasis on social spending over investments in the productive apparatus. Government officials point to speculation, hoarding, and currency manipulation—part of a broader program of economic warfare by saboteurs at home and abroad. Analysts have instead drawn attention to the distortions of a mixed socialist and capitalist economy where, despite strategic expropriations and increased social spending by the state, most industry and business remains in private sector hands.
  • But it would be a mistake to see the latest unrest as another blip in a now-longstanding pattern of tense stalemate punctuated by periods of violent upheaval. Instead, two intersecting elements should raise alarms about Venezuela’s near-term political future.    The first is a weak government confronting major social and economic crises that even officials and supporters acknowledge. Fifty six percent inflation, worsening shortages, a sinking currency, and insecurity rates that are by all accounts severe—even if the precise figures are a matter of debate—have plagued Nicolás Maduro’s fledging administration. Accounts of course vary on their depth and causes. Opponents blame mismanagement, corruption, and too great an emphasis on social spending over investments in the productive apparatus. Government officials point to speculation, hoarding, and currency manipulation—part of a broader program of economic warfare by saboteurs at home and abroad. Analysts have instead drawn attention to the distortions of a mixed socialist and capitalist economy where, despite strategic expropriations and increased social spending by the state, most industry and business remains in private sector hands.
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  • while the returns gave Maduro a crucial political victory and renewed mandate, they did nothing to abate acute social and economic problems. This helps to explain why throughout January, elected officials in both the government and in the opposition actively engaged in working groups to coordinate national, state, and local-level responses to Venezuela’s severe insecurity crisis. As part of those meetings Capriles shook hands with Maduro in a dramatic gesture of de-escalation. Despite mistrust and early skepticism, opposition governor Henri Falcón would go on to acknowledge that the discussions were proving promising and productive. At the same time, Maduro’s government began to float, and even implement, a series of economic measures long urged by economists and business leaders, like easing the flow of dollars to the private sector and signaling willingness to reduce costly subsidies on the price of gasoline—a politically unpopular move that even some in the opposition rejected.
  • What seems clear after a month of protests is that in the short term, the government of President Maduro has won a reprieve. They have severely hampered Capriles’ message of long-term support building, reminding popular sectors that might otherwise be receptive to an alternative to chavismo that the opposition has little interest in their concerns. But they have also postponed difficult decisions and discussion by Maduro’s government around social and economic issues that remain grave. For Maduro, then, while strengthened momentarily, the bigger challenge will come from confronting not these protests, but the ones that may yet to come when opposition hardliners leave the streets.
Arabica Robusta

Inequality As Policy: Selective Trade Protectionism Favors Higher Earners - 0 views

  • Globalization and technology are routinely cited as drivers of inequality over the last four decades. While the relative importance of these causes is disputed, both are often viewed as natural and inevitable products of the working of the economy, rather than as the outcomes of deliberate policy. In fact, both the course of globalization and the distribution of rewards from technological innovation are very much the result of policy. Insofar as they have led to greater inequality, this has been the result of conscious policy choices.
  • As it stands, almost nothing has been done to remove the protectionist barriers that allow highly-educated professionals in the United States to earn far more than their counterparts in other wealthy countries.
  • doctors in the United States earn an average of more than $250,000 a year, more than twice as much as their counterparts in other wealthy countries.
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  • in the last two decades developing countries taken as a whole have been running large trade surpluses with wealthy countries. This implies large trade deficits in rich countries, especially the United States, which in turn has meant a further loss of manufacturing jobs with the resulting negative impact on wage inequality. However, there was nothing inevitable about the policy shifts associated with the bailout from the East Asian financial crisis that led the developing world to become a net exporter of capital.
  • In this context, it would hardly be surprising if the development of “technology” was causing an upward redistribution of income. The people in a position to profit from stronger IP rules are almost exclusively the highly educated and those at the top end of the income distribution. It is almost definitional that stronger IP rules will result in an upward redistribution of income.
  • This upward redistribution could be justified if stronger IP rules led to more rapid productivity growth, thereby benefitting the economy as a whole. However, there is very little evidence to support that claim. Michele Boldrin and David Levine have done considerable research on this topic and generally found the opposite.
  • While tax and transfer policies that reduce poverty and inequality may be desirable, we should also be aware of the ways in which policy has been designed to increase inequality. It is much easier to have an economic system that produces more equality rather than one that needlessly generates inequality, which we then try to address with redistributive policies.
Arabica Robusta

Another financial crisis looms if rich countries can't kick their addiction to cash inj... - 0 views

