IMF: The Times They Are A-Changin’
Have things changed at the International Monetary Fund? Or is the world just witnessing yet another in a long series of global economic double standards?
IMF Managing Director Dominique Strauss-Kahn says that the “need for public intervention” to address the global financial crisis “is becoming more evident.” Strauss-Kahn has urged for a global fiscal stimulus, writing that, “Timely and targeted fiscal stimulus can add to aggregate demand in a way that supports private consumption during a critical phase.” The IMF has announced its support for the fiscal stimulus plan in the United States — a country with significant budget deficits and massive foreign debt.
The support for government intervention runs directly counter to the IMF’s longstanding support for strait-jacketing governments in poor countries, by demanding “structural adjustment” — a series of market fundamentalist, corporate-friendly policies, including hyper-restrictive macro-economic policies.
So far, there is little evidence that the IMF is changing the way it operates in developing countries. But maybe the times are changing, whether the IMF likes it or not.
The IMF gets its power from a gatekeeper role in international finance and donor circles. International lenders and government aid donors commonly limit their lending and aid donations to countries in the IMF’s good graces. The logic is that the IMF is competent to determine that the recipient countries are pursuing sensible economic policies, and therefore equipped to manage loans or aid.
The IMF has capitalized on its gatekeeper role to demand countries pursue a cookie cutter, market fundamentalist agenda of blind deregulation, sell-offs of public assets to corporations (privatization), opening up economies to foreign investors, tariff cuts, and government spending cuts.
There is overwhelming evidence of the failure of the IMF’s policy agenda. Mass privatization has led to enormous concentrations of wealth and encouraged corruption. Deregulation has contributed to financial crises, including those that foreshadowed the current global crisis centered in the United States. The overall economic model had impoverished tens of millions and left developing countries poorer. And government budget ceilings and inflation targets have prevented countries from expanding desperately needed investments in healthcare and education. Indeed, the IMF’s own Independent Evaluation Office has found that the Fund requires poor countries not meeting Fund inflation targets to divert most new donor aid. Instead of spending additional donor money on healthcare, for example, countries must use it to build up foreign reserves or pay down domestic debt.
Although the Fund has promised that it would reform the way it imposes conditions on poor countries, a new report from Eurodad, the European Network on Debt and Development, finds that, over the last six years, IMF conditions have not changed in number or kind.
One thing has changed, however. Impressed by the IMF’s repeated failures, middle-income countries have paid back their loans to the Fund, and are not taking out any news ones.
This in turn has two consequences. For now, at least, the IMF has lost its hold over most middle-income countries — but it maintains its iron grip on the world’s poorest countries. And, the Fund is experiencing a financial crunch of its own. It had depended on the interest payments from middle-income countries to support its budget.
Developing countries are not shedding tears over the IMF’s financial distress. “At long last, the IMF is experiencing first hand serious budget cuts,” says Cheikh Tidiane Dieye of Environment and Development in Africa (ENDA), based in Senegal. “The poetic justice of this is palpable. In Senegal, the IMF has mandated budget cuts for years. As a result, we have been unable to invest in health care, education and other essential services. If the IMF’s loss of financial power is accompanied by a loss in political power, this could be good news for all Africans.”
The IMF’s governing body has just approved a proposal that would involve cutting its staff by about 20 percent and selling some of its gold stock to create a trust fund that would fund administrative operations in the future.
The gold cannot be sold without U.S. approval, however, and the U.S. representative to the Fund cannot support gold sales without Congressional authorization.
Health, development and labor organizations in the United States are mobilizing so that Congress approves gold sales only after achieving fundamental changes in IMF policy. Last week, 80 U.S. organizations — including Action Aid International USA, the AFL-CIO, Africa Action, the Bank Information Center, Essential Action (which I direct), 50 Years is Enough, Global AIDS Alliance, Health GAP, Jubilee USA Network, the ONE Campaign, Oxfam America, RESULTS USA, Service Employees International Union (SEIU), and the Student Global AIDS Campaign — urged Congress not to approve gold sales until first achieving real change at the Fund.
The letter says the Congress should require the IMF to: rescind the use of overly restrictive deficit-reduction and inflation-reduction targets; exempt expanded health and education spending in developing countries from IMF-imposed budget ceilings; permit developing countries to spend foreign aid for its
intended purposes; delink debt cancellation from harmful economic policy conditions; and disclose crucial documents currently kept secret.
