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TechnoratiBailouts Dwarf Spending on Climate and Poverty Crises
There's also the global poverty crisis. Tens of millions of people across the developing world are expected to fall into extreme poverty and joblessness as a result of an economic mess originating in the United States. This is bad news for workers everywhere, as it means even more brutal competition in the globalized labor pool.
And then there's the climate crisis. If we don't do something about that one, we could find out what a real meltdown feels like.
Yet the richest nations in the world appear fixated almost entirely on the financial crisis, and specifically, on propping up their own financial firms.
A new report by our organization, the Institute for Policy Studies, finds that the approximately $4.1 trillion that the United States and European governments have committed to rescue financial firms is 40 times the money they're spending to fight climate and poverty crises in the developing world.
And as officials head to two upcoming global summits, there's strong reason for concern that rich country governments may backtrack even further on their aid and climate finance commitments.
On November 29, the Middle East nation of Qatar will host a Financing for Development conference, where governments will review aid obligations made six years ago. On December 1, international negotiators will convene in Poland to hammer out commitments to fighting climate change, including climate-related financial assistance for developing countries.
The financial crisis has overshadowed both of these major summits. When bank failures escalated in September, the United States and European governments moved with lightning speed to mobilize those $4.1 trillion in resources to aid struggling financial institutions.
For the United States, the total so far comes to about $1.3 trillion, including the $700 billion bailout bill as well as rescues for individual firms, deposit insurance for failed banks, and purchases of banks' short-term debts. In Europe, countries have pledged about $2.8 trillion for bank loan guarantees and cash injections.
More Than Development Aid
The combined $4.1 trillion is more than 45 times the sums the U.S. and Western European governments spent on development aid last year.
Some individual companies have enjoyed bailouts that dwarf the size of country aid packages. For example, the U.S. government's $152.5 billion rescue plan for AIG greatly exceeds the $90.7 billion U.S. and European governments spent on aid to all developing countries in 2007. And remember when AIG executives headed off to a luxury resort a few days after getting their taxpayer bailout? The tab for that junket — $440,000 — came to roughly the equivalent of U.S. food aid last year to Lebanon, a country struggling to recover from conflict.
The biggest company-specific bailout — the $200 billion for Fannie Mae and Freddie Mac — comes to nearly 1,000 times U.S. economic aid to Haiti, the Western Hemisphere's poorest country. The $29 billion for investment bank Bear Stearns was far more than the U.S. government's total aid bill of $23.2 billion.
Short-changing countries in such extreme need will only boomerang back to the United States in the form of greater global insecurity and reduced export markets.
Likewise when it comes to climate finance, the U.S. and European governments appear to be a penny wise but a pound foolish. Europe's new and additional funding commitments for a variety of climate-related efforts in developing countries over the next several years add up to only $13.1 billion, and very little of this has been disbursed.
The Swiss government has committed $60 billion to rescue the ailing bank UBS, which invested heavily in U.S. subprime mortgage debt. That's more than five times Europe's total commitments to climate finance for developing countries.
The U.S. Congress has not approved a single dollar of contributions to the developing world's climate change efforts. This is in part because the Bush Administration insisted that such financing be channeled through the World Bank, an institution with a poor environmental track record.
All three crises — financial, poverty, and climate — underscore the inter-connectedness of every nation on the globe. Thus, such extremely lopsided spending priorities, if continued, will only come back to haunt the United States and the rest of the global North in the long run. The richer countries not only have an obligation to clean up the messes they've made abroad. It's also in our own interest.
28 Comments so far
Show AllCome see the prosperity in Appalachia, Third World Toxic Waste Dump America...
http://www.wisecountyissues.com
Dear Sarah,
More reporting on this issue should be done from a different perspective.
1. The USA Patriot Act and other laws directly benefit law enforcement. They have taken over our country using warrant less surviellance and their stazi police spy network.
2. Follow the money.
"The indictment against Cheney alleges that his personal investment in the Vanguard Group, which invests in private prison companies, gives him culpability in alleged prisoner abuse."
Boy , every corner you turn Cheney is involved with torture and abuse, one has to wonder if he is sent the video tapes for home viewing pleasure.
How many corporations and elected officials like Dick Cheney have the inside track to help create laws that have circumvented the Constitution that protects us from government and law enforcement abuses.
In other words, the jails will fill faster because the constitution has been replaced by the Patritot Act, which allows law enforcement to conduct warrant less surviellance and warrant less property searchs.
Cha-Ching for Cheney and his Buddies.