  • If its effects are at best debatable and at worst laying the ground for the next round of financial crises, why has there been so much QE? It is because it has been the only weapon that the rich country governments have been willing to deploy in order to generate an economic recovery.
  • QE has become the weapon of choice by these governments because it is the only way in which recovery – however slow and anaemic – could be generated without changing the economic model that has served the rich and powerful so well in the past three decades.
  • This model is propelled by a continuous generation of asset bubbles, fuelled by complex and opaque financial instruments created by highly leveraged banks and other financial institutions. It is a system in which short-term financial profits take precedence over long-term investments in productive capabilities, and over the quality of life of employees. If the rich countries had tried to generate recovery through any other means than QE, they would have to seriously challenge this model.
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  • Recovery driven by fiscal policy would have involved an increase in the shares of public investment and social welfare spending in national income, reducing the share going to the rich.
  • Recovery based on a "rebalancing" of the economy would have required policies that hurt the financial sector. The financial system would have to be re-engineered to channel more money into long-term investments that raise productivity. Exchange rates would have to be maintained at a competitive level on a permanent basis, rather than at an over-valued level that the financial sector favours.
  • There would have to be greater public investment in the training of scientists and engineers, and greater incentives for them to work in and with the industrial sector, thus shrinking the recruitment pool for the financial industry.
  • Given all this, it is not a big surprise that those who benefit from the status quo have persisted with QE. What is surprising is that they have actually strengthened the status quo, despite the mess they have caused. They have successfully pushed for cuts in government spending, shrinking the welfare state to the extent that even Margaret Thatcher could not manage. They have used the fear of unemployment in an environment of shrinking social safety nets to force workers to accept more unstable part-time jobs, less-secure contracts (zero-hour contracts being the most extreme example), and poorer working conditions.
  • Greece, Spain, and other eurozone periphery countries could explode any day, given their high unemployment and deepening strains of austerity. In the US, which is considered the home of quiescent workers, the call for living wages is becoming louder, as seen in the current strikes by fast-food restaurant workers.
  • All of these stirrings may amount to little, especially given the weakened state of trade unions, except in a few countries, and the failure of the parties on the left of centre to come up with a coherent alternative vision. But politics is unpredictable. Five years after the crisis, the real battle for the future of capitalism may be only just beginning.
Arabica Robusta

The BRICS bank | openDemocracy - 0 views

  • This event raises several political questions for progressives: what type of ‘bank’ do the BRICS leaders propose; why is it needed; are these the appropriate leaders to organise and control the new institution; and is it something progressives should view favourably?
  • An international ‘development’ bank is a non-profit, cross-country, public sector institution that makes loans to governments for long-term projects, either directly productive ones (e.g., a hydro-electric dam) or supportive of productive activities (e.g., roads and highways).  A development bank's sine qua non lies in offering loans at more favourable terms than private banks.
  • For example, in place of a requirement that US$ 200 million to Zambia be used to build a hydro-electric damn, conditions would require the government to privatize public enterprises, savagely cut government employment, and drastically slash public spending.
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  • it is a bit geographically challenging to describe it as the development bank of the ‘South,’ given that Russia is one of the founding members; the largest founding member is entirely north of the Tropic of Cancer except for a tiny sliver (China); and a third was entirely north of the Equator the last time I checked a world map (India).
  • Many predict or at least hope that the new lending institution will improve the access of middle and low-income countries to financing for infrastructure.
  •  If the BRICS bank can operate less bureaucratically than the World Bank, that would be a substantial gain in itself.
  • why is it necessary for countries to borrow to build, for example a new airport? The problem is never ‘money.’  Any government of a country that has its own currency can borrow from the central bank (this would not apply to the 14 members of the West and Central African currency zones). Only one reason comes to mind about borrowing from abroad: that the project may require substantial imports of materials. Thus, the purpose of the borrowing is to obtain US dollars, yen, renminbi, etc.  
  • is this Gang of Five likely to shift international lending in a more humane and flexible direction as Oxfam hopes?  We should note that the voting proposal for the BRICS bank follows the IMF/World Bank model – money votes with shares, reflecting each government's financial contribution. The largest voting share goes to China, whose record on investments in Africa is nothing short of appalling (see my discussion of Chinese capital in Zambia).
  • Much better than a project bank for the ‘South’ would be an institution providing long-term loans in foreign currencies. This would have several major advantages over the BRICS bank as envisaged. First, the loans could be made on the basis of a judgment about the ability of the government to repay, not a narrow assessment of a specific project. This rather difficult judgment is the de facto basis of all loan repayment – can the country's export sectors generate the foreign exchange to service the debt? Second, the borrowing country's external debt would increase by the foreign currency component of the project; the rest would be financed domestically. This arrangement would be in line with the famous advice of John Maynard Keynes in 1933, ‘let goods be homespun whenever it is reasonably and conveniently possible, and, above all, let finance be primarily national’ (emphasis added). 
  • The suspicion uppermost in my mind is that the purpose of the BRICS bank, as a project funding bank, is to link the finance offered, to the construction firms and materials suppliers located in the BRICS themselves. Certainly, the Chinese Government is notorious for doing this (see 'China insists on "tied aid" in Africa').
Arabica Robusta

