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Fritt fall - finanskrisen og utveier
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FRITT FALL - Finanskrisen og utveier
Milliardene ruller ut av statskassen til krisepakker. Samtidig har regjeringen ikke tatt tak i årsakene til finanskrisa. Attac foreslår i en ny bok en rekke tiltak som kan demokratisere finansmarkedene, og hindre at vi får stadig nye finanskriser. Hva bør regjeringen gjøre? Helene Bank, nestleder i Attac Norge og bokredaktør Magnus Gustavson, Civita Per Olaf Lundteigen, stortingsrepresentant, SP (invitert) Møteleder: Astrid Sverresdotter Dypvik, journalist i Dagbladet Boka "FRITT FALL - Finanskrisen og Utveier" kan kjøpes til rabattert pris på møtet. Boka er et samarbeid mellom Attac Norge og Res Publica Photos
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 Economic Crisis the Inevitable Result of “Capitalism's Self-Inflicted Apocalypse”
JUAN GONZALEZ: Treasury Secretary Timothy Geithner has unveiled a sweeping new plan that calls on the United States and other nations to offer billions more to bail out economies in crisis around the world. The news comes days after the World Bank warned the world is falling into the first global recession since World War II. The economic crisis is projected to push around 46 million people into poverty this year. Geithner said the Obama administration will ask Congress to make $100 billion more available to the International Monetary Fund to aid struggling nations.
The debate over how to rescue the global economy is setting up a clash of ideas, as finance chiefs meet for international talks in London this weekend to work out a unified approach to the crisis.
AMY GOODMAN: Amidst the economic turmoil, Geithner appeared on the PBS Charlie Rose Show this week for an extensive interview. Near the end of the interview, Charlie Rose asked Geithner, "Will capitalism be different?"
CHARLIE ROSE: Will capitalism be different?
TIMOTHY GEITHNER: I think capitalism will be different, and the financial system will be dramatically different. It's already dramatically different. Again, if you look at the scale of adjustment and restructuring in the financial, it's already happened. It's profound in scope already. So if you just look at the system today relative to what was true three years ago, in terms of the institutions that existed then, and their basic shape has changed dramatically. And there's going to be more changes ahead. But I think it will emerge stronger. This will clean out a lot of the excesses and bad practices. And those that don't get cleaned out just by experience and knowledge now, better regulation and oversight, better rules of the game, enforced more cleanly, we'll fix.
AMY GOODMAN: That's Treasury Secretary Tim Geithner.
Well, our next guest argues "free-market corporate capitalism is by its nature a disaster waiting to happen." Michael Parenti is a longtime political analyst, author of twenty books, including Democracy for the Few and Superpatriotism. His latest article on the financial crisis, "Capitalism's Self-inflicted Apocalypse." He joins us now in our firehouse studio. He gave a talk last night at Fordham called "Wealth, Poverty, and Empire."
Welcome to Democracy Now!
MICHAEL PARENTI: Hello, Amy. Hello, Juan.
AMY GOODMAN: What should we understand right now, Michael Parenti?
MICHAEL PARENTI: Well, we should understand that the problem we're facing is one which has to do with equity and fairness, that when the foundation gets consumed, the apex gets bloated, it's going to collapse. And that's just what's happened. We had eight years of a president telling us that the economy was doing very well, and for his guys, it was doing very well. But in those eight years, wages remained flat or actually declined. And what we had here is so much money and nowhere to put it anymore. But that's because there were no people below able to consume and buy the things they were supposed to buy. The assumption was that the housing market would just continue to go up and up and up, so you can do all these finaglings, but there weren't enough people to buy these new houses. You had, in 2006, five people doing the work. By 2007, four workers were doing the work that it took five to do in 2006. That was a 20 percent increase in productivity, but there wasn't any 20 percent or ten or five or three percent increase in income to those workers. People are just working harder and harder for less and less.
And the goal really—the goal is really to bring America to a closer resemblance to Indonesia . The goal is to avoid Denmark and get Indonesia . I mean, they say things like that. In 1978, a number of these financiers came out and said, "This country is just heading for a social democracy, and we don't want that." I mean, they used the term "social democracy." They're aware of these things. A few months ago in The New Yorker, there was an article about how Republicans had a loss for issues, and one of them said, "Well, the reason we're at a loss is because we've accomplished all we wanted to. We've destroyed the social democracy." And that's their goal.
And if you listen to them now, I mean, it's fascinating and outrageous. They're talking about doing nothing, just putting a cap on all spending, that the market is in a stage of correction. They use terms like "correction" or "adjustment." They don't mind recessions. Recessions are fine. It allows them to buy up smaller companies at bargain prices. It disciplines labor. It humiliates and beats back people. And this, I think, is what we're facing. And I'm infuriated by the Republicans in the Congress and the way they're going at this. The only passion they show is to protect the tax cuts for the super rich. That seems to be the only interest they have.