Remind me please, who master minded the Patriot Act, approved billions of dollars for building huge nationwide security-law enforcement /spy network.
The community watch spy's do all the dirty work, and law enforcement swoops in makes the arrests.
When I say dirty work , I mean they conduct gang stalking surviellance tactics to cause suspects to react in a retaliatory nature.Noise campaigns, mobbing, tail gating.
Law enforcement will tap your phones and internet use, then pass information out to their spy groups which use the information to disrupt the victims life.
I wonder how many arrests have been made over the last 5 years that involve warrant less surviellance and warrant less property searches in the name of the Patriot Act.
Every time I post, I am made more of a target.Because their plan to ruin and discredit me has failed.
And all involved in my warrant less surveillance are now caught in this moral trap. They know what they have done to me was based on lies from a handful of powerful corrupt people that they are afraid to turn into authorities.
Thats the America that people like Cheney have molded. He sits on his throne , invested in private prison and War company's, using all of us as he makes money.
BornFreeMen
Surveillance and torture victim/survivor in Bradenton Fl ,,, 24/7 , two years and still running.
Thanks to Presidebt Bush and THE COAL INDUSTRY, Appalachia is a toxic waste dump, Third World America. http://www.wisecountyissues.com
"three crises — financial, poverty, and climate"
Once again an article that attempts a global analysis misses the elephant in the room underlying these crises; namely the population bomb, 6 billion and growing.
It is most troubling that the world at large refuses to see the simple answer that exists for all these problems.
The shorthand version goes like this;
All Sovereign Nations own the right to create debtfree interest free Social Capital.This Capital would not be inflationary because it would only be spent into circulation. Firstly to give every human being that needs it a minimum Social Wage, secondly to pay for the creation of all social infrastructures.
Once poor people have some money they will act to provide for themselves; also local economies are boosted as business, entrepreuers and farmers will have the best of all reasons to seek a share of this new money.
All of this can happen, it only requires Sovereign Nations to assume their inalienable right to create their own domestic version of currency, and to manage the creation of credit and the setting of interest rates.
As things stand we have been conned into believing we must borrow capital from those who profess to have plenty, like the IMF and World Bank, both of whom are controlled by the private interests of financial and Corporate power.
Examine the present conditions of World Economy; all the Bailout money is simply being printed, it is simply entries in the financial ledgers, cyphers on the computer screen. What they can do for the scheming criminal class responsible for this crisis, we can do for the poverty stricken deprived peoples of the World. Three US Presidents were assasinated because they wanted to use Social Capital for the "General Good",Look at your history, President Lincoln was the first, one later whose name escapes just now, and president John F Kennedy who signed it into US law by executive order some three months before his assasination. President Johnson quickly rescinded it. Our Politicians, and our elections, are bought and paid for by the Corporate and Financial Money power, for goodness sake wake up, the evidence is demonstrated to you at every election and every sitting of the House and Senate.You all must pull the Democrat Politicians into line and have them stop political donations from Corporates and think tanks etc, and finance elections solely from the tax payer source. Even I can plainly see that Barack Obama is the creation of these same criminals; so do not hope for any meaningful change to US policies.You do not have long to wait, write my statements on your wall and check it regularly.If you have read this far, thankyou and God Bless. THOMASTHEAUSSIEBATTLER
Why do we let politicians decide what to do with our money? Why can't we decide this direct democratically with referendums?:
http://ni4d.us/
Electing Obama was a form of referendum. He supported the bailout prior to the election, therefore when people gave Obama his mandate they knew they were also supporting the bailout. The answer to your question is basic civics, we live in a representative democracy. If you don't like your representative, vote for someone else.
Unless we bailout our economy, there will be ZERO money available to spend on the environment. The financial crisis isn't coming "the day after tomorrow", it's already here. But apparently some people would rather spend money saving the whales than saving working class Americans. I care about the environment too, but come on people, we need to get our priorities straight.
Joe Hope
We certainly need to fix our economy. But can you explain what the "bailout" has done so far? I can't see anything its done except enable banks to buy other banks. Credit is tightening if anything. Banks are raising their fees. Their cost of borrowing has gone down, but they have raised the cost of borrowing.
A majority of the American people opposed the bailout passed by the Bush-Democrat coalition. It's basically a $700 billion blank check to a President who has done an awful lot to earn our distrust. There are better ways to address the financial crisis than to subsidize Wall Street bonuses, such as making a much stronger effort to keep people from losing their homes. Lenders will have to take writedowns on mortgages, but that's a lot better than letting homeowners go bankrput.