Poor Empiricism: The "Middle Income" Trap » TripleCrisis - 0 views

  • The first is that, beyond a point export-driven growth has a way of running into internally generated constraints.  Second, that among the factors that can undermine a country’s growth prospects, even at relatively higher income levels, is excessive liberalisation, especially financial liberalisation. Possibly most countries, whether poor, rich or in some ‘middle income’ range, find their growth has stalled for reasons such as these.
  • The IMF’s latest regional outlook on Asia for example suggests that these economies need to pay attention to “institutions” and infrastructure and exploit the “ample room for easing stringent regulations in product and, in some cases, labor markets.” Institutional strength is seen as reflected in higher political stability, better bureaucratic capability, fewer conflicts and less corruption. Whether weakness in this are is the result of underdevelopment or a cause of it is open to discussion.
Arabica Robusta

The Great Banking Divide » TripleCrisis - 0 views

  • Consider what is happening in the most dynamic countries of developing Asia, where the increase in bank lending has been most evident since 2008. It turns out that a large part of the expansion in domestic credit has actually been directed to households, for consumption purposes. And the businesses that have gained from that (such as construction and real estate as well as some consumer durables) are the ones that have been disproportionately getting bank loans for their own productive activity.
  • The result has been an explosion in heavily leveraged consumption as well as in residential real estate activity,. And the impact has been most strongly felt in the housing market. So house prices increased rapidly between 2007 and 2011 – by around 70 per cent in China and Hong Kong China, and by 30-50 per cent in Taiwan China and Malaysia. Even economies where wage incomes barely increased, like South Korea, witnessed big increases in house prices.
  • There have been even larger increases in household debt than corporate debt in most of Asia – for automobiles, for student debt, for credit cards purchases, for other consumption based on EMIs.
Arabica Robusta

Europe's Ugly Future: A review of Varoufakis, Galbraith & Stiglitz - Foreign Affairs | ... - 0 views

  • Without a currency that could appreciate against those of her trading partners, German productivity increased and its technical excellence produced a declining real cost of exports, while in its European trading partners, deprived of currencies that could depreciate, stable purchasing power and easy credit produced a corresponding increase in demand for German goods.
  • Stiglitz concedes that austerity may eventually work, but he argues that even if it does, the cost is too high. Better to allow countries to declare bankruptcy and start over, just as individuals and firms can do in a domestic economy. Varoufakis and Galbraith dismiss austerity as flatly self-defeating, because low growth simply ends up increasing the debt-to-GDP ratio.
  • Germany has emerged almost unscathed—at least so far. Berlin has preserved the existing euro system, which advantages it as an international creditor, an exporter of high-quality goods, and a country that suppresses wage increases. It has enjoyed lower interest rates and higher growth than the rest of Europe, which has depressed the real cost of its exports, resulting in a trade surplus larger in absolute terms than China’s.
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  • Such options range from Grexit to his preferred alternative of breaking the eurozone into several subgroups, each with its own currency.
  • Varoufakis and Galbraith would likely sympathize with his proposal and clearly regret that Greece lacked the political courage to forsake the system earlier, when it could have done so more easily. Yet even the radical step of breaking up the eurozone, Stiglitz makes clear, would probably help deficit countries only if Germany agreed to increase domestic spending, rein in speculation, and reduce deficits
  • As Varoufakis writes, “All talk of gradual moves toward political union and toward ‘more Europe’ are not first steps toward a European democratic federation but, rather, and ominously, a leap into an iron cage that prolongs the crisis and wrecks any prospect of a genuine federal European democracy.” Thus, one is forced to conclude that short of a catastrophic economic crisis, Europe can do little more than continue to muddle through in a self-induced state of austerity, thereby undermining its future prospects and global standing.
Arabica Robusta

