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Twitter Users Ridicule First Daughter With #UnwantedIvanka Hashtag After Ivanka Caught on Video 'Boxing Way Above Her Weight'
"Being someone's daughter actually isn't a career qualification."
Jul 01, 2019
Social media users inserted images of Ivanka Trump into pictures of historical events to show how nepotism doesn't always translate into acceptance after a viral video of the First Daughter and senior White House advisor awkwardly interrupting a group of world leaders at the G20 summit went viral over the weekend.
The video, which was posted to Instagram by the office of French President Emmanuel Macron, shows Ivanka jumping into a conversation between Macron, Canadian Prime Minister Justin Trudeau, British Prime Minister Theresa May, and International Monetary Fund managing director Christine Lagarde. Ivanka was at the conference with her father, President Donald Trump.
According to The New York Times:
In the clip, Ms. Trump seemed to be looking to find a place to jump into this diplomatic game of double Dutch. First Mrs. May spoke: "As soon as you charge them with that economic aspect of it, a lot of people start listening who otherwise wouldn't listen."
And then Ms. Trump jumped in: "And the same with the defense side of it, in terms of the whole business that's been, sort of, male-dominated."
Ms. Lagarde, who was standing next to the president's daughter, swiveled her head and blinked several times as she listened.
The video went viral over the weekend, with observers like Rep. Alexandria Ocasio-Cortez (D-N.Y.) pointing out that "being someone's daughter actually isn't a career qualification."
The hashtag #UnwantedIvanka was started by Crooked Media's Erin Gloria Ryan, who asked her followers on Twitter to "please photoshop Ivanka the unwelcome interloper boxing way above her weight" in historical pictures.
"And hashtag it #unwantedivanka because these are delightful and deserve to be seen," tweeted Ryan.
Twitter users jumped at the opportunity, placing Ivanka at Lyndon Johnson's swearing in after the assassination of President John F. Kennedy....
Lincoln's assassination...
And the Yalta conference.
Of course, as lawyer Darren Kaplan noted, "you don't need photoshop" to show Ivanka inserting herself where she's unwanted.
"Here's an actual photo of Ivanka posing with an Olympic medal that someone else trained and sacrificed their entire life to earn," said Kaplan.
Ivanka and her father returned to the U.S. on Sunday.
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Under Trump, America's Global Standing at Record Low
Two years later, Trump has failed to reverse America's decline
Jul 01, 2019
Make America Great Again? Don't count on it.
Donald Trump was partly voted into office by Americans who felt that the self-proclaimed greatest power on Earth was actually in decline -- and they weren't wrong. Trump is capable of tweeting many things, but none of those tweets will stop that process of decline, nor will a trade war with a rising China or fierce oil sanctions on Iran.
You could feel this recently, even in the case of the increasingly pressured Iranians. There, with a single pinprick, Supreme Leader Ayatollah Ali Khamenei effectively punctured President Trump's MAGA balloon and reminded many that, however powerful the U.S. still was, people in other countries were beginning to look at America differently at the end of the second decade of the twenty-first century.
Following a meeting in Tehran with visiting Japanese Prime Minister Shinzo Abe, who brought a message from Trump urging the start of U.S.-Iranian negotiations, Khamenei tweeted, "We have no doubt in [Abe's] goodwill and seriousness; but regarding what you mentioned from [the] U.S. president, I don't consider Trump as a person deserving to exchange messages with, and I have no answer for him, nor will I respond to him in the future." He then added: "We believe that our problems will not be solved by negotiating with the U.S., and no free nation would ever accept negotiations under pressure."
A flustered Trump was reduced to briefly tweeting: "I personally feel that it is too soon to even think about making a deal. They are not ready, and neither are we!" And soon after, the president halted at the last minute, in a distinctly humiliating retreat, U.S. air strikes on Iranian missile sites that would undoubtedly have created yet more insoluble problems for Washington across the Greater Middle East.
Keep in mind that, globally, before the ayatollah's put-down, the Trump administration had already had two abject foreign policy failures: the collapse of the president's Hanoi summit with North Korean leader Kim Jong-un (followed by that regime's provocative firing of several missiles over the Sea of Japan) and a bungled attempt to overthrow the regime of Venezuelan President Nicolas Maduro.
America's Global Standing at a Record Low
What's great or small can be defined in absolute or relative terms. America's "greatness" (or "exceptional" or "indispensable" nature) -- much lauded in Washington before the Trump era --should certainly be judged against the economic progress made by China in those same years and against Russia's advances in the latest high-tech weaponry. Another way of assessing the nature of that "greatness" and what to make of it would be through polls of how foreigners view the United States.
Take, for instance, a survey released by the Pew Research Group in February 2019. Forty-five percent of respondents in 26 nations with large populations felt that American power and influence posed "a major threat to our country," while 36% offered the same response on Russia, and 35% on China. To put that in perspective, in 2013, during the presidency of Barack Obama, only 25% of global respondents held such a negative view of the U.S., while reactions to China remained essentially the same. Or just consider the most powerful country in Europe, Germany. Between 2013 and 2018, Germans who considered American power and influence a greater threat than that of China or Russia leapt from 19% to 49%. (Figures for France were similar.)
As for President Trump, only 27% of global respondents had confidence in him to do the right thing in world affairs, while 70% feared he would not. In Mexico, you undoubtedly won't be surprised to learn, confidence in his leadership was at a derisory 6%. In 17 of the surveyed countries, people who lacked confidence in him were also significantly more likely to consider the U.S. the world's top threat, a phenomenon most pronounced among traditional Washington allies like Canada, Great Britain, and Australia.
China's Expanding Global Footprint
While 39% of Pew respondents in that poll still rated the U.S. as the globe's leading economic power, 34% opted for China. Meanwhile, China's Belt and Road Initiative (BRI) launched in 2013 to link the infrastructure and trade of much of Southeast Asia, Eurasia, and the Horn of Africa to China (at an estimated cost of four trillion dollars) and to be funded by diverse sources, is going from strength to strength.
One way to measure this: the number of dignitaries attending the biennial BRI Forum in Beijing. The first of those gatherings in May 2017 attracted 28 heads of state and representatives from 100 countries. The most recent, in late April, had 37 heads of state and representatives from nearly 150 countries and international organizations, including International Monetary Fund (IMF) chief Christine Lagarde and United Nations Secretary-General Antonio Guterres.
Leaders of nine out of 10 Association of Southeast Asian Nations attended, as did four of the five Central Asian republics. Strikingly, a third of the leaders participating came from Europe. According to Peter Frankopan, author of The New Silk Roads, more than 80 countries are now involved in some aspect of the BRI project. That translates into more than 63% of the world's population and 29% of its global economic output.