If the gold sales deal is approved, the IMF will become self-financing, and the U.S. Congress will lose much of its power to demand changes in how the IMF operates. So the present opportunity will not soon present itself again. There is no certainty about when the gold sales authorization will come before Congress, but it now seems as though it may be delayed until 2009.
Perhaps the IMF under the leadership of Strauss-Kahn, who took the helm of the institution only last September, is ready to re-evaluate its market fundamentalist, corporate-friendly policy prescriptions for poor countries. A statement issued by the Fund last week said that African countries did not need to raise interest rates in response to inflation driven by higher prices of food and fuel, and that some subsidies might be permissible in some circumstances. This is perhaps a baby step forward.
But if the IMF is not ready on its own to jettison its long-standing policy demands for poor countries, it may soon find that it has no choice. Representative Barney Frank, D-Massachusetts, chairs the House Financial Services Committee, which must approve the gold sales proposal prior to the full House of Representatives considering the issue. At the 20th anniversary celebration of the Bank Information Center last week, he strongly denounced structural adjustment, stated as a matter of fact that gold sales will only be authorized if additional IMF gold is sold to cancel poor country debt, and made clear that he intends to obtain policy changes from the IMF as a condition of permitting gold sales.
Robert Weissman is co-director of Essential Action, a corporate accountability group based in Washington, D.C. that focuses especially on international issues and has been very involved in the access to medicines campaign. He is also editor of Multinational Monitor magazine. With Russell Mokhiber, he is editor of a weekly column, Focus on the Corporation, archived at http://lists.essential.org/pipermail/corp-focus.
IMF policy change translation for us common folk: The World economy is screwed, you can’t afford to eat, climate change is about to bite us in the ass, and the oil is running out.
The rich can hide, the poor will starve, and the world’s middle class will be handed the bill.
Thanks for coming out.
In a CNN news piece, the city of Youngstown, Ohio is planing to raze abandoned buildings, tear up streets, cut lighting and sewage as well as cutting back on police and fire services in low population areas of the city.
It’s being called Plan 2010.
I call it game over.
If the IMF is finally getting its posterior soundly beaten this is the best news I’ve heard in a long time! Couldn’t happen to a nicer bunch of, of …… well, you fill in the blanks, I’m trying to be civil, ‘though it’s very difficult with this crew of pirates.
Am in the middle of Naomi Klein’s “Shock Doctrine” which documents IMF crimes and failures in excruciating detail. One of the best books I have read in a long time, ‘though I suspect I am a late comer to this publication among CD readers.
Klein talks about the “Chicago School” concept of wiping a country’s slate clean and starting again from scratch, otherwise known in the real world as “economic genocide” dressed up as “structural adjustment” in the name of “creative destruction”. Wouldn’t it be nice if, instead, we would wipe the world’s slate clean of the IMF, the World Bank and the WTO and let countries adjust their own structures as they see fit?
This is a good start. Now that even the Emperor admits he is naked, let “structural adjustment” of the Washington consensus proceed - lickety-split.!
The IMF economists build their castles in the air, their utopias of “free market” economies, with the assumption that the major players, usually the larger corporations, in the world economy will be honest and fair-minded and play by the rules (i.e. they will not work to change rules or break rules to create rigged markets). But if all major players are honest and fair-minded and play by the rules, then a socialist system or just about any other kind of economic system should work too. The trick is to design a system that prevents or at least discourages the players from inappropriately changing or breaking the rules, but that becomes virtually impossible when the universal value system promotes selfishness and the single-minded pursuit of advantage for oneself.
This whole corporate-capitalist approach seems very limited in the extent to which it can ever maximize the welfare of the whole.
Just in case Barney Frank unexpectedly dies remember this article and his denunciation oif IMF policy. The dsiciples of Mammon are a bloody and vicious lot.
I doubt the IMF can change very much.
Let the poor economies gang up on the IMF and declare default on the basis that the loan contracts are illegal. (They are illegal.) The IMF goes belly up, and then people can start over.
The Chicago School of economics needs to be destroyed in reputation and as an institution.
I simply want to reduce the IMF to the size where I can drag it into the bathroom and drown it in my bathtub.
Sounds like Dracula has drained so much blood from his victim that even he has recognised that death will come soon — and then, obviously, there will be no more blood. Recognising this he decides to act — right after he has had another pint.