A painful lesson from Brexit: Why DiEM25 needs a simpler message | openDemocracy - 0 views

  • Since the mid-1970s, once the first post-war capitalist phase ended (with the collapse of the New Deal-inspired Bretton Woods system), those relying on wage income to live have fallen off the escalator. Most of the gains from technology, productivity, globalisation, have gone to the top 1% and none to the bottom 80%. People can put up with poverty, but not with humiliation – not with having their noses rubbed in their poverty by people in yachts, golf clubs and Mercedes Benzes, telling them that their poverty is self-inflicted.
Arabica Robusta

A Blow for Peace and Democracy: Why the British Said No to Europe - 0 views

  • The last bastion of the historic reforms of 1945, the National Health Service, has been so subverted by Tory and Labour-supported privateers it is fighting for its life.
  • A forewarning came when the Treasurer, George Osborne, the embodiment of both Britain’s ancient regime and the banking mafia in Europe, threatened to cut £30 billion from public services if people voted the wrong way; it was blackmail on a shocking scale.
  • The most effective propagandists of the “European ideal” have not been the far right, but an insufferably patrician class for whom metropolitan London is the United Kingdom. Its leading members see themselves as liberal, enlightened, cultivated tribunes of the 21st century zeitgeist, even “cool”. What they really are is a bourgeoisie with insatiable consumerist tastes and ancient instincts of their own superiority. In their house paper, the Guardian, they have gloated, day after day, at those who would even consider the EU profoundly undemocratic, a source of social injustice and a virulent extremism known as “neoliberalism”.
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  • The Guardian once described Blair as “mystical” and has been true to his “project” of rapacious war.
  • Like the Labour Party in Britain, the leaders of the Syriza government in Athens are the products of an affluent, highly privileged, educated middle class, groomed in the fakery and  political treachery of post-modernism. The Greek people courageously used the referendum to demand their government sought “better terms” with a venal status quo in Brussels that was crushing the life out of their country. They were betrayed, as the British would have been betrayed.
  • On the eve of the referendum, the quisling secretary-general of Nato, Jens Stoltenberg, warned Britons they would be endangering “peace and security” if they voted to leave the EU.  The millions who ignored him and Cameron, Osborne, Corbyn, Obama and the man who runs the Bank of England may, just may, have struck a blow for real peace and democracy in Europe.
Arabica Robusta

Back to the Table, Egypt and the IMF - 0 views

  • Now it seems Morsy and his new cabinet, in consultation with the IMF team, are modifying the Ganzouri’s program, according to Finance Minister Momtaz Saeed who served in both cabinets and helped draw up the original plan. Morsy’s economic advisor Abdullah Shehata has dismissed this claim, suggesting the Ganzouri proposal is not a baseline for present deliberations. But there is yet no evidence the government has produced an alternative that is genuinely different. In the absence of an elected parliament that can put the reform program up for public debate, the government may imagine it will be easier to push the reforms through.
    • Arabica Robusta
       
      Neoliberal impositions are always easier in conditions of non-democracy or faux-democracy.
  • If the government’s concern is to improve Egyptians’ productive livelihoods and their ability to meet basic needs then none of the official reform proposals so far pass muster. The loan is really about boosting investor confidence and attracting foreign capital, a top priority for the Brotherhood’s Freedom and Justice Party.
Arabica Robusta

After Greece: Can the Left Change Europe? » CounterPunch: Tells the Facts, Na... - 0 views