Still, Chinese President Xi Jinping is intent on expanding the BRI's global footprint further, a signal of China's dream of future greatness. During a February two-day state visit to Beijing by Saudi Crown Prince Mohammed bin Salman, Xi suggested that, when it came to Riyadh's overly ambitious economic plan, "our two countries should speed up the signing of an implementation plan on connecting the Belt and Road Initiative with the Saudi Vision 2030."
Flattered by this proposal, the crown prince defended China's use of "re-education" camps for Uighur Muslims in its western province of Xinjiang, claiming it was Beijing's "right" to carry out antiterrorism work to safeguard national security. Under the guise of combating extremism, the Chinese authorities have placed an estimated one million Uighur Muslims in such camps to undergo re-education designed to supplant their Islamic legacy with a Chinese version of socialism. Uighur groups had appealed to Prince bin Salman to take up their cause. No such luck: one more sign of the rise of China in the twenty-first century.
China Enters the High-Tech Race With America
In 2013, the German government launched an Industry 4.0 Plan meant to fuse cyber-physical systems, the Internet of things, cloud computing, and cognitive computing with the aim of increasing manufacturing productivity by up to 50%, while curtailing resources required by half. Two years later, emulating this project, Beijing published its own 10-year Made in China 2025 plan to update the country's manufacturing base by rapidly developing 10 high-tech industries, including electric cars and other new-energy vehicles, next-generation information technology and telecommunications, as well as advanced robotics and artificial intelligence, aerospace engineering, high-end rail infrastructure, and high-tech maritime engineering.
As with BRI, the government and media then publicized and promoted Made in China 2025 vigorously. This alarmed Washington and America's high-tech corporations. Over the years, American companies had complained about China's theft of U.S. intellectual property, the counterfeiting of famous brands, and the stealing of trade secrets, not to speak of the pressuring of American firms in joint ventures with local companies to share technology as a price for gaining access to China's vast market. Their grievances became more vocal when Donald Trump entered the White House determined to cut Washington's annual trade deficit of $380 billion with Beijing.
As president, Trump ordered his new trade representative, the Sinophobe Robert Lighthizer, to look into the matter. The resulting seven-month investigation pegged the loss U.S. companies experienced because of China's unfair trade practices at $50 billion a year. That was why, in March 2018, President Trump instructed Lighthizer to levy tariffs on at least $50 billion worth of Chinese imports.
That signaled the start of a Sino-American trade war which has only gained steam since. In this context, Chinese officials started downplaying the significance of Made in China 2025, describing it as nothing more than an inspirational plan. This March, China's National People's Congress even passed a foreign direct-investment law meant to address some of the grievances of U.S. companies. Its implementation mechanism was, however, weak. Trump promptly claimed that China had backtracked on its commitments to incorporate into Chinese law significant changes the two countries had negotiated and put into a draft agreement to end the trade war. He then slapped further tariffs on $200 billion in Chinese imports.
The major bone of contention for the Trump administration is a Chinese law specifying that, in a joint venture between a foreign corporation and a Chinese company, the former must pass on technological know-how to its Chinese partner. That's seen as theft by Washington. According to Senior Fellow at the Carnegie Endowment for International Peace Yukon Huang, author of Cracking the China Conundrum: Why Conventional Economic Wisdom Is Wrong, however, it's fully in accord with globally accepted guidelines. Such diffusion of technological know-how has played a significant role in driving growth globally, as the IMF's 2018 World Economic Outlook report made clear. It's worth noting as well that China now accounts for almost one-third of global annual economic growth.
The size of China's market is so vast and the rise in its per capita gross domestic product -- from $312 in 1980 to $9,769 in 2018 -- so steep that major U.S. corporations generallyaccepted its long-established joint-venture law and that should surprise no one. Last year, for instance, General Motors sold 3,645,044 vehicles in China and fewer than three million in the U.S. Little wonder then that, late last year, following GM plant closures across North America, part of a wide-ranging restructuring plan, the company's management paid no heed to a threat from President Trump to strip GM of any government subsidies. What angered the president, as he tweeted, caught the reality of the moment: nothing was "being closed in Mexico and China."
What Trump simply can't accept is this: after nearly two decades of supply-chain restructuring and global economic integration, China has become the key industrial supplier for the United States and Europe. His attempt to make America great again by restoring the economic status quo ante before 2001 -- the year China was admitted to the World Trade Organization -- is doomed to fail.
In reality, trade war or peace, China is now beginning to overtake the U.S. in science and technology. A study by Qingnan Xie of Nanjing University of Science and Technology and Richard Freeman of Harvard University noted that, between 2000 and 2016, China's global share of publications in the physical sciences, engineering, and mathmatics quadrupled and, in the process, exceeded that of the U.S. for the first time.
In the field of high technology, for example, China is now well ahead of the United States in mobile payment transactions. In the first 10 months of 2017, those totaled $12.8 trillion, the result of vast numbers of consumers discarding credit cards in favor of cashless systems. In stark contrast, according to eMarketer, America's mobile payment transactions in 2017 amounted to $49.3 billion. Last year, 583 million Chinese used mobile payment systems, with nearly 68% of China's Internet users turning to a mobile wallet for their offline payments.
Russia's Advanced Weaponry
In a similar fashion, in his untiring pitch for America's "beautiful" weaponry, President Trump has failed to grasp the impressive progress Russia has made in that field.
While presenting videos and animated glimpses of new intercontinental ballistic missiles, nuclear-powered cruise missiles, and underwater drones in a March 2018 television address, Russian President Vladimir Putin traced the development of his own country's new weapons to Washington's decision to pull out of the 1972 Anti-Ballistic Missile (ABM) treaty with the Soviet Union. In December 2001, encouraged by John Bolton, then under secretary of state for arms control and international security, President George W. Bush had indeed withdrawn from the 1972 ABM treaty on the spurious grounds that the 9/11 attacks had changed the nature of defense for America. His Russian counterpart of the time, the very same Vladimir Putin, described the withdrawal from that cornerstone of world security as a grievous mistake. The head of Russia's armed forces, General Anatoly Kvashnin, warned then that the pullout would alter the nature of the international strategic balance, freeing up countries to restart arms buildups, both conventional and nuclear.
As it happened, he couldn't have been more on the mark. The U.S. is now engaged in a 30-year, trillion-dollar-plus remake and update of its nuclear arsenal, while the Russians (whose present inventory of 6,500 nuclear weapons slightly exceeds America's) have gone down a similar route. In that televised address of his on the eve of the 2018 Russian presidential election, Putin's list of new nuclear weapons was headed by the Sarmat, a 30-ton intercontinental ballistic missile, reputedly far harder for an enemy to intercept in its most vulnerable phase just after launching. It also carries a larger number of nuclear warheads than its predecessor.