“Kill the best and buy the rest. Send a buck to make a buck. You don’t give a flying fuck about the people in misery……
IMF, dirty mf, takes away everything you can get. Always makes certain there’s one thing left; keep them on the hook of insupportable debt” –Bruce Cockburn, And, They Call It Democracy ( I especially like the live in Toronto version ).
Yes, thanks to countries like Venezuela which told them to shove their $ up their ass, as well as the inability of the poorest countries to pay back, Dracula’s blood supply is indeed dwindling; he has nightmares about the bathtub drain.
Poet April 14th, 2008 2:13 pm
“Just in case Barney Frank unexpectedly dies remember this article and his denunciation oif IMF policy. The dsiciples of Mammon are a bloody and vicious lot.”
Poet,
As much as I like Barney Frank and appreciate his intellect, he is a politician on Capitol Hill who believes in the “free market” which has been expoloited, manipulated and controlled for decades by “plunge protection teams”, “the president’s working group on financial markets” and perhaps a plethora of other unknown manipulative entities. In fact, the intelligence czar in this country can waive SEC rules: http://www.businessweek.com/bwdaily/dnflash/may2006/nf20060523_2210.htm?campaign_id=rss_daily
The point is, we have no idea how much manipulation goes on behind the Iron curtain in this alleged “free market” Democracy we live in.
Barney Frank will undoubtedly remain faithful to the Federal Reserve Bank’s “fiat currency”; its power over the people; and of course, the ability of the government to borrow and spend like drunken sailors as long as it remains in place.
http://www.financialsense.com/editorials/phillips/2008/0414.html
http://www.gata.org/
Gail: “The point is, we have no idea how much manipulation goes on behind the Iron curtain in this alleged “free market” Democracy we live in.”
No, in the sense they will never tell us, we do not know and, even if they did let on anything, I for one would simply not believe them — but I think we can take a pretty shrewd guess. By the way, you can’t spell: it isn’t Democracy, it’s Plutocracy.
I have been doing some reading here and there and have come to a sobering conclusion.
Many economists and financial types are openly but quietly predicting the utter collapse of the US dollar.
Not a bounce off the trading room floors as has been expected.
No, they are speaking openly of an outright smash flat into the Wall Street sidewalk ala the window jumpers of 1929.
Should be fun to watch.
“There is overwhelming evidence of the FAILURE of the IMF’s policy agenda. Mass privatization has led to enormous concentrations of wealth and encouraged corruption. Deregulation has contributed to financial crises, including those that foreshadowed the current global crisis centered in the United States. The overall economic model had impoverished tens of millions and left developing countries poorer. ”
It wasn’t a failure, it was intentional, to get control over a nation by making them debt slaves and stealing their resources, and privatizing (selling to foreigners) their industries.
Now the world knows about the con, nobody wants anything to do with the IMF/World Bank. They figured it out. IMF has nobody to loan money to. So what happens, we raise the price of oil and food, to force them to borrow, and they still resist. Chavez and China offer loans with no strings attached, so we stir things up in Tibet and threaten Venezuela.
Yet they want to sell gold, worth about 2 trillion at current market prices. Why? The IMF wants to loan the US money to replace China as our banker, since we are not making them too happy right now, and give us the 3rd world treatment and make us their debt slave. I say let the IMF return the gold to the countries that donated money, based on their contributions made to the IMF (meaning we would get much of it), and close up shop, and send the UN to London or Jeruselam, but get it out of the US, along with those UN troops rumoured to be lurking within our borders and ready to help out in the next emergency.
Galen has said it all except that most of those folks that Obama referred to will be reloading!
Yes, Galen is double right!
Interesting that an article detailing the failures of the IMF can totally ignre the ALBA, the new Bolivarian Bank of Latin America. Most of the newly left-leaning SA countries have joined. A branch just opened last week in Havana. It is financed by the wealthier countries, including Brazil, Venezuela, and Argentina and is directly aimed to put the IMF out of business as the Usurer of Last Resort.
The loans are aimed at financing government projects that promote the Health and Welfare of the populace, not the wealthy. This is really a big accomplishment in the land of Banana Republics, and a direct challenge to the Monroe Doctrine and our insistence that only we know what is good for the countries to the south.
The moderate income countries are not just refusing to borrow from the IMF, they are offering loans in direct competition with it…
if you have any cash left.. i suggest turning it into euros before the US dollar is no more… i figure bout 2 yrs max till it is ass wipe
JOHNNY CANUCK: This is a question I struggle with, too. The elite will do all they can to buoy things up at least until after the election. They can’t afford to have the plug pulled with a republican in the big hot seat. I study the “As above, so below” cosmic equation and 2 of the 4 outer planets will occupy the same relative positions that led to the Great Depression beginning at the END of 2009.