  • The public consciousness is, at last, aware of the issues of financial regulation, wealth distribution and the means of production. But questions relating to religion regularly push these into the background (1).
  • Nikos Filis, editor of Avgi, a newspaper with, as main shareholder, the radical left coalition Syriza (2), came to a different conclusion: “The attack may orientate Europe’s future: either towards Le Pen and the far right, or towards a more reasoned approach to the problem. Because security needs cannot be met by the police alone.”
  • “If Syriza had been less intransigent on standing for the rights of immigrants, we would already have 50% of the votes. But this choice is one of the few points on which we all agree.”
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  • They scarcely existed five years ago but now they look like credible candidates to exercise power; and they may be able to relegate their countries’ socialist parties — which share responsibility for the general financial disaster since 2008 — to a supporting role, just as Britain’s Labour Party supplanted the Liberal Party, and France’s Socialist Party supplanted the Radical Party (3). Those changes were permanent.
  • In Athens, that nowhere is all too clear. But austerity’s cruelty, with social and health consequences extending to hunger, cold and increases in infectious diseases and suicides, does not necessarily mean a change of policy (4). Austerity’s architects are well paid to have nerves of steel.
  • Syriza has calculated precisely that free electricity, public transport, emergency food for the poorest and vaccines for children could be financed through more aggressive anti-corruption and anti-fraud measures. The outgoing conservative government admitted that these deprived the public coffers of at least €10bn a year.
  • These measures are not up for negotiation with other parties or the country’s creditors, Milios insists: “They are questions of national sovereignty; they won’t add anything to our deficit. We are therefore intending to implement this policy whatever the outcome of debt renegotiations.”
  • In these circumstances, the European conference on debt that Tsipras called for two years ago in this publication (6) could become a realistic prospect. Ireland’s finance minister backs the idea, and it has a historical precedent in the 1953 conference that cancelled Germany’s war debts, including what it owed to Greece. Syriza hopes the conference it is calling for will provide “the alternative solution which will bury austerity for good.”
  • Merkel has threatened Greece with expulsion from the euro if its government breaks the budgetary or financial disciplines to which Germany is so attached. The Greeks want both to loosen austerity policies and to remain in the single currency. Those wishes are shared by Syriza (8), because a small, exhausted country cannot fight on all fronts at once. “We’ve been the troika’s guinea pigs. We don’t want to become the guinea pigs for a euro exit,” says Valia Kaimaki, a journalist with links to Syriza. “Let a bigger country, such as Spain or France, go first.”
  • Moulopoulos believes that “without European support, it will not be possible to do anything at all.” That is why Syriza accords importance to support from forces beyond the radical left and the Greens, in particular the Socialists. Yet the Greeks have had experience of the surrenders made by social democracy since Andreas Papandreou forced his party to make a major shift towards neoliberalism 30 years ago. “If he had stayed on the left, there would have been no Syriza,” says Moulopoulos. “In Germany too, when Oskar Lafontaine resigned from the government [in 1999], he expressed regret that social democracy had become incapable of even the most insignificant reforms. Globalisation and neoliberalism with a human face completely destroyed it.”
  • Electoral victory for Syriza, or for Podemos in Spain, could demonstrate, contrary to what Hollande or Matteo Renzi in Italy say, the viability of a European politics that rejected austerity. That would challenge more than the German right.
  • Now the threat is much greater. “If we don’t change Europe, the far right will do it for us,” Tsipras has warned. It has become even more urgent to be bold.
  • The task for the left in Greece and Spain, on which much depends, is hard enough without adding onto their shoulders the heavy responsibility of defending Europe’s democratic destiny, and averting a “clash of civilisations”. But that is what is at stake.
Arabica Robusta

The Collectivist, debt colonialism and the real Alexis Tsipras | openDemocracy - 0 views

  • The first of many clashes between Alexis Tsipras and the status-quo powers concerns not debt restructuring and structural reforms but EU-Russian relations. A statement published on the January 27, 2015, claimed all twenty-eight leaders of the EU agreed that Russia bears responsibility for the rocket attack on Mariupol. The attack killed thirty people.
  • In this context, Alexis Tsipras’ expression of “discontent” at not having been consulted may have been justified. “The aforementioned statement was released without the prescribed procedure to obtain consent by the member states and particularly without ensuring the consent of Greece” the Greek government noted. “It is underlined that Greece does not consent to this statement”. Whether the oversight was intentional or a mix-up resulting from the transition of power in Greece remains unclear. That the new government of Greece will exert pressure in order to realign EU policies towards Russia should not however be in doubt.
  • What is more, EU pressure contributed to the failure in the privatisation process of one of Greece’s state-owned energy companies to a Russian-backed consortium. Subsequent criticism to the effect that Greece is not privatising assets at sufficient speed have sounded hollow as a result. EU sanctions on Russia are thus directly affecting some of the few dynamic segments of the Greek economy and have contributed, albeit indirectly, to SYRIZA’s victory in these elections.
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  • All things considered, Alexis Tsipras is wrong on Ukraine. The fact that EU policies have had such a destabilising effect on the country, and that even today the EU is not offering anything like adequate aid, are not sufficient to justify Russia’s annexation of the Crimea and its support for separatists in the East.
  • Whatever one’s take on dependency theory, it should be self-evident that no democratic country can support running primary surpluses of up to 5% of GDP over decades, as called for by the Memorandum, when over 25% of its population is unemployed, poverty is endemic and the productive base of the country has been ravaged. Given similarities to economic conditions during the Great Depression, the EU should consider the victory of a democratic party like SYRIZA a relief. Still, it remains a source of surprise that the EU did not move to link debt reduction to GDP growth before April of 2014, in other words before the Euro elections, when such a move might more easily have been coupled with accelerating the pace of the structural reforms that are needed to strengthen Greece’s private and public sectors. 
  • It is already exposing Greece to criticism. But can Greece’s economy – in particular its banking sector – survive such brinkmanship on all fronts for even a short period of time?
Arabica Robusta