Another new weapon on his list was a nuclear-powered intercontinental underwater drone, Status-6, a submarine-launched autonomous vehicle with a range of 6,800 miles, capable of carrying a 100 megaton nuclear warhead. And then there was his country's new nuclear-powered cruise missile with a "practically unlimited" range. In addition, because of its stealth capabilities, it will be hard to detect in flight and its high maneuverability will, theoretically at least, enable it to bypass an enemy's defenses. Successfully tested in 2018, it does not yet have a name. Unsurprisingly, Putin won the presidency with 77% of the vote, a 13% rise from the previous poll, on record voter turnout of 67.7%.
In conventional weaponry, Russia's S-400 missile system remains unrivalled. According to the Washington-based Arms Control Association, "The S-400 system is an advanced, mobile, surface-to-air defense system of radars and missiles of different ranges, capable of destroying a variety of targets such as attack aircraft, bombs, and tactical ballistic missiles. Each battery normally consists of eight launchers, 112 missiles, and command and support vehicles." The S-400 missile has a range of 400 kilometers (250 miles), and its integrated system is believed to be capable of shooting down up to 80 targets simultaneously.
Consider it a sign of the times, but in defiance of pressure from the Trump administration not to buyRussian weaponry, President Recep Tayyip Erdogan of Turkey, the only Muslim member of NATO, ordered the purchase of batteries of those very S-400 missiles. Turkish soldiers are currently being trained on that weapons systems in Russia. The first battery is expected to arrive in Turkey next month.
Similarly, in April 2015, Russia signed a contract to supply S-400 missiles to China. The first delivery of the system took place in January 2018 and China test fired it in August.
An Expanding Beijing-Moscow Alliance
Consider that as another step in Russian-Chinese military coordination meant to challenge Washington's claim to be the planet's sole superpower. Similarly, last September, 3,500 Chinese troops participated in Russia's largest-ever military exercises involving 300,000 soldiers, 36,000 military vehicles, 80 ships, and 1,000 aircraft, helicopters, and drones. Codenamed Vostok-2018, it took place across a vast region that included the Bering Sea, the Sea of Okhotsk, and the Sea of Japan. Little wonder that NATO officials described Vostok-2018 as a demonstration of a growing Russian focus on future large-scale conflict: "It fits into a pattern we have seen over some time -- a more assertive Russia, significantly increasing its defense budget and its military presence." Putin attended the exercises after hosting an economic forum in Vladivostok where Chinese President Xi was his guest. "We have trustworthy ties in political, security and defense spheres," he declared, while Xi praised the two countries' friendship, which, he claimed, was "getting stronger all the time."
Thanks to climate change, Russia and China are now also working in tandem in the fast-melting Arctic. Last year Russia, which controls more than half the Arctic coastline, sent its first ship through the Northern Sea Route without an icebreaker in winter. Putin hailed that moment as a "big event in the opening up of the Arctic."
Beijing's Arctic policy, first laid out in January 2018, described China as a "near-Arctic" state and visualized the future shipping routes there as part of a potential new "Polar Silk Road" that would both be useful for resource exploitation and for enhancing Chinese security. Shipping goods to and from Europe by such a passage would shorten the distance to China by 30% compared to present sea routes through the Malacca Straits and the Suez Canal, saving hundreds of thousands of dollars per voyage.
According to the U.S. Geological Survey, the Arctic holds petroleum reserves equal to 412 billion barrels of oil, or about 22% of the world's undiscovered hydrocarbons. It also has deposits of rare earth metals. China's second Arctic vessel, Xuelong 2 (Snow Dragon 2), is scheduled to make its maiden voyage later this year. Russia needs Chinese investment to extract the natural resources under its permafrost. In fact, China is already the biggest foreign investor in Russia's liquefied natural gas (LNG) projects in the region -- and the first LNG shipment was dispatched to China's eastern province last summer via the Northern Sea Route. Its giant oil corporation is now beginning to drill for gas in Russian waters alongside the Russian company Gazprom.
Washington is rattled. In April, in its latest annual report to Congress on China's military power, the Pentagon for the first time included a section on the Arctic, warning of the risks of a growing Chinese presence in the region, including that country's possible deployment of nuclear submarines there in the future. In May, Secretary of State Mike Pompeo used a meeting of foreign ministers in Rovaniemi, Finland, to assail China for its "aggressive behavior" in the Arctic.
In an earlier speech, Pompeo noted that, from 2012 to 2017, China invested nearly $90 billion in the Arctic region. "We're concerned about Russia's claim over the international waters of the Northern Sea Route, including its newly announced plans to connect it with China's Maritime Silk Road," he said. He then pointed out that, along that route, "Moscow already illegally demands other nations request permission to pass, requires Russian maritime pilots to be aboard foreign ships, and threatens to use military force to sink any that fail to comply with their demands."
An American Downturn Continues
Altogether, the tightening military and economic ties between Russia and China have put America on the defensive, contrary to Donald Trump's MAGA promise to American voters in the 2016 campaign. It's true that, despite fraying diplomatic and economic ties between Washington and Moscow, Trump's personal relations with Putin remain cordial. (The two periodically exchange friendly phone calls.) But among Russians more generally, a favorable view of the U.S. fell from 41% in 2017 to 26% in 2018, according to a Pew Research survey.
There's nothing new about great powers, even the one that proclaimed itself the greatest in history, declining after having risen high. In our acrimonious times, that's a reality well worth noting. While launching his bid for reelection recently, Trump proposed a bombastic new slogan: "Keep America Great" (or KAG), as if he had indeed raised America's stature while in office. He would have been far more on target, however, had he suggested the slogan "Depress America More" (or DAM) to reflect the reality of an unpopular president who faces rising great power rivals abroad.
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Why Even Investment Funds Want More Corporate Tax Transparency
Multinational corporations must stop blocking further transparency so that governments can develop tax policies that address inequalities, as well as the populism and authoritarianism that flow from them
Apr 09, 2019
Who would dream of putting an end to the culture of secrecy, the opacity of multinational companies' accounts and the fortunes hidden in tax havens? The usual suspects, of course, tax justice activists - academics, churches, trade unions - angered by revelations such as the Panama Papers or Paradise papers. But not only: a recent report published by the Global Reporting Initiative (GRI) reveals that the most vocal advocates for tax transparency are... investment fund representatives. And we are not talking about small players: those in favour of voluntary corporate tax transparency reporting standards manage the equivalent of USD $10 trillion, about 12% of global annual GDP!
Investment fund managers know that the lack of tax transparency from multinationals often disguises underlying business failures. While it might help deliver executive bonuses, it exposes investors to unforeseen risks and may hide profits that should be returned as dividends. "Complex or opaque ownership and organisational structures hamper transparency and may compromise investors' fundamental financial analysis", said Norges Bank, one of the heavyweights in the sector, in a letter to the GRI.
Tax avoidance strategies, whether legal or not, have a high social and human cost that affects companies.
They also know that tax avoidance strategies, whether legal or not, have a high social and human cost that affects companies. Falling tax revenues mean less money for education, health, infrastructure, poverty reduction and climate change. And direct investment depends heavily on quality public infrastructure and a healthy and skilled workforce.
Since the 1980s, a powerful industry has developed out of sight in tax havens, where, according to the Tax Justice Network, USD $30 Trillion are currently hidden. That is more than double the GDP of the entire Eurozone economy, or over 150 times the annual amount estimated by economist Jeffrey Sachs required to end extreme poverty globally.
Deprived of funds crucial to their development, the countries in the global south are the biggest losers. But in terms of amounts, the most affected are the United States and European countries, where most of the multinational companies' workforce and consumers are located. The EU, for example, loses about 20% of its corporate tax revenue to tax havens, the equivalent, according to economist Gabriel Zucman ofhalf of public spending on higher education.
Last month, the International Monetary Fund (IMF) President, Christine Lagarde, said in a widely reported op-ed that "the ease with which multinationals seem able to avoid tax and the three-decade-long decline in corporate tax rates compromise faith in the fairness of the international system." In other words, it is toxic for democracy.
The funding gap created by tax dodgers must be paid for with higher contributions from the middle and working classes, making it much more difficult for these groups to save or accumulate wealth.
This is because the funding gap created by tax dodgers must be paid for with higher contributions from the middle and working classes, making it much more difficult for these groups to save or accumulate wealth. The richest one per cent now have more wealth than the rest of the world combined, as recently shown by Oxfam.
Facing public anger, the G20 and the Organization for Economic Cooperation and Development (OECD) have pushed for increased sharing between tax authorities, including country-by-country reporting on the profits and tax payments of the largest multinationals. Unfortunately, this norm will only apply to very large multinationals and their reports will not be publicly available, depriving all of us of a key resource in the fight for tax justice.
We are not told how much money is stashed away in tax havens, how much our governments know about it or what they are doing to fight against it, if anything. Worst of all, these exchanges rely on financial institutions, which are precisely the ones that help their clients hide their money.
As Lagarde argues, the rules of the global tax system need to be rewritten. But a democratic debate is impossible when key information is withheld from the public.
Yet corporations continue to resist even voluntary standards. Their main arguments are that the public might be confused by the information and that producing it would be a burden. Are we expected to believe that massive multinationals cannot produce tax reports containing information that any prudent corporation should already be collecting?
Multinational corporations must stop blocking further transparency so that governments can develop tax policies that address inequalities, as well as the populism and authoritarianism that flow from them. It is also an imperative for growth, since political instability deters companies from investing. Transparency is today our only chance to restore confidence in our democratic institutions, and even, quite simply, to preserve them.
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Why Argentina's New Loans From the IMF Are Spurring Unrest and a Deepening Social and Economic Crisis
The IMF has a long history of strong-arming the direction of Argentina’s policies and economy.
Dec 21, 2018
In September, Argentine president Mauricio Macri accepted the 2018 Atlantic Council's Global Citizen Award. In attendance were many of world's neoliberal power players and policy makers, among them International Monetary Fund (IMF) Managing Director Christine Lagarde.
Facing the crowd, Macri gleefully admitted that "with Christine, I have to confess we started a great relationship some months ago," referring to a series of loan agreements with the IMF amounting to $57.1 billion dollars. "I expect that this is going to work very well, and we will end up with the whole country crushing on Christine," he continued. This dynamic of chasing an improved image with the world's big banks and the dominant economies in the West is emblematic of Macri's priority to secure a relationship with the IMF and improve the country's image with global financial institutions. But it comes at a devastating cost for the majority of the population who will suffer from neoliberal policy prescriptions of structural adjustment and slashed social spending, as well as the resulting growing unemployment and poverty.
Meanwhile, Argentina's debt to the IMF continues to climb. In June, Macri and the IMF agreed on a $50 billion loan. In September, the amount increased to an unprecedented $57.1 billion over three years. During an announcement from the presidential office in August regarding recent agreements with the IMF, Macri told the people of Argentina that this "decision will put an end to any uncertainty that has come about regarding our image on an international level." In other words, seeking the approval of the world's international banks and global power players (the U.S. included) is worth the conditions of austerity, the havoc wreaked on the lives of Argentina's poor, working and middle classes, and the limitations that it will put on future generations of Argentina's leadership (a limitation that we have seen most recently in Mexico as President Lopez Obrador pushes back against decades of neoliberal policies and conditions agreed to by his predecessors).
In order to afford the repayment plan, the 2019 budget eviscerates social spending, slashing it by 35 percent while increasing debt payments by 50 percent. Christine Lagarde recently defended the evisceration of social welfare, citing a current program in its place that allocates $6 per person among the 13 million poor in Argentina for the last six months of 2018. This is hardly enough for the country's 3,965,840 unemployed (8.9 percent of the population) and 12,167,610 residents living below the poverty line (27.3 percent of the population), based on numbers that have steadily increased since 2016 according to the IMF's own measure and the National Institute of Statistics of the Republic of Argentina's latest report.
Argentina's Long Relationship With the IMF, From 1976 to Today
The IMF has a long history of strong-arming the direction of Argentina's policies and economy, beginning with the military junta in 1976 that tortured, killed, and disappeared 30,000 people in the span of six years. The junta largely targeted the left and the country's poor and working class as they implemented a series of neoliberal policies, a tactic that journalist Naomi Klein discusses in depth in her book, The Shock Doctrine. Despite the human toll of Argentina's genocide, the IMF was willing to look the other way as long as the junta followed their policy prescriptions. As Paul Cooney explained:
"just one week after the military coup of March 1976, and without having to negotiate or send a delegation, the Argentinian junta was able to obtain over US $100 million from the IMF. In addition to this show of support for a government willing to implement and impose neoliberal policies with an iron hand, the IMF came through with the largest loan ever to a Latin American country (US $260 million), just five months later."
Meanwhile, Isabel Peron, the country's president from 1974 to 1976 until she was ousted by the military coup, was unable to secure funds from the IMF. Her agenda, it would seem, was not to their liking. This is what Tricontinental: Institute for Social Research Director Vijay Prashad calls an investment strike; the idea that credit is only available to countries who follow neoliberal policies. Governments that stray--or are perceived to stray--from this agenda are deprived from access to credit by the world's financial institutions. In other words, the banks and credit lenders go on a strike of sorts, withholding funds and access to credit until their neoliberal policy prescriptions are met. But, unlike labor strikes--where the demands are centered around conditions to improve the lives of the majority--investors, through their strikes, "insist on cuts to national budgets paid for by taxes on workers and peasants and lower living standards for workers and peasants." They use their leverage-- capital--to increase their own wealth at the expense of the people who produce it--the majority of the world's population.