In terms of astrological prediction, Saturn is the planet of conservative protocols; it forms challenging angles every 7 years and explains why the Hebrews (recognizing this cycle) put excess grain aside to carry them over the 7 year lulls. Pluto is the planet that relates to massive breakdown that can include grave violence. It’s associated with death & rebirth, and phase changes that prove monumental. When two planets are 180 degrees apart, or 90 degrees apart, it indicates that the energetic protocols they represent are in conflict. The hardest of these scenarios is represented by Saturn square Pluto. This will occur in autumn 2009 through spring 2010. So your timing is celestially right on!
Johnycanuck- Some of the financial types are saying this summer…
IMF = Instant Misery Follows! The IMF should quit preaching to the world. After all, it was the IMF’s ‘rules and regulations’ imposed on Third World nations that brought about a LOT of misery to a LOT of people. Now pretending to be the saviour is just plain hypocritical.
THE UNIVERSAL ECONOMY.
PART ONE.
1…All ideological experiments have failed.
2…Poverty is in the “too hard” basket.
3…”Markets” exist primarily to make money for the rich.
4…International Production Capacity is a pawn enslaved to the bottom line.
5…Economic Rationalism destabilizes family community and the Economy. 6…Free Enterprise will not provide work and income for all unless we intervene.
7…Money and International “Exchange” systems are corrupt.
8…Uncontrolled personal debt and interest rates hurt families disproportionately.
9…Taxation in its current form is counterproductive and requires revision.
10..We need a Government Bank to control and issue credit.
11..We need positive mechanisms to provide community services.
12..We need positive mechanisms to provide infrastructure.
13..We need positive mechanisms to care for all people.
14..Industrial Relations must serve employers and employees fairly and equally.
15..Freedom of choice must apply equally and be meaningful and universal.
16..We must recognize that globalisation is a profound mistake.
17..Money must be organized to serve the needs of all humanity.
18..Sovereign Nations need protection from money markets and exchange manipulation.
19..We need a new world order of Exchange Control and Banking.
20..Our”Westminster Democracy” is a farce and needs to be revised.
21..We need “ethical” not “ideologically biased” Politicians.
22..Above all we need truthful and transparent Leaders.
23..Domestic Economies must be isolated from foreign private manipulation.
24..Domestic Currency must not be traded on International Exchanges.
25..Our external currencies will have no domestic circulation.
26..Governments must set Exchange Rates to end currency manipulation.
27..All month to month domestic tax collections will cease.
28..Free enterprise is of paramount importance.
29.. Government will issue infrastructure contracts to private sector and will control and direct health, housing, education universities qualified professionals and research.
30..The Government will create debt free Social Capital sufficient to balance the demands of providing the Social Wage ( to eliminate poverty) and infrastructures.
PLEASE CONSIDER OUR CHILDREN’S FUTURE.
THE POLICIES ADVOCATED HERE CAN BE ACHIEVED BY A DEMOCRATIC FREEDOM LOVING PEOPLE.
ALL IDEOLOGICAL EXPERIMENTS HAVE FAILED.
The human race has evolved from the early days of hunting and gathering. Given the rate of growth of human populations this way of life could not last. Then there was serfdom and slavery. Late in the nineteenth century Chancellor Otto von Bismarck in Germany introduced a system of social insurance.It was revolutionary for the times. Mandatory insurance, using collections from employers to pay for statutory benefits a universal scheme managed by government.
Social conscience was alive and well in Great Britain. Thoughtful individuals such as Cadbury and Robert Owen in Lanarkshire provided housing for workers with some attention to health needs and regulated hours of work. It was not until 1935 that America introduced social insurance for the old which soon included support for disability and Medicare.This was part of President Franklin Delano Roosevelt’s “New Deal”.
Meanwhile Great Britain had progressed from Transportation and Work House and Debtor Prisons to a program of National Assistance a standard which lay between meagre and miserly. The years of Queen Victoria had taught them nothing despite having people like Charles Dickens writing great works on the subject.