They are paying the billionaires trillions of dollars to prop up an economy that won't stand. We simply do not make anything anymore. The ship will sink and we will then have to drag out the Guillotine. The wealthy destroy the environment along with all of us who go along with the nonsense, and they start stupid wars so they can amass more money, and still they want more. What to do with such criminals? Better a few wealthy criminals than the whole world drowning in poverty and global warming. Throw the rats in the sewer where they belong, and get on building this world as more equitable, more eco-conscious.
http://bloomberg.com/apps/news?pid=20601109&sid=arEE1iClqDrk&refer=home
I think the authors numbers suspect. This article points out that the amount of taxpayer dollars so far pledged to prop up the Banks is now over 7 TRILLION and climbing.
The entire US economy is built on a house of sand. It is all debt and more debt. Phony wealth which they were pointing to for the past 30 years as an example of how "Successful" Capitalism was. A Decades long lie.
YET, even with all that evidence of what a charafe it was, we still have political pundits attacking "Socialism" .
We have voters going to the polls claiming they do not want "Socialism" while their own system has all but collapsed.
Its akin to people remaining on the Titantic as it sinks because they think the ship that has pulled up to rescue them is not safe because it was built In Germany.
pk
The point most commentators on this seem to consistently miss is that we don't HAVE all these billions to spend on all this good stuff. The United States government is in deeper debt and thus in worse shape than the institutions it is purporting to rescue.
If the Chinese, among others, stop lending it money, there will be no funds for the FDIC to insure the bank accounts. If there was ever anything that's "too big to fail" (and too big to rescue) it's the United States government.
Sioux Rose
PARANOID: I've been thinking the same thing. I have a friend who thinks he's protected because most of his retirement $ is in bonds. I have a CD and ask myself if the PROMISE behind it of a government that is ITSELF effectively bankrupt means anything any more? I feel the same way about insurance. My car rates went up twice in the past 6 months, and in our area an outfit by the name of Progress energy decided to also increase rates so they can gather $ to build a nuclear power plant that I, for one, don't want. And while it would not be built till 2013 or so, I would NOT continue to live near if that became the case.
It seems to me the whole ponzi scheme IS OVER. Not only are current efforts equivalent to placing a finger in a dam, but there is NOT enough $ to deal with all the FAKE "products" like hedge fund derivatives that were sold AS IF they were a tangible product of worth. When it all comes apart, as now, when the big automakers, the banks, the insurance companies (AIG) start coming in for the big hand out, THAT IS WHEN it is clearly time for sane elected leaders, and citizens, to realize something NEW is required. This is NOT the time to pour wine into the old wineskins, and to the extent that tragic course of action is taken, just sets the way to far more financial misery generally for those who didn't devise these schemes in the first place. (Check out Truthout on this same subject, Dean Baker, and some interesting responses in their forum.)
Check out COMEX and the difference between real gold and gold certificates. Around the world GOLD in the form of coins is in short supply. The official price of gold is something over 720 USD per ounce but if you want to buy a gold coin you pay a premium of several hundred dollars.
Comex has been short selling. They have been selling certificates for gold they DO NOT HAVE. If the people holding these certificates try and convert it to real gold, all they will have is that piece of paper.
If this happens the US Governmnet will have to bail out Comex.
Comex has sold about 32 million ounces worth of Gold certificates while having only 8 million ounces of Gold.
Sioux Rose
GW NORTH: After reading Patrick Byrne's "Deep Capture" and other articles on the FULL nature of what the stock traders have done in the form of eviscerating the very meaning of WORTH, just about every known commodity (perhaps excluding love and compassion) has been eviscerated. I have very little faith that the FDIC CAN insure bank deposits (after all, it either prints fiat currency or borrows which in turn makes this nation's future citizens equivalent inmates in an invisible debtors' prison) and it's the same with the big insurers. It is an OBSCENITY to watch our representatives give to the same persons who brought on this crisis rewards that are in theory supposed to fix it. But they fix nothing, because THE fix is in!
The way to have dealt, as many in this forum recognized, was by changing the loans to easier payment plans to keep people IN their homes. Through that preservation of basic real estate values, communities and their tax bases would not be eviscerated, nor would the shops that rely on commerce be left with no customers because a high percentage of their community members were busy scurrying for the nearest homeless shelter, or perhaps devising ways to inhabit a Wallmart parking lot.