JUAN GONZALEZ: Michael Parenti, I'd like to ask you, in terms of this—we're almost a year now into this—into the beginning of the unraveling of this crisis, yet there's been no attempt so far to have any kind of reforms, of regulation. We still have a situation where a huge portion of the financial system is consumed with all of these derivatives and credit defaults, while it's not even in your normal banking procedures. How do see this, in terms of your sense of a self-inflicted apocalypse of finance capital?
MICHAEL PARENTI: Well, I argue that one of the functions of a capitalist state is to defend capitalism from itself, to defend capitalism from the capitalists. It was Marx—dare we mention him? I hear he's coming back in style. It was Marx who said one capitalist will kill many other capitalists, that the system begins to consume itself. We see that with Bernard Madoff and the like.
And it's not merely because of a number of wicked personalities, because these personalities are brought to the fore. Those are the people who get the rewards. Those are the people who—yes, and what we need are drastic sets of regulations, and there hasn't been enough talk. We just got a vague reference to it here, Geithner referencing and saying, well, it's going to be a little bit of a different camp, a little more responsible, accountable maybe. But as far as actual regulations, we haven't seen it.
The free market does not work. It's not free. It's not really a market; it's a plunder. And it has to be done away with.
AMY GOODMAN: Talk about the Democrats and Republicans. You said you're infuriated by the Republican response, because they just want tax cuts for the rich. But what about the Democrats—I mean, just now we were playing for you Tim Geithner, the Treasury secretary—and the approach to this crisis?
MICHAEL PARENTI: Oh, it's insufficient. I mean, that's what's coming out with your questions. It's insufficient. They're not dealing with systemic questions. There's all this debate about the stimulus package. Hardly a word has come out about the Federal Reserve giving away two-and-a-half trillion dollars, just giving it away unaccountably.
AMY GOODMAN: Explain that.
MICHAEL PARENTI: The Federal Reserve just went—while we had this $750 billion stimulus package, which was passed by Congress, the Federal Reserve printed up—it can print up money and create money—and handed out over $2 trillion to the financial community in America, with no accountability, no debate in Congress and very little notice.
AMY GOODMAN: So, what's the significance of that?
MICHAEL PARENTI: Well, the significance is that we're going to—I mean, that's our money, that it becomes real money when it becomes debt, and we've got to pay it.
You see, the Republicans were never against debt; they were the biggest debt spenders there ever was. When Ronald Reagan came into office, the national debt was $800 billion. When he left office, it was $2.5 trillion. I mean, it was OK with him to spend. He also put in the biggest tax program that ever was, but it was a regressive tax. It was a Social Security tax on tens of millions of people. When George Bush, Sr. came in, the national debt went from $2.5 to $5 trillion. Clinton—I'll give him credit for that one thing—he did try to go for solvency. But when you got to George Bush, Jr., for eight years, the debt has gone from $5 trillion to $10 trillion. And these Republicans were voting for that all along. All these spending bills were theirs. So, you see, they don't mind debt, because debt is really a way of upward distribution. You tax the common people, and you give the money to rich creditors. It's a very regressive way of redistributing wealth upward. So debt is fine with them.
JUAN GONZALEZ: I'd like to ask you, given the increasingly global connections of our banks and other multinational corporations, the issue of how you remedy a crisis in one country. For instance, I heard last night on C-SPAN the hearing that Congressman Kucinich had of the bailout. He had an oversight hearing yesterday. And he questioned the Treasury Department over the fact that the bailout money has been going to banks that, in some cases, are then using the bailout money to invest overseas, a $6 billion—
MICHAEL PARENTI: Right.
JUAN GONZALEZ: —investment in Dubai, an $8 billion investment in a company in China—
MICHAEL PARENTI: China, I was just going to say, right.
JUAN GONZALEZ: —I think by Bank of America, so that—and Kucinich was asking, what are we doing giving money to bailing out banks who say they can't lend in the United States, but then they use the money in investments abroad? How do you reconcile the global connections of these companies with the need in one particular country to stem the financial crisis?
MICHAEL PARENTI: Well, I mean, you've got to stop these kinds of examples that you're giving, that the money should be spent where it has to be, and the money should come with lots of strings attached to it. And actually, it should be the government making direct investments. The government should go directly into production. It should be the government that's building housing. It should be the government that gives healthcare.