When countries faithfully go along with these conditions and implement neoliberal policies, debt is allowed to disappear from the records, and credit is extended (such as when US $10 billion disappeared from the records out of a total of US $40 billion during negotiations between the IMF and military junta, or when the IMF loans to Argentina were extended from $50 billion to $57.1 billion in September 2018 under Macri). Should the policy direction change to show any inclination of a people-driven agenda, however, access to credit quickly disappears and a variety of tactics are used to destabilize "uncooperative" administrations--whether through the "unconventional wars" that we have seen recently in Venezuela and Brazil, or in Salvador Allende's Chile, or through military intervention.
The IMF continued to 'guide' the country's policies after the dictatorship under Carlos Menem (1989-1999). It was Menem's neoliberal policies that led the country into the straits of the Great Depression of 1998 to 2002 when the country set a record for the largest debt default in history up to that point. In 2001, unemployment neared 20 percent and, by 2002, 53 percent of the country was living below the poverty line.It wasn't until the Kirchner administrations from 2003 to 2015 that Argentina began to pull back from the grip of the IMF (Nestor Kirchner, 2003-2007, and Cristina Fernandez de Kirchner, 2007-2015). In these 13 years, as Mark Weisbrot of CEPR explained in a recent interview, the poverty rate was reduced by 70 percent, extreme poverty by 80 percent, and unemployment fell from 17 percent to 6.5 percent. In contrast, in the three years since the beginning of Macri's term, unemployment has increased to 8.5 percent. In Weisbrot's view, the Kirchners "did very well after the terrible experience with the IMF, which was one of their worst depressions from 1998 to the beginning of 2002. That's why they were popular, and that's why Cristina was re-elected. If she could have run again, she would still be there." The sharp turn of Macri's administration is all the more painful with the recent memory of the country's struggles with the IMF and a glimmer of what life could be like if the country were to free itself of the shackles of neoliberalism.
De-Linking From the IMF Agenda
It is possible, however, to imagine an alternative to the dismal reality created by neoliberal policies and the noose created by the investment strikes of the world's banking institutions. The late Egyptian Marxist Samir Amin provided us with a framework for building an international agenda that prioritizes the needs of the world's poor and dispossessed, an alternative to today's globalization that is dictated by the interests of global capital. In his interview with Tricontinental: Institute for Social Research, Amin reflects on the era of the Non-Aligned Movement (NAM) and multi-polar globalization. This era, Amin said, was "a time when imperialism was compelled to make concessions and to accept the national-popular programmes of India and other African and Asian countries. Instead of the countries of the south adjusting to the needs and demands of globalisation, it was the imperialist countries which were compelled to adjust to our demands."
By 2030, Amin continues, 85 percent of the population will be living in the Global South. The interests of the majority of this group are neglected by neoliberal policies that slash social spending and place social wealth in private hands. This 85 percent, Amin said, "can successfully de-link to various degrees in accordance not only with our size but also in accordance with our alternative political block, which would replace the core imperialist blocks which are controlling our countries today." The result of building such an alternative could indicate the ability of the world's poor to "compel imperialism to accept [their] conditions or part of those conditions," or to de-link.
Argentina's poor and dispossessed are already challenging Macri's agenda and pushing back against the constraints of global capital, having organized four general strikes since his term began in 2015. The country has been mired in protests similar to the cacerolazos that halted the streets of Buenos Aires during the 1998-2002 depression. As Tricontinental: Institute for Social Research's recent dossier points out, groups such as the Federation of Workers of the Popular Economy (CTEP)are creating cooperatives among the country's growing sector of informal workers, providing "an illustration of how the working class has been fragmented and reorganised by neo-liberal policies."
These efforts are not limited to Argentina. In the Indian state of Kerala, the Left Democratic Front governmentled one of the most successful rescue and reconstruction efforts in the country's history after the most devastating floods seen in 94 years, despite an attempt from the country's right-wing to not only neglect but actively stifle aid to the communist-led state. In South Africa, shack dwellers of the Abahlali baseMjondolo movement are occupying lands and building homes, refusing to leave their dignity up to the whims of the State and the country's elite. Across the world, people, and people's movements, are fighting back and creating alternatives to neoliberal policies. As long as this happens, global capital will use any means that it has--whether through economic policy and coercion or through military force--to protect its interests. But, as Amin suggests, if the 85 percent of the world's poor, from Argentina's informal workers to South Africa's shack dwellers, de-link from a neoliberal agenda and link with each other, they may very well be able to compel the current world order to accept their conditions and begin to create a future free from the shackles of global capital.
This article was produced by Globetrotter, a project of the Independent Media Institute.
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Ivanka Trump Is Booed, Hissed in Germany for Defending Donald Trump
German audience also appeared confused by prominent role president's daughter is playing in the administration
Apr 25, 2017
Ivanka Trump received a chilly reception in Berlin, Germany, on Tuesday after she claimed President Donald Trump was an advocate for women and families during a roundtable discussion on women's rights, held as part of the G20 summit.
Ivanka Trump described Donald Trump as "a tremendous champion of supporting families and enabling them to thrive."
The crowd of mostly women hissed and booed in response to Ivanka Trump's defense of her father.
"You hear the reaction from the audience," the moderator of the discussion, WirtschaftsWoche editor-in-chief Miriam Meckel, said. "I need to address one more point--some attitudes toward women your father has displayed might leave one questioning whether he's such an empower-er for women."
"I've certainly heard the criticism from the media, that's been perpetuated," Ivanka Trump responded, and the crowd laughed.
Watch the exchange here:
Earlier in the evening, the German crowd appeared mostly curious about Ivanka Trump's White House role. Indeed, German media covered the nebulousness of her role as advisor to the president--and the conflicts of interest therein--extensively ahead of Ivanka Trump's visit to Germany.
"Why is Ivanka here instead of Melania?" one headline read.
The moderator asked: "You're the first daughter of the United States, and you're also an assistant to the president. The German audience is not that familiar with the concept of a first daughter. I'd like to ask you, what is your role, and who are you representing, your father as president of the United States, the American people, or your business?"
The crowd laughed.
"Certainly not the latter. I'm rather unfamiliar with this role as well," Ivanka Trump answered. "It has been a little under 100 days and it has just been a remarkable and incredible journey."
The "first daughter" didn't clarify the role any further.
Germans criticized Chancellor Angela Merkel for inviting Ivanka Trump to the roundtable discussion, which also included Christine Lagarde of the International Monetary Fund, Canadian Minister of Foreign Affairs Chrystia Freeland, and Queen Maxima of the Netherlands.