Major Summit Could Put World's Poorest Inhabitants on Corporate Chopping Block | Alternet - 0 views

  • Developing countries are also fighting to be permitted by WTO rules to invest in their own agricultural production and strengthen domestic food security programs that are currently permitted for rich but not developing countries, not even for Least Developed Countries (LDCs).
  • it seems that developed countries never intended to deliver on those development and agricultural reform promises, and have spent the last 14 years of the Doha Round sidelining development issues and instead working to expand the WTO’s neoliberal dictates on services, goods, agriculture and other issues. At the same time, they have taken their corporate wish lists to other forums, concluding the TPP and negotiating the TTIP, TiSA, ITA and EGA mentioned above.
  • This effort, which is the main fight in Nairobi, is even more pernicious because their goal is two-fold: abandon the development mandate, and then open up space to introduce all the new corporate issues they have been negotiating in the TPP, TTIP and other deals into the WTO, including investment, government procurement, disciplining state owned enterprises, and others. Many of these issues are not permitted to be on the agenda in the WTO while Doha is still being negotiated.
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  • In their letter, civil society highlighted that success in Nairobi must mean “[f]ulfilling the development mandate by strengthening SDT for all developing countries, removing WTO obstacles to food security, and operationalizing benefits for the [LDCs].”
  • The corporate and rich country government agenda of permanently abandoning the development mandate must be forestalled, along with the imposition of a set of already-rejected or ill-defined non-trade ‘new issues’.”
  • Experts have detailed how governments won’t be able to implement many aspects of the deal, however, if agreements like the TPP, TTIP [PDF] or TiSA come into force. Much the same could be said about the WTO. Developing country unity and North-South peoples’ solidarity will be essential to a positive outcome at the WTO. Let’s make sure that the United States, the EU, Japan, Australia and others realize that the imperative of development and public interests must come before corporate profit. A good deal should be struck in Nairobi. But if not, then no deal is better than a bad deal.
Arabica Robusta

Exposing the Big Lie at the heart of this economic catastrophe | openDemocracy - 0 views

  • Whole sections of the 'west' are in recession or near zero growth. This was not caused by some kind of mass activity by working people. It wasn't caused by governments in one or several countries spending too much. What has caused the recession in the first instance is that the financial sector ran up huge debts, far, far in excess of public debts and deficits, as it went in for some wild speculative behaviour - a good deal of which involved them selling debts to each other!
  • So, the speculative bubble which burst in 2010, was in essence an attempt by financial capitalists to find more and more profitable opportunities. In the anarchic lunacy which is called 'good business', more and more of them borrowed money to buy debts which they thought would be profitable for them.
  • What has happened this time round in the boom bust cycle is that the capitalists have a huge great brake on the system: their own debts. However, as you know, the big lie - no The Big Lie - that has been put about for the last two years is that the big brake is government debts, ie the money and the interest payments that are paid out for our benefit on education, health, welfare - and, though I don't agree with it - defence, because theoretically it's there to defend us. 
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  • Meanwhile, the global take home pay for workers continues to go down in real terms (ie in relation to people's bills) and go down in relation to the amount of money we can call profits. So simply put, the vast majority of people have less money to buy the goods that the capitalists would make and try to sell, if they could. The main pressure downwards on pay comes from government initiated pay freezes, unemployment, part-time, short-term employment and lack of union organisation to resist this pressure.
  • In my dream world, Labour would be saying all this. They would be spelling it out with diagrams, films, and leaflets. They would be showing that a tiny group of people held and are still holding the world to ransom on account of their speculative lunacy and greed. They would be showing that each time Osborne and all the press pals say that it's the deficit that's the problem they would say, Oh no it isn't, it's the private debt. Every time Iain Duncan Smith and his press pals point the finger at this or that 'benefit cheat' or 'welfare dependent underclass', Labour would point the finger at the vast debts seizing up the system causing much more damage than a few people working a small time racket. They would point the finger at the vast millions people earn who manage these debts and who are of no productive use whatsoever. They are parasites. And they would talk about the greed-dependent overclass who got us into this fix. 
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