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TechnoratiSwear Off 'Market Fundamentalism'
With the global economy facing severe recession, lame-duck President Bush is hosting the leaders of 19 other major countries in Washington this weekend to try to prepare a coordinated response.
A noble goal. But, alas, Bush is the wrong host. Washington is the wrong venue. His guest list is too selective. And Bush has already made it clear he is still clinging to erroneous policies that created the crisis in the first place.
The United Nations offered to host the summit, which would have been appropriate. This crisis has truly gone global, hitting not just financial markets but also workers, businesses and consumers in all countries -- rich and poor alike.
But Bush opted instead for his own turf and his own invitees, which include leaders from rich countries and some larger developing countries. It is not quite the "Coalition of the Willing" that Bush used to try to rationalize his buildup to the Iraq War, but it's certainly not a fully global coalition either.
Bush's reluctance to face a more representative group reflects his elitism as well as his discredited views on how to solve the crisis. In a recent statement, he actually stated with a straight face that the goal of the summit should be to preserve "free markets, free enterprise and free trade."
Yes, while his own Treasury secretary is busily nationalizing much of the U.S. banking sector, Bush is suggesting that the solution somehow remains the further deregulation of financial and trade markets.
The outgoing president appears unable to give up his belief in the "market fundamentalism" that has dominated the U.S. policy agenda for the past 30 years. With strong U.S. backing, institutions such as the World Bank, International Monetary Fund and the World Trade Organization have pushed governments to lift regulations on trade, finance and investment and sell off state enterprises throughout most of the developing world.
The results of this free-market theology have been devastating for poor people, farmers, workers and the environment, and made the world more vulnerable to financial volatility.
In the midst of the current crisis, the IMF has already approved new loans to crisis-ridden Hungary and Ukraine, and is deep in negotiations with Pakistan. All these loans contain some of the failed "free market" conditions.
This is outrageous, not only because of the double standard (the IMF doesn't suggest such policies for richer nations), but also because the agency knows better: Recently released IMF data show that countries like China and India that have kept some government controls on the financial sector and limited the extent to which their economies are tied to global markets are weathering the storm relatively well.
On the other hand, the IMF data shows that countries such as Mexico, which opened their market to U.S. and global markets, are hard hit.
So what's to be done? Hundreds of citizen groups across the globe -- none of them invited to Bush's party -- have released a statement that calls for a whole new global economic architecture, built upon fundamentally different foundations.
We are calling for rules that would reconnect finance to the long-term productive and green investments that make economies strong and healthy, and for democratic checks and balances aimed at preventing future financial crises. As some of the first steps, we propose regulation of derivatives and a transactions tax to curb speculation.
As long as U.S. officials continue to refuse to face the reality of a post-market fundamentalist world, they will further contribute to the crisis. The Bush administration should start working with President-elect Obama's advisors immediately to open up a genuine global dialogue aimed at closing down the financial casino and replacing it with rules and institutions that put people and the planet first.
20 Comments so far
Show AllAaaah, someone brings up the Chicago School of Economics(Friedman), to which Obama will shortly prove he is adherent and acolyte. Just watch Amurkans. Your faith in him will soon be shaken...as your income falls, what money you DO have will have no value. Where will your next meal come from?
You ever notice how it's always someone else's fault when the economy goes tits-up? It's never the consumer, the end user for all the worthless crap we buy, feeding the monster whose greed is never sated? This whole bloated, overfed, corpulent system will die of unnatural causes as we watch, no matter what we bailout. I only say this because I want others to prepare...simplify, store food, get out of debt, learn some new skills...If you come to my house in a crisis, what will you have to barter?
Well lets face it the meeting has more to do with getting enought people on side, to batter discent from other countries, than it does with changing stuff; that's to come- I am quite sure they already have a plan, which they do not want other countries to mess with.
This quote however:
"Bush is suggesting that the solution somehow remains the further deregulation of financial and trade markets."
Is just rediculas, it's the lack of regulation that caused half the problems we now face. What's getting rid of more going to do? That's people living in the past and denying the present day realities.
Lots of changes needed, but less regulation I don't believe to be one of them.
In these "interesting times" there's the opportunity to industrialize a green economy. It may be the last hope for survival of our species.
It could be that Bush - assuming he has a shred of conscience - would not feel well among all those leaders whose countries the US has plundered. This meeting should have been held in a neutral country and ALL heads of state of ALL nations should have been in attendance.
Working Our Way To Recovery
Labor is the key to recovery. Remember without labor, capital is nothing.
"Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if Labor had not first existed. Labor is superior to capital, and deserves much the higher consideration." The 16th President of the United States of America, Abraham Lincoln
Focus on labor to find the remedy
Amen buddy. I'm so sick and tired of companies laying off workers just to boost their temporary stocks. I had seen this meltdown coming a long time ago when they did these kind of things. It's as good as cutting off one's arteries.
As for labor unions, back in the late 19th century, it was never about money as it was about pride, unity, and even love. People actually liked what they were doing even though the money was hard to come by thanks to the robber barons having all the control. Before FDR came into office, the public was more united for labor unlike today where it's all about the money. It's a shame that today's labor leaders don't mind having their private parts being controlled by the corporate elites. In fact, some of these labor leaders are even going all out to out-CEO CEOs. I'd pay my labor dues if it actually meant something but right now, we need to restore the real meaning of labor unions without the money. Money shouldn't be our guard. Unity, pride, and even compassion are what's needed in this broken-hearted dog-eat-dog society.
" I'm so sick and tired of companies laying off workers just to boost their temporary stocks."
What's your best evidence that this is the primary reason for layoffs?