In one bluntly-worded op-ed for n-tv, editor Sabine Oelmann condemned the prominent role Ivanka Trump plays in Donald Trump's White House:
It's bad enough that Donald Trump's son-in-law, Ivanka's husband, Jared Kushner is one of the closest colleagues and advisors of the American president. But now there's also Ivanka: She has an office near daddy's Oval Office, she has an official position that was never advertised or available before, she has a security clearance, she costs an unbelievable amount of money--and once again, how exactly is she qualified to work in the White House? Because she wrote a self-help book? Because she founded a company? No, it's more likely because she's daddy's girl--and that is almost worse than being born into a royal family. That is pure nepotism.
Germans also poked fun at Ivanka Trump's visit on Twitter. "Oh, Ivanka's in Berlin," wrote one Berlin resident. "So that's why I've been feeling like a dementor is nearby."
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IMF Chief Convicted, But Spared Jail Time, for Corruption
"This should help calm all that they're-only-in-it-for-themselves, anti-establishment feeling out there," quipped Globe and Mail senior international correspondent Mark MacKinnon
Dec 19, 2016
Christine Lagarde, head of the International Monetary Fund (IMF), on Monday was found guilty of "negligence" for approving a massive government payout to business tycoon Bernard Tapie during her tenure as French finance minister.
"This should help calm all that they're-only-in-it-for-themselves, anti-establishment feeling out there," quipped Globe and Mail senior international correspondent Mark MacKinnon in response to the latest charge of government corruption.
Though Judge Martine Ract Madoux did not hand down a sentence for the managing director, the court said Largarde "should have done more" to prevent the EUR405m ($422m) payout, Bloomberg reports.
Tapie, a close associate and financial backer of former French president Nicolas Sarkozy, was awarded the payout in in 2008.
AFP explains:
An arbitration panel ordered the payout to Tapie in connection with his sale of sportswear company Adidas. The panel upheld Tapie's claim that the Credit Lyonnais bank had defrauded him by intentionally undervaluing Adidas at the time of the sale and that the state--as the bank's principal shareholder--should compensate him.
It was Lagarde who, in her role as French finance minister, ordered the case to be heard by an arbitration panel instead of proceeding through the regular courts.
Critics say that Lagarde ensured Tapie received preferential treatment by referring the matter to arbitration as a quid pro quo for his financial support for Sarkozy during his 2007 presidential bid.
Lagarde, who is traveling to Washington, D.C., was not present at Monday's hearing in Paris, though she will likely appeal the decision. Reuters notes that the ruling could potentially trigger "a new leadership crisis at the International Monetary Fund after Lagarde's predecessor Dominique Strauss Khan resigned in 2011 over a sex assault scandal."
What's more, the trial and surprise conviction will likely "reviv[e] concerns in France about high-level corruption," the New York Times notes, "shining a spotlight on intimate ties between politicians and businesspeople, and on the large sums that are sometimes used to grease the country's political wheels."
As many noted, Lagarde's conviction capped off a year of intense political upheaval and establishment backlash across the globe.
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The Great Malaise Continues
NEW YORK - The year 2015 was a hard one all around. Brazil fell into recession. China's economy experienced its first serious bumps after almost four decades of breakneck growth. The eurozone managed to avoid a meltdown over Greece, but its near-stagnation has continued, contributing to what surely will be viewed as a lost decade. For the United States, 2015 was supposed to be the year that finally closed the book on the Great Recession that began back in 2008; instead, the US recovery has been middling.
Jan 03, 2016
NEW YORK - The year 2015 was a hard one all around. Brazil fell into recession. China's economy experienced its first serious bumps after almost four decades of breakneck growth. The eurozone managed to avoid a meltdown over Greece, but its near-stagnation has continued, contributing to what surely will be viewed as a lost decade. For the United States, 2015 was supposed to be the year that finally closed the book on the Great Recession that began back in 2008; instead, the US recovery has been middling.
Indeed, Christine Lagarde, Managing Director of the International Monetary Fund, has declared the current state of the global economy the New Mediocre. Others, harking back to the profound pessimism after the end of World War II, fear that the global economy could slip into depression, or at least into prolonged stagnation.
In early 2010, I warned in my book Freefall, which describes the events leading up to the Great Recession, that without the appropriate responses, the world risked sliding into what I called a Great Malaise. Unfortunately, I was right: We didn't do what was needed, and we have ended up precisely where I feared we would.
The economics of this inertia is easy to understand, and there are readily available remedies. The world faces a deficiency of aggregate demand, brought on by a combination of growing inequality and a mindless wave of fiscal austerity. Those at the top spend far less than those at the bottom, so that as money moves up, demand goes down. And countries like Germany that consistently maintain external surpluses are contributing significantly to the key problem of insufficient global demand.
At the same time, the US suffers from a milder form of the fiscal austerity prevailing in Europe. Indeed, some 500,000 fewer people are employed by the public sector in the US than before the crisis. With normal expansion in government employment since 2008, there would have been two million more.
Moreover, much of the world is confronting - with difficulty - the need for structural transformation: from manufacturing to services in Europe and America, and from export-led growth to a domestic-demand-driven economy in China. Likewise, most natural-resource-based economies in Africa and Latin America failed to take advantage of the commodity price boom underpinned by China's rise to create a diversified economy; now they face the consequences of depressed prices for their main exports. Markets never have been able to make such structural transformations easily on their own.
There are huge unmet global needs that could spur growth. Infrastructure alone could absorb trillions of dollars in investment, not only true in the developing world, but also in the US, which has underinvested in its core infrastructure for decades. Furthermore, the entire world needs to retrofit itself to face the reality of global warming.
While our banks are back to a reasonable state of health, they have demonstrated that they are not fit to fulfill their purpose. They excel in exploitation and market manipulation; but they have failed in their essential function of intermediation. Between long-term savers (for example, sovereign wealth funds and those saving for retirement) and long-term investment in infrastructure stands our short-sighted and dysfunctional financial sector.
Former US Federal Reserve Board Chairman Ben Bernanke once said that the world is suffering from a "savings glut." That might have been the case had the best use of the world's savings been investing in shoddy homes in the Nevada desert. But in the real world, there is a shortage of funds; even projects with high social returns often can't get financing.
The only cure for the world's malaise is an increase in aggregate demand. Far-reaching redistribution of income would help, as would deep reform of our financial system - not just to prevent it from imposing harm on the rest of us, but also to get banks and other financial institutions to do what they are supposed to do: match long-term savings to long-term investment needs.
But some of the world's most important problems will require government investment. Such outlays are needed in infrastructure, education, technology, the environment, and facilitating the structural transformations that are needed in every corner of the earth.
The obstacles the global economy faces are not rooted in economics, but in politics and ideology. The private sector created the inequality and environmental degradation with which we must now reckon. Markets won't be able to solve these and other critical problems that they have created, or restore prosperity, on their own. Active government policies are needed.
That means overcoming deficit fetishism. It makes sense for countries like the US and Germany that can borrow at negative real long-term interest rates to borrow to make the investments that are needed. Likewise, in most other countries, rates of return on public investment far exceed the cost of funds. For those countries whose borrowing is constrained, there is a way out, based on the long-established principle of the balanced-budget multiplier: An increase in government spending matched by increased taxes stimulates the economy. Unfortunately, many countries, including France, are engaged in balanced-budget contractions.
Optimists say 2016 will be better than 2015. That may turn out to be true, but only imperceptibly so. Unless we address the problem of insufficient global aggregate demand, the Great Malaise will continue.
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Clearing EU Hurdles, Greek Austerity Package Moves Forward
Germany approves bailout talks, EU approves bridging loan, and wildfires rage in Athens
Jul 17, 2015
The German Parliament on Friday voted yes on entering a new round of negotiations for a Greek bailout, and the European Union formally approved a bridging loan--two steps that move the controversial EUR86 billion rescue package for debt-ridden Greece forward past a significant hurdle.
Parliament, or Bundestang, voted 439-119, with 40 lawmakers abstaining, in favor of beginning talks on a third bailout which, as Common Dreams reported on Thursday, "comes at a high political and social cost" through severe austerity measures--but which Greek Prime Minister Alexis Tsipras said he was "forced to accept."
The BBC reports:
Prior to the vote, Chancellor Angela Merkel warned of "predictable chaos" if the Bundestag did not back the plan.
The Greek parliament has already voted in favour of the hard-hitting austerity measures required by the eurozone for a third bailout deal.
Among those measures are tax hikes, pension cuts, and privatization of public property. The measures are harsher than those rejected just this month by more than 60 percent of Greek voters in an emergency referendum on July 5. Former finance minister Yanis Varoufakis called them Greece's "terms of surrender."
The Greek Parliament approved the deal on Thursday despite pushbacks from Syriza lawmakers and mass protests throughout the country--which grew dramatic overnight with a police crackdown as some unexpected wildfires in Peloponnese, Athens and Evia.
With tempers running high in the streets on Friday, members of German Parliament cast their ballots on Greece's financial future following a tenacious--if rambling--speech by finance minister Wolfgang Schauble. Both he and Merkel said the deal was a "last attempt" to help Greece, which has taken two previous bailouts in the past five years.
Schauble has been one of the most vocal opponents of providing debt relief to Greece.
But according to Christine Lagarde, chief of the International Monetary Fund (IMF), one of the creditors setting the terms for Greece's poorly-received bailout package, the country must be given "significant debt relief to make its borrowings sustainable."
A bridging loan was also approved on Friday, which grants EUR7 billion to Greek banks from a European Union-wide fund. That loan, which is scheduled to arrive Monday, will help Greece relieve some of its most pressing debts, including a EUR3.5bn due to the European Central Bank (ECB) and EUR1.5bn to the IMF. The IMF has said it will not participate in any new bailout for Greece without that debt being paid.
Germany is not the only country voting on the bailout on Friday. Austria approved it earlier in the day, and next in line are Latvia and Estonia. The Guardian is providing live updates here.
According to Reuters:
The chairman of euro zone finance ministers Jeroen Dijsselbloem expects negotiations on the third bailout for Greece to take four weeks.
EU officials hope the bailout deal will be in place by mid-August when Greece needs to make further payments to the ECB to redeem its maturing debt, because the bridge financing organised so far is only 7.16 billion euros -- enough to see Athens through July, but not through August. ($1 = 0.9218 euros)
Follow the action on Twitter:
Tweets from https://twitter.com/commondreams/lists/greek-crisis
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Will Europe's Leaders Come to their Senses About Greece?
The Greeks have made their choice. Faced with two painful alternatives, they chose to stand with their elected leaders and to reject overwhelmingly the harsh, unending austerity that their creditors demanded. Now Europe's leaders must make their choice. Will they come to their senses and open new negotiations with the Syriza government? Or will they remain unbending, force Greece into official bankruptcy and inexorably out of the euro?
Jul 07, 2015
The Greeks have made their choice. Faced with two painful alternatives, they chose to stand with their elected leaders and to reject overwhelmingly the harsh, unending austerity that their creditors demanded. Now Europe's leaders must make their choice. Will they come to their senses and open new negotiations with the Syriza government? Or will they remain unbending, force Greece into official bankruptcy and inexorably out of the euro?
Too much of what has been reported in the U.S. media in these last, fraught weeks has echoed fulminations of the creditors that distort reality. Syriza has been painted as a party of the extreme left, with Prime Minister Alexis Tsipras's government depicted as irresponsible and irreverent. This scorn comes from troika functionaries committed to enforcing utterly ruinous policies and whose behavior towards a democratically elected government has been insulting in the extreme.
Contrary to reports, the Syriza government has always been pro-Europe, and committed to staying in the euro. Following the troika's policies, the Greeks have suffered a brutal depression, with worse unemployment than the United States in the Great Depression, and the obliteration of one-fourth of the country's gross domestic product. And that depression has left Greece with a greater debt burden than it carried before the calamity. Worse, as part of the euro zone, Greece has not been able to depreciate its currency to make its exports or tourist industry more competitive. It can only repay its debts by savage cuts in spending that have crippled its economy.
Syriza was elected with a mandate to negotiate a new deal that would give Greece some hope of a way out. Syriza sought both an easing of austerity and a change in its terms. The troika's negotiators demanded not only that austerity would continue for years on end, but also that they would dictate its terms. Syriza made concession after concession -- disappointing or even outraging many of its own supporters -- but held to its core values. It would accept austerity, but raise taxes on the rich rather than cut the pensions of the poorest retirees. It would not trample labor rights nor continue a fire sale of privatizations.
The Greeks citizens have given Europe another chance by overwhelmingly voting "no" on the ruinous conditions their government refused to accept. Now, Europe would do well to have some adult leadership. The European Central Bank (ECB) should resume the lending needed to reopen the Greek banks. The European community should resume negotiations, offering Greece a course that holds some hope for a way out -- at the very least a less harsh austerity and a greater flexibility as to how the budget balance or surplus is achieved. If the democratically elected government of Greece chooses to crack down on the country's wealthy tax dodgers rather than cut the pensions of the poorest retirees, its creditors should not stand in the way. And longer term, although this is surely too much to hope, Germany and France should lead the launch of a new European wide program of public investment, giving the indebted countries a chance to repay their debts and rebalance their economies in the context of growth, not stagnation or worse.