I feel like I am watching a 21st century rendition, on steroids, that has spread the Ebineezer Scrooge "disease" so thoroughly through the "house of banking" that sanity is the thing made conspicuous by its absence from the so-called therapeutic financial solution. This waste means less will be there to really SOLVE the problem, which comes down to a new paradigm. The "business" model that greed built is the house of cards tumbling... and for the elite who have their tentacles into our "representative government," there is a naked attempt to protect their own at EVERYONE ELSE'S expense. It is a recipe not only for failure but for fraud of the most senseless kind.
Protecting the pockets of the filthy rich few certainly trumps the survival of the poor masses.
Sioux Rose
HUMBABA: The "leaders" who chose a war of choice that eviscerated out economy, along with those (Graham) who surreptitiously made sure that the fire wall intelligently devised as the Steagall-Glass Act was disabled, now put their emphasis on saving money, the fallen idol, the grand delusion... rather than placing fiscal muscle behind efforts to save our green earth and re-fit infrastructure for the task. As Shapespeare put it, "How can thinking men/women think so wrongly." It's amazing that so many without ideals or understanding are positioned to shape and further the most ill-fated priorities and policies.
I like the Institute for Policy Studies' writers/scholars, but it seems like missing from this is comment on spending (or not spending) on poverty and city issues in the U.S. while focus is on the poor outside the U.S. What did I miss?
You have a valid point, but probably missed that this analysis might not have focused on U. S. domestic policy. Sometimes studies actually do look beyond American borders at the entire globe as a single entity, something more Americans should consider. This is also clearly a synopsis of the larger body of work, and the primary point made is that the U. S. has clearly misplaced priorities for its expenditures. You're looking for an assessment of American domestic policy in the wrong place.
sand flea: My thought was if we are looking at world poverty, we should include our own country's. It's not either or, for me. Otherwise, I like the article. Thanks for your comment. I appreciate your point of view.
I don't think the comment was due to misreading the article, but rather, the emphasis on the article was misplaced.
People right here are losing jobs, homes, health, sanity.
Shut down the War, close the hundreds of bases, limit aid to countries that clearly don't deserve it (Israel springs to mind because of their crimes against humanity vis a vis Palestine) and let the financial sector choke on its own bile.
The point: You want to save something, save the U.S. people first, and then see what's left for the rest.
thepuffin
"The point: You want to save something, save the U.S. people first, and then see what's left for the rest."
Actually I think you are right. I believe its about to come to that. Our economy is so much worse off than people think. When the real hits start coming, its going to hurt. We have far too much to address here to even consider others in the next few years.
Sioux Rose
PUFFIN: I'd add legalize pot and put a nominal tax on it, AND equally place a nominal tax on all stock transactions. Cut out financial loopholes in the wealthy, those who off-shore their wealth, and bring more fairness into tax policy in general. And as you said, close at least 50% of those bases, and rent back the facilities. If all else fails, sell the Bush family as slaves to the highest bidder (and holder of American securities).
Sioux Rose
Now you're talking! But we don't need to rent back the facilities from the bases that are closed. We could close 65-70% of them and it would save money and strengthen the military.
thepuffin:I was only thinking it should include our country's people in poverty, especially in re other articles about the poverty gap in the U.S. in an article lower down on CD. (From a couple of days ago.) I think we can work on poverty here and also, around the world, since our government's policies are, in part, responsible for making some of the poverty worse, both here and around the world. Closing bases would be such a great idea.
Right. As Siouxrose and you both point out, my list is incomplete. I believe in helping the humans wherever they are found, and in instituting the Death Penalty...for corporations. Corporations have demanded and won civil rights in an abomination of a Supreme Court opinion, yet they have perpetual life and exist only to grow and eliminate rivals.
The Corporate Death Penalty is not really a radical idea. Corporations originally only existed for a specific, limited purpose, i.e., to build the Brooklyn Bridge. When the bridge was built, the corporation automatically ceased to be. This is literally what happened. We still have the bridge, but the second it opened, the corporation that was created to construct it vanished into the same legal ether from which it appeared.
Ah, the good ol' days.
The corporation of today has mutated and become eternal, and exists for the specific and overriding purpose of increasing its size and power whilst eliminating all rivals. The mergers in the financial industry funded by the bailouts is just one particularly heinous example.
If we restore the idea that corporations are merely tools for us humans, and not some creature worthy of constitutional protection, we can simply eliminate those that do not serve the common good.
POOF!
If we can do that, legalizing pot and living on a clean planet that can feed all of her children will be a piece of cake.
But it might be the grappa talking.
Peace.
This isn't a bailout - it's a robbery. It's necessary because the empire is rapidly crumbling. The ship of state is sinking and so all the rich White males are lining up for their for their welfare checks.
Hoa binh