Modern day Social Security is, I grant you, generous by comparison.The problem with it is, it is not universal, not available to all who need it most. (Worldwide)Once paid the Government is then forever seeking ways to cut it back.Because we are told, the Tax Payer must have his tax reduced.Politicians do this as one string,among many others, to the bow which is used to influence voters.This is a form of ideological arm-twisting otherwise known as bribery,It appeals to the venal side of our nature and we fall for it. The adversarial, ideological style of our politics allows one side to convince the other that people who do not have any income do not need or deserve to be cared for.
We must come to understand permanently and forever that the human population is expanding exponentially and will need feeding housing and caring for the rest of time. The politician the economist the corporate guru that tells you that free enterprise will take care of everything and that all we have to do is go out and get a job is deliberately lying to you they are simply protecting their domain their kingdom. If what they say is true it would have been done by now; the truth is it is a demonstrable mathematical and physical impossibility.
Industry and the Corporation is not interested or concerned with the general welfare of the population. This responsibility rightly belongs to Government.
During my long years observing the torturous logic and downright deceit used by Politicians, it is easy to understand why one side of our community appears uncaring and hard-hearted. Universal Economy will change all that.
…….POVERTY
THE TOO HARD BASKET. The great strength of the Universal Economy lies in the fact that we revolutionise the way we regard money and how it is created without forsaking or compromising free enterprise.
We have been brainwashed to believe that if we hold a dollar note in our hand it is because, somewhere, there has been an excess return of output value over and above the relevant input value, called profit. Put another way, when inputs equal outputs there is no surplus to spend somewhere else. We can accept that this is a necessary method to use when conducting business.
Plainly, caring for humanity is not a business in the commercial sense. When a child is born out-put\production? are we then to require a proper accounting of the inputs? No this would be an impractical if not improbable requirement. Populations are growing exponentially and we must put in place a system to provide for them.
Creating Social Capital is not a new idea. Consider that great slabs of America were founded, in effect, by allowing settlers to take up for free, large tracts of land. This is tantamount to printing money in support of the Private Sector. The fact that North American Indians had to be dispossessed along the way has no bearing but the Indians certainly paid a price\loss?
A similar process occurred in Australia.
The point is, that when we cast aside our archaic belief that says we can only have money if we have first of all earned it, we then free ourselves to provide for the poor up to a standard that does not impede the growth and development of free enterprise.
Does anyone still believe that free enterprise is capable left to it’s own needs and morality, of providing, not only work and income for every living soul, but also the phenomenal amounts of cash or credit required to provide necessary infrastructures? This would require a very high volume of continuously rising profits; burdening future generations with debt is not the answer. The future will create new and continuing demands of it’s own.
The answer is a moving target that lies at a point somewhere between what we now call Social Security and that part of economic income, which is required for the successful development of Free Enterprise.
The Universal Economy will eliminate all contention and acrimony related to provision for the poor generated by right wing conservative even fascist governments in the minds of those who pay taxes.
THE UNIVERSAL ECONOMY WILL ELIMINATE
POVERTY.
Markets exist primarily to make money for the rich.
This is not a criticism or complaint, it is a simple recognition of the facts, free enterprise will not work any other way,ask any stock holder. It needs stating here because it helps to illustrate the motivation and direction which free enterprise is bound to pursue.
Business and Industry require an environment conducive and consistent with the development of their activities, just as the community needs a stable predictable environment that provides for every day basic wants and family responsibilities. We do not have to perpetuate the sense that says take this work or you will not eat, that attitude creates a population unproductive, resentful, and antagonistic.
The Universal Economy will encourage Business and Industry because they will no longer be required to collect Taxes and Superannuating from Employees; they will no longer be required to pay week to week or month to month Taxes or any kind of Goods and Services Tax. Their year-end balance sheets will be taxed fifteen percent of net profits.
Therefore this will considerably reduce workloads for staff and will also reduce production and operating costs making way for lower export prices, the wages of workers will also be reduced by the amount of tax they would normally expect to pay.
Employers will be free to hire those who are unemployed and who are in receipt of the Government paid Social Wage. These employees will continue to collect the Social Wage without reduction this will be the encouragement that causes them to progress out of poverty. The burden will be on employers to retain them as motivated contented appreciated workers or lose them to greener pastures. A free market of choice for employees and employers.
To the extent that the workforce is content and well treated, then, to that extent will Unions be relevant, or not. A contented secure workforce is a productive one.
The Universal Economy will create a near perfect environment for business to thrive; the workforce will be educated and trained, provided with good opportunities for housing and families, all secured by good opportunities for education, training and health care.
Do not be led into thinking all this is impossible, once debt free Social Capital supply principles are embedded anything is possible.