This is also time for President Obama to speak publicly about the importance of Greek democracy and the importance of the U.S. alliance with Greece. He should embrace the choice of the Greek people, making it clear that forcing the country into unending depression is not a sensible course. He should urge France and Germany to show flexibility in policy and not just in posturing. And the Treasury Department should exercise its influence on the International Monetary Fund, urging managing director Christine Lagarde to stop insisting on harsh conditions that even the IMF has acknowledged have already been proven a failure.
Neo-conservatives like Robert Kaplan are issuing alarms about NATO's southeastern flank in Cold War terms. But this isn't a question of a renewed Cold War; it is a question of a continued class war. At issue isn't some armchair strategist's nostalgia for Cold War maneuvers, but whether Europe's creditors and market fundamentalists will use the crisis to further erode the social contract across the European Union or whether a pro-European left can revive Europe's original vision of peace and widely shared prosperity. If Syriza fails, the likely result is not a leftist government embracing the Russians, but a neo-Nazi party -- like the Golden Dawn -- peddling nationalism and hate.
Decisive action must occur in a matter of days, if not hours. The ECB will decide on Monday whether it will provide Greece's banks with desperately needed liquidity. If the ECB refuses, Greek banks will be forced to issue some form of scrip or IOU to pay payrolls and pensions. That script will turn into an independent currency if no agreement can be reached. The Greeks will be forced from the euro in an inevitably chaotic exit. They will suffer an even worse depression, but gain their own currency and the possibility of a way out. The euro will be exposed as fragile, with weaker countries paying the price in higher interest rates and greater burdens. And the nationalist parties on the right will be strengthened across the European Union.
Syriza's outgoing finance minister, Yanis Varoufakis, expressed the hope that the referendum would allow Europe to "begin to heal its wounds, our wounds" He presented his resignation after the referendum as a peace offering to European negotiators. And in contrast with the harsh statements by European functionaries, the French Finance Minister Michel Sapin offered a ray of light, suggesting that France could support further debt relief for Greece and that a Greek exit from the euro zone is "not desired by the French president." Hopefully Europe's leaders will understand that this is not about accounting, but the continent's future.
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IMF Report Admits IMF's Obsession with Capitalism Is Killing Prosperity
"By releasing this report, the IMF has shown that 'trickle-down' economics is dead; you cannot rely on the spoils of the extremely wealthy to benefit the rest of us."
Jun 16, 2015
In light of how the International Monetary Fund has spent most of its existence parading around the world telling governments to make their economies more friendly for multinational corporations by suppressing wages, restricting pensions, liberalizing industries, and more or less advocating, they ignore the popular will of workers and the less fortunate--all in the name of market capitalism and endless economic growth--a new report released by the IMF on Monday contains an ironic warning: stop doing all that.
"This reinforces Oxfam's call on how we need to reduce the income gap between the haves and have-nots and scrutinize why the richest 10% and top 1% have so much wealth. By releasing this report, the IMF has shown that 'trickle-down' economics is dead; you cannot rely on the spoils of the extremely wealthy to benefit the rest of us."
--Nicolas Mombrial, Oxfam International
Though it perpetuates the idea that economic growth is the master to whom all should bow, the new research--conducted by the IMF's own economists and submitted under the title Causes and Consequences of Inequality (pdf)--argues that many of the policies promoted by the IMF have harmed nations by exacerbating widespread economic inequality. As many have noted, current disparities between the world's richest and poorest represent a nearly unprecedented level of global inequality, which the report describes as the "defining challenge of our time."
To strengthen economies, the report declares, nations should admit that "trickle-down" theories of wealth and prosperity do not work. Instead of those, the study recommends raising wages and living standards for the bottom 20 percent, installing more progressive tax structures, improving worker protections, and instituting policies specifically designed to bolster the middle class.
"Fighting inequality is not just an issue of fairness but an economic necessity," said Nicolas Mombrial of Oxfam International in response to the report. "And that's not Oxfam speaking, but the International Monetary Fund."
This is not the first time the IMF's research has bolstered its biggest critics' arguments. According to the International Business Times, the new analysis on inequality "echoes previous IMF research that show that redistributive policies have a positive effect on countries' economic output."
But as the Guardian's economics editor Larry Elliott notes, the new paper creates obvious "tension between the IMF's economic analysis and the more hardline policy advice" it continually gives to countries seeking foreign assistance or development funds. With Greece as the most obvious example, Elliott cites details from the report and writes:
During its negotiations with Athens, the IMF has been seeking to weaken workers' rights, but the research paper found that the easing of labor market regulations was associated with greater inequality and a boost to the incomes of the richest 10%.
"This result is consistent with forthcoming IMF work, which finds the weakening of unions is associated with a higher top 10% income share for a smaller sample of advanced economies," said the study.
"Indeed, empirical estimations using more detailed data for Organization for Economic Cooperation and Development countries [34 of the world's richest nations] suggest that, in line with other forthcoming IMF work, more lax hiring and firing regulations, lower minimum wages relative to the median wage, and less prevalent collective bargaining and trade unions are associated with higher market inequality."
The study said there was growing evidence to suggest that rising influence of the rich and stagnant incomes of the poor and middle classes caused financial crises, hurting both short- and long-term growth.
No one should be fooled into thinking that the new research aims to alter the IMF's central commitment to advancing the financial interests of the global elite.
In fact, part of the argument presented in the paper is that such enormous levels of global economic inequality could seriously undermine the institution's public defense of capitalism's overall supremacy. "For example," the paper states, "[too much inequality] can lead to a backlash against growth-enhancing economic liberalization and fuel protectionist pressures against globalization and market-oriented reforms."
According to a recent report by Oxfam International, almost half the world's wealth is owned by one percent of the population, while the bottom half of the world's population owns the same wealth as the richest 85 people in the world. For Oxfam's Mombrial, who heads the international anti-poverty group's office in Washington D.C., the IMF's report is a welcome development that should put a nail in the coffin of the austerity-driven policies prescribed by governments and powerful financial institutions like the IMF, World Bank, and others.
"The IMF proves that making the rich richer does not work for growth, while focusing on the poor and the middle class does," Mombrial said. "This reinforces Oxfam's call on how we need to reduce the income gap between the haves and have-nots, and scrutinize why the richest 10 percent and top 1 percent have so much wealth. By releasing this report, the IMF has shown that 'trickle-down' economics is dead; you cannot rely on the spoils of the extremely wealthy to benefit the rest of us. Governments must urgently refocus their policies to close the gap between the richest and the rest if economies and societies are to grow."
As Oxfam and other international campaigners have been saying it for decades, he concluded, "The IMF has set off the alarm for governments to wake up and start actively closing the inequality gap, not just between the rich and poor, but for the middle class too. Their message to them is pretty clear: if you want growth, you'd better invest in the poor, invest in essential services and promote redistributive tax policies."
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