Healthcare is a perfect example of that, where you—health coverage is terrible. So to give everybody health coverage will put us all still fighting these private insurance companies for money and not getting it and such. And the insurance companies get nothing—give nothing, do nothing. They just are toll. They just get billions of dollars that comes through and perform nothing. If you had single payer, it would just come right from the government, like Medicare does or something like VA Hospital, and that would be it.
And so, with the banks, perhaps we should start nationalizing banks. We should start bringing a closer link between the financial system and what's called—very revealingly called the "real economy," where people still need to work and consume and live. And that might be a way.
What do we do internationally? I don't know. You've had some good people on. You'll have to ask them next time.
AMY GOODMAN: What do you see is the future of capitalism, Michael Parenti?
MICHAEL PARENTI: I see it as a future in which there's going to be a lot of suffering. I see it—the goal is to have more and more Indonesias and fewer Denmarks and such.
AMY GOODMAN: And that means?
MICHAEL PARENTI: That means that even in the social democracies in Western Europe, there are going to be cutbacks, there's going to be privatization, deregulation, greater—growth of inequities, rollbacks of human services and such, in countries that were pretty decent, countries where capitalism was reined in and held in line, to some degree, anyway.
AMY GOODMAN: And aside from the brutality of Indonesia, what it means when you say "and more Indonesias"?
MICHAEL PARENTI: Well, Indonesia, I mean it's a free market paradise. They talk about free market. In Indonesia, there are no consumer protections, there are no regulations, there is no public medical care, there's no public education. People just die younger.
AMY GOODMAN: Do you see mass riots happening?
MICHAEL PARENTI: No. Well, one thing is that people can become so demoralized and such, and it's a pretty repressive state, so it's not that easy.
AMY GOODMAN: Michael Parenti, we want to thank you for being with us. His latest article on the global economic meltdown, "Capitalism's Self-Inflicted Apocalypse."
MICHAEL PARENTI: I hope next time I'll have better news for you, we'll have a nicer subject to be discussing. IV Online magazine : IV410 - March 2009
World Social Forum
A New Start with the 2009 WSF
An interview by Pauline Imbach
Éric Toussaint The Belém declaration is different. It includes a fundamental diagnosis of the crisis of the capitalist system and a clear position as to how to move out of it. Its title and subtitle sum up this new approach: We won’t pay for the crisis! The rich have to pay for it! Anti-imperialist, anti-capitalist, feminist, environmentalist and socialist alternatives are necessary!
Some talked about a new start for the movement for another globalization with the World Social Forum in Belém. Do you think this is the case?
Since the World Social Forum (WSF) went through difficult moments in 2006, 2007, and 2008, we can really call this 9th edition a new start. It was a huge success in various respects. Moreover a large majority of participants were under 30. All those young people massively attended the various events. Another element that contributed to the Forum being a success is the visible and active presence of indigenous peoples, mainly from the Amazon and the Andes. What is also indicative of a new start is that most participants were keen to find in-depth explanations for the various aspects of the current crisis and to draw their own conclusions, while eager to act and implement alternatives. This is an obvious change compared with the Nairobi WSF in 2007, where the movement seemed to be running out of steam and unable to raise fundamental questions. This turns this Forum into the first major international mobilization against the crisis of capitalism that started in 2007. This new start for the WSF and the alter-globalization movement is in stark contrast with the World Economic Forum (WEF) in Davos mourning capitalism. President Lula, who had in former years spent one day at the WSF before flying to the WEF, decided that this time he would only be seen at the WSF and would not go to Davos. This is most significant since it illustrates the depth of the crisis. Lula understood that his social liberal management, which already leads to a lot of questioning from the grassroots, would be even more negatively perceived if he went to Davos. To clip the wings of any criticism on his left he chose to stay in Brazil. Similarly no other Latin American left-wing or centre-left president went to the Swiss ski resort, though several of them were invited. The economic Forum was a sorry spectacle since no significant representative of the Obama administration had bothered to go. Only Vladimir Poutine, the Chinese Prime minister (which says a lot!), and Angela Merckel were there to discuss the survival of capitalism. Nicolas Sarkozy himself had decided against going to Davos. If Lula had gone, or if Obama had sent a high-ranking official Sarkozy would surely have been there! We must also emphasize the media bias. One of the world’s leading financial dailies, the Financial Times, did not print one line about the WSF in Belém while it devoted two special issues to Davos and had over ten pages coverage in its regular issue. By contrast a number of newspapers, TV and radio channels had sent special correspondents (there were about 3,000 journalists) who reported on the event. Some rightly stress the ’reawakening’ or ’second wind’ of the alterglobalization movement. All the daily papers in the State of Para ran five to eight pages about the Forum every day. The international TV channel AlJazira largely covered the event and gave CADTM delegates the opportunity to speak (see the English video at http://www.cadtm.org/spip.php?article4012 ).