We may regard the economy as a huge engine just like any truck. It not only requires regular maintenance and services but it also needs a constant supply of fuel to be available for it to use as and when the need arises once the truck is refuelled we would not normally contemplate sucking it out again. Just as this would be dangerous in the truck example, so it would interrupt the smooth working of the economy. Interest rates and taxation, inapropropriately applied, have always stunted economic growth; this would have been avoided had we utilised the far more relevant techniques of fractional reserve banking and restrictions on credit creation.
In the Universal Economy the Government sector can set fixed long-term domestic interest rates for home ownership, agriculture and farming. Importantly, all of the foregoing mitigates in favour of reduced inflation .
INTERNATIONAL PRODUCTION CAPACITY IS A PAWN ENSLAVED TO THE BOTTOM LINE.
This endeavour could be in the top two of “the most stupid” short-sighted community destroying resource wasting profit seeking activities of the last one hundred years.
Our present economic wisdom insists that every person, able bodied or not, must be in gainful employment. From people in wheel chairs to mothers whose primary duty is to raise our next generation of educated skilled law abiding citizens. Stupid and short sighted? Humanity not Mammon must come first!
We are exporting essential machine plant and a concomitant of this is the loss of skilled machine tool operators and engineers. We are deskilling our workforce at an alarming rate. Whole sectors of production and engineering capability are being lost to us; even now it will take many years to recover, assuming that common sense may still prevail. Profit seeking?
Consider then, the colossal element of resource waste involved. Whole production line plant and equipment is consigned to the scrap heap, some is exported. Then we import the replacement product from far away. This incurs the use of purpose built shipping lines, huge investment to expand and develop our maritime ports, incredible waste in fuel and oil resource.Is this not a stupid short sighted resource wasting affront to commonsense? Paid for by consumers and taxpayers.
And what will result when our nation requires these resources at home for strategic purposes? What will our options be when those who supply our imports now realize they have the whip hand and can raise prices from a monopoly position? Have we forgotten there is a looming shortage of cheap oil? When will we learn to stop the cheap exporting of our mineral and natural resources and instead go back to solid principles such as value adding at home? Stupid and short sighted? You betcha!
The concept of Universal Economy removes the need for these kinds of stupidity to occur. The Universal Economy is structured so as to satisfy the domestic needs first and will exclude unnecessary commercial interaction whilst allowing what is necessary. This is possible because the central motivation in The Universal Economy for capital and resource planning is to make us an Independent Sovereign Nation.
The Corporate Commercial Force has manipulated and abused our human and capital resources in the name of “profits first” for too long. The Universal Economy will give them more opportunity than ever before at home,will stop exploitation in the work force and yet give the workforce a sense they are valued and treated fairly and equitably.
There is plenty of opportunity available for improving the “bottom Line” using the concept of Universal Economy without enslaving the people to it, and without corrupting the National Sovereignty of the Nation.
SOVEREIGNTY BELONGS TO ALL THE PEOPLE.
….Economic Rationalism and Globalisation Destabilizes Family and Community.
Financial Deregulation was to give us low interest rates and reduced charges for consumers; foreign investment was to pour in to underpin economic growth and provide us with a higher standard of living. These things have occurred but only as fleeting phantom forms. The world is now entering a period of prolonged recession/depression, interest rate are sharply higher.
We must exercise extreme caution, we are running the largest foreign trade and consumption driven debt accounts in Australia’s history, financial Institutions here and around the world are sliding into bankruptcy. Working people are losing savings and retirement funds on an unprecedented scale. The great free enterprise machinery has organised a massive transfer of wealth from hard earned savings to the sloth, criminality and already obscenely wealthy rich.
This is a process which can only be reversed by increasing manufactures and finding markets which are permitted to import our agriculture without risk of penalty from our one sided self imposed trade agreements. To the extent that we have a higher standard of living we must not forget that this has been created on the back of a contrived property and consumer credit boom and very, very cheap imports from China.The bust cometh and will soon implode upon us all.
Our production capacity has been raped. Both the manufacturing and agriculture sectors are under great threat and are disappearing as we breathe. Yet more and more food is being imported. We have not enjoyed the expected inflows of investment capital to boost production capacity and the agriculture sector is really our only hope of increased foreign exchange earnings. The exportable capacity in agriculture is estimated to be less than twenty billion dollars annually.
With foreign debt at around five/six hundred billion dollars we have little chance of paying it off and interest costs on all the borrowed cash will cripple our growth prospects. All of Australia’s recent growth has come from cash borrowed overseas to fund consumption and the domestic home building and mortgage market. It is estimated that Australian Banks and Financial Institutions have some twenty trillion dollars of exposure to the derivatives market and that some five percent of that is irrecoverable; if so they are going bankrupt so get your money out now.
We can imagine that it will not be long before the IMF and World Bank will step in to further “Economically Rationalise” our economy. They will force more privatisations, deep cuts in services such as education health and social security. They will want charges increased and taxes reduced for the rich. Whether we like it or not inflation is on the way and cannot be stopped. Much unemployment will result. Recovery will take years. Say goodbye to all the middle class welfare, families are going to hurt.
Is it not families that are most vulnerable? The most exposed to increased prices and interest rates, cuts to health and education services?. Who will suffer most when unemployment comes calling? All of this is what made the Howard Government Industrial relations and anti terrorism laws and reforms so urgently necessary. Fascist leaders around the world have all made these preparations they are ready for trouble because they know it is coming.Scripted by International Corporate Power and Financiers.
Notice that the Rudd Government has allowed Australian Workplace Agreements to continue on for five years. These will be the worst of our recession/depression years, the years when AWA’s will be most utilised by employers to reduce wages and benefits and to facilitate mass sackings without redress or compensations such as “notice” and “redundancy”.
All so-called democratic Governments must now dance to the instructions flowing from the centres of Corporate and Financial Power. This has been the real purpose behind Prime Minister Rudd’s world tour. He left Japan out because he was instructed to do so.
These centres of Corporate and Financial power require that Australia revert to a banana republic type wage structure in order to cut costs of production to a level that will motivate the much needed investment to reinvigorate the manufacturing sector.
These changes are intended to “make it easier” to re-establish Australian Work Place Agreements and this will lead to the universal loss of entitlements of all variety. Any trade-off value can then be clawed back as future wage increases are controlled downwards. The new anti terrorism laws can be used to come down hard on those who will undoubtedly protest in the street.
CHOOSE THE UNIVERSAL ECONOMY,
Free Enterprise will not provide work and income for all unless we intervene.
Put at it’s simplest we could argue that we have lived with ‘Free Enterprise” since time immemorial.
One outstanding and blindingly obvious result of this is that there have always been poor destitute unemployed, uncared for peoples.Yes, but they have never been so numerous than they are today. And if Capitalist Free Enterprise is so wonderful why has it not stepped up to the plate?
We recognize the condition exists at Government level as evidenced by Chancellor Otto von Bismarck’s early social programmes and the creation of Communism and it’s concomitant Socialism. President Castro and Che Guevera deserve all praise for the longevity of their creation against all the odds.
However, what is also blindingly, bleeding, obvious is that despite some brave attempts around the world to have socially caring communities they have all failed. Such policies get on the starting blocks, run for a short time and then fail the test of continuance ,it can be said, because such policies are totally and utterly incompatible with rules laid down by our ruling Financial and Corporate Elite. Financial Manipulators, crooks and those called “economists” whose function it is to legitimise those rules to prove them right by a multitude of arguments.
My words are chosen from the rich experience gathered from around the world after witnessing first hand the devious partnerships devised twixt Politicians, Corporate Power and Financial Institutions. Together they use Democracy and financial sleight of hand as the tools that facilitate their designs. One example was the Howard Governments advertising of Industrial Relations Reform.
There is no doubt that what these messages deliver is substantially true. However, what they do not say is the most important message of all. Yes,they will make it easier to introduce the workplace agreements,that is what all employers want, but under such agreements nothing can be guaranteed precisely because it is an individual contract. Neat?.The Australian workforce is being downsized big time.
If this is not true then why do we need all these changes?
Surely it is possible to agree with the contention “Free Enterprise will not provide work and income for all”. Therefore we are duty bound to learn from our mistakes.
The Universal Economy represents the most thorough, most complete, all inclusive, universal answer to Poverty, Unemployment, Ideology, Infrastructure, Provision of Social Services,Taxation, Pensions, Health, Education etal; plus it serves to legitimise Free Enterprise as never before. Financial Market Manipulators and crooks are deprived of some opportunities but legitimate commerce will thrive.
Essentially, this is a marriage acceptable to both free enterprise and the general public at large. It is the revolution we have got to have.
THE UNIVERSAL ECONOMY GIVES FREEDOM TO EVERYBODY.
Money and International “Exchange Systems” are Corrupt.
The trading and sales across foreign exchange markets by Hedge Funds and other traders of Currency, Derivatives and Futures are open to fraudulent activity.The value of such trades is in the trillions of dollars daily far greater than the combined GDP totals of the worlds trading Nations.Millions of dollars are being made selling “Rights” to “Rights” and not actually producing anything.
These trades can and do distort Markets by amassing rights to oil, for example, thereby creating a manufactured shortage and forcing up the price. That in turn will exert unnatural tension in our economies forcing up commodity prices for us all. We can manage without these.
This type of Money Market can be used for laundering illicit money. It is also capable of bringing whole economies down and must be disbanded.
Currency trading in particular, when traded by powerful Hedge Funds in great volumes, can cause instability in targeted economies making it necessary for Governments to step in to provide support. Domestic economies are severely disrupted. This is manipulation purely for the sake of making profits for a few individuals. We can stop this too.
In The Universal Economy, each Nation or group of Nations Trading as Blocks will each have a Domestic Currency that circulates internally and does not have any direct relevance to any International Currency. The International Currency, which ultimately should be one currency common to all international trading Nations, will be traded by Governments or it’s nominees, through it’s Banks, at Exchange Rates set by governments, where possible, embedded in trade agreements which will fairly reflect the economic and general welfare of the Nations.
For example, all trades must have a stated reason for wishing to purchase a domestic currency, at this point the exchange can be reviewed in the light of desirability and refused if necessary. Obviously those who require exchange for legitimate use within the domestic economy may be accorded favour at the Governments pleasure. The Government takes in the International Currency and issues the agreed amount of Domestic. Yes, there will be premiums for these services.
When domestic currency wishes to leave it too will be charged a premium. After all we would have allowed the use of our Nations Free, and Tax Free, infrastructure and Labour Market, for which they should expect to make a contribution. Such premiums need not be so high as to discourage the interaction of Commerce and Industry. The Universal Economy will be a near perfect environment for legitimate entrepreneurs.
Since all credit and Capital for use Domestically will be created by the Government the need to borrow from International Markets for the purposes of building infrastructure and our domestic house building, will be severely reduced. The Captains of Industry can negotiate directly with Government and Trading Banks.
Clearly, paying for imports will still be a function regulated by Export Income and other external earnings. The new opportunities are endless and we should do very nicely.
A new indicator of GDP will be the level of government created Infrastructure.
Uncontrolled Personal Debt and Unregulated Interest Rates
Hurt Families Disproportionately.
There must be set a level of Income below which it will be forbidden for individuals to be given Credit. Others may assume responsibility if willing. Creating Mortgage Accounts that allow re-draw to people on limited incomes should also cease. Family homes must be protected.
Credit Card and other Personal Borrowing must be allowed in accordance with prudent income-equity ratios overseen by strict repayment stipulations.Ultimately the credit manager may elect to relax credit restrictions based on trust and individual reputation, which indicates the banks willingness to assume risk . Uncontrolled Personal Borrowing is too easily channelled into consumer booms which distort the Economy creating unemployment and hurting families most.
Since Government will be the creator of much Domestic Credit it will be possible to control the level of interest percentage set for family home borrowing and to maintain a fixed rate. Families need certainty in order to plan and be able to live within budget. Government will only provide this service to the lower paid who are building or buying modest homes, the private Sector then takes over. Of course if the Private Sector will comply with this criteria then nothing will stop them.
Families, who by definition, have the largest weekly expenses for just about everything, as well as certainty and security of tenure will be hurt disproportionately when unemployment comes calling, will be protected in their homes and tenancies.
By advocating to create the Universal Economy you will be helping to protect future families because such problems will then be non existent.
Also, all those in the community who need it will be given a Social Wage the only qualification for which will be that you live and breathe. The Social wage will continue to be paid well into and beyond and during any period of gainful employment taken up. The Social Wage provided to families will reflect the size and living costs of family appropriately.
The Universal Economy will thus provide a suitable environment to enable all families to flourish and the children have every good opportunity to develop into respected law-abiding citizens. Children need at least one parent to guide them whilst the other is working and the Universal Economy facilitates that option for all who wish to exercise it..
THE LIVES OF PEOPLE NEED NOT BE SUBJECT TO THE CAPRICIOUS NATURE OF CAPITAL. REGARDS, THOMASTHEAUSSIEBATTLER