"back in the late 19th century, it was never about money as it was about pride, unity, and even love. People actually liked what they were doing even though the money was hard to come "
What is the basis for your belief in this?
Going to have to reindustralize for jobs, labor without jobs isn't worth much. And we have a huge surplus of labor now.
Good posts all, but WJM ought to be in a new Cabinet post as some sort of direct advisor to Obama. Sums up my sentiments almost exactly. I already knew that I felt that way but had not yet put it so well.
-30-
These people worked for a long time to build up a system that would screw us and enrich themselves, and they aren't going to let it go just because some miserable HUMANS want something else. They now own damn near everything, and it's going to take a really good reason for them to give that up.
The whole idiocy of the "free market" was settled in my mind when Reagan took away our money and gave it to the already rich. Now look where THEY are and where WE are. It annoys the hell out of me to have been proven right in this. And now W does everything he can to make one last dash for the cash, and take away everything our children, grandchildren, and great grandchildren would have inherited.
I say we take a lesson from the mythology of the great depression, and take those who have done the screwing of the country, and indeed the world, up to the highest towers and buildings we can find. Two choices: Jump or we push you. Then we start over with policies that have been shown to work. Funny how they all seem to come from FDR.
Put people back to work, fixing what the republicans have made a hobby of ignoring: roads, bridges, schools, hospitals, libraries, public buildings and parks. Put money into the future of the country, and take it out of the hands of those who live for nothing but profit. Reform our justice system to actually provide for JUSTICE, not profit, like we have now. Stop arresting tens of millions for things that are NOT crimes, and stop seeing jail as the be all and end all of every situation. Stop bankrupting the country for the profits of the very few. Dismantle the military/industrial complex that Eisenhower tried to warn us about, and stop spending more than every other country in the world combined. What have we gotten for that, anyway? Two wars against two backwards nations with no real militaries to speeak of, and we are tapped out. Yeah, THAT was money well spent, wasn't it?
Start thinking of the FUTURE, and don't worry about the rich. They already have enough to waste for eternity. I hope they choke on it, to be honest. The rest of us just deserve a fighting chance, for a freaking change.
But remember, these people worked long and hard to screw over this country, they won't give up without a fight. So let's give them one.
Conservatives are nothing if not obstinate.
You can take Dubya to water but you can't make him drink, unless you maybe add a little booze.
"Free enterprise" is a term first used in a presentation to the National Association of Manufacturers on September 17, 1942 by Lamott DuPont. His speech indicated that by the term he meant:
1. No cost of the Second World War should fall upon business.
2. There should be no government regulation of business.
3. There should be no labor union interference with any aspect of business.
It was, in short, the economic policies embraced by contemporary fascism in Europe disseminated under the rubric of "freedom" for US audiences.
In 1947 the Freedom Train brought the founding documents of the US to heartland America, along with dioramas dramatizing the various freedoms of our way of life, freedom of religion, freedom of speech, etc. and among them was "free enterprise," the new term coined by DuPont.
"Free markets, free enterprise, and free trade" sounds more acceptable than "free privilege," which is the actual substance of the ideas.
Very good. Thanks.
This illegitimate cabal is not "nationalizing much of the U.S. banking sector," they are privatizing the US Treasury.
"...calls for a whole new global economic architecture, built upon fundamentally different foundations."
Can anyone here help me understand this in some more depth. What are the new architectures, what are the old? Can someone post links. Thanks.
With the global economy facing severe recession, lame-duck President Bush is hosting the leaders of 19 other major countries in Washington this weekend to try to prepare a coordinated response.
Why did these 19 "leaders" agree to meet one of the most mind-boggling scamsters in all of history at the end of his monstrous reign? Why would they abet George Wanker Bush in his Fantasies of Greatness, thinking that by hosting this meeting he is going to pull a rabbit out of a hat, save the world economy and become immortal? This is the same warped bullshit and juvenile nonsense that led to the phony Middle East summit at Annapolis that Bush and Consolidated Rice-A-Roni were certain would solve the Israel-Palestine problem. Every leader in the world, except for Silvio Berlusconi and whatever far right fool is presently running Israel, should have declined the invitation and told Bush they couldn't attend because they need to spend more time with their families. Or perhaps they're coming to dine for free, three times a day, on German asparagus.
If the right can use the fall of the Soviet Union to "prove" that socialism is flawed, certainly the left should be able to use the current crisis to "prove" that right-wing policies are just as flawed.
Surviving bouts of critical sickness for decades, Capitalism and the 'market system' finally failed with the crash of 1929 and has been kept on life-support ever since. The life support really started in earnest during World War II when the government spent lots of money to fight a war. But after the war the planners had to figure out how to keep capitalism running. Since only capitalists were making decisions at the national level, guess what they suggested?
Among other things they adopted a Keynesian doctrine where in bad economic times the government is encouraged to spend money to stimulate the economic system. To get the taxes for this spending they had to scare the hell out of the homelanders. Which they did - and still try to do. Note how neatly we found other existential 'terrors' in the world after the old Soviet Union fell apart and couldn't be used to scare us anmyore.
Keynes suggested such ambitious goverment spending be used only in serious economic slumps. Our problem is that our government has used it continually since World War II in good economic times and bad and has overheated the economy. The major funnel for this govermental largesse? The Pentagon. Empire is not cheap - even wholesale.
Absolutely. Unfettered capitalism is just as flawed as socialism or Marxism is. The radical right has more than provided proof of that.
The current economic crisis may or may not have proven that Keynes was right but it has certainly demonstrated that Friedman was wrong.
It has also demonstrated that Roosevelt's financial-sector reforms worked.
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