What were the major concerns at the WSF? Second, the crimes of the Israeli army against the Palestinian people. The Palestinian issue, though Belém lies over 12,000 km away from Palestine, was very much with us. From day one, with the opening march, a 20 meter long Palestinian flag was unfolded and carried by young people of ENLACE, a far-left current in the Brazilian PSOL party. Several people carried tokens of solidarity with the Palestinian struggle. Though participants had come with different concerns, they insisted on showing their solidarity with the Palestinian people. With this specific situation it was all the wars of aggression that were targeted, such as the war on Iraq or on Afghanistan. All agreed on the demand for withdrawal by the army of occupation.
A third priority issue was the struggle of indigenous peoples in Amazonia and the Andes. The Forum’s first day of work was entirely dedicated to the Amazonian area (an area that extends beyond Brazil and includes part of Ecuador, Bolivia, Venezuela, Peru, and Colombia - not forgetting Guyana, French Guiana and Surinam). The indigenous peoples issue covered the relationship with nature and the part they play in preserving it, as well as the assertion of their cultural identity and the way they are affected by capitalist globalization. Indigenous people have a lot to teach other peoples, especially with respect to their approach to the world (this has already been partly integrated in the new Constitutions voted in Ecuador in 2008 and in Bolivia in 2009). We could only be impressed by the contribution of delegates of indigenous peoples to the Forum’s discussions and proposals. They played a major part. They gave the Forum its particular touch as they focused discussions on the issue of Amazonia and the Andes, and so placed the challenge of climate change at the core of socialist and environmental considerations. Next to these three central issues we discussed a number of significant questions. For instance, thanks to the dynamic of the World March of Women the feminist approach was more visible than in former editions.
What is the significance of the declaration by the Assembly of Social Movements?
Moreover the declaration conveys immediate demands: We must contribute to the largest possible popular mobilization to enforce a number of urgent measures such as nationalizing the banking sector without compensation and with full social monitoring; reducing working time without any wage cuts; taking measures to ensure food and energy sovereignty; stopping wars, withdrawing occupation troops and dismantling military foreign bases; acknowledging the peoples’ sovereignty and autonomy and ensuring their right to self-determination; guaranteeing rights to land, territory, work, education and health for all; democratizing access to means of communication and knowledge . [2] The groups that were most actively involved in the drafting of the declaration of social movements were CADTM, which put forward a proposal for collective drafting, the World March of Women (WMW), Via Campesina (particularly its Brazilian branch the Movimento sin Terra), the Organización continental latinoamericana y caribeña de estudiantes (OCLAE), delegates from European, African, and Asian social movements, and delegates from indigenous associations in Amazonia and the Andes. Usually, during forums, the conclusions of the Assembly of Social Movements (ASM) are made public on the last day. This year, since the last day was dedicated to thematic assemblies and the Assembly of Assemblies, on which more below, the Assembly of Social Movements took place on 30 January, two days before the end of the Forum. On hearing the conclusions of ASM, Joao Pedro Stedile, from MST, said such a declaration was evidence of the ASM’s maturity in that it defines a clear agenda. In this Forum the ASM still played a stirring part since it defined issues in radical terms and reinforced a dynamic that had been present all through the Forum, namely a search for global and radical explanations and solutions. If we read the declarations that most of the 11 thematic assemblies adopted on 1 February morning, we notice that the crisis is repeatedly analyzed as a crisis of capitalism. It is particularly striking when we read the declaration of indigenous peoples, that of the anti-war movements, or that adopted by the assembly of women. We are not interested in palliative answers based on market logic in response to these crises; this can only lead to a perpetuation of the same system. We need to advance in the construction of alternatives [. . . so as to confront] the capitalist and patriarchal system that oppresses and exploits us. [3] The declaration of indigenous peoples uses similar terms to those found in the ASM declaration to formulate demands for an antiracist, antipatriarchal and socialist alternative that would respect the earth mother. The crisis of the capitalist, eurocentric, patriarchal and racist development model is complete and opens onto the biggest social and environmental crisis in the history of humankind. The financial, economic and energy crisis contributes to structural unemployment, social exclusion, racist violence, machism, and religious fanaticism. So many deep and simultaneous crises spell out a genuine crisis in Western civilisation, the crisis of the ‘capitalist development and modernity’ that jeopardizes all forms of life. Yet even in such a quandary some still dream of improving this model and will not recognize that the present crisis is a product of capitalism itself, on eurocentrism with its model of a State for one nationality, of cultural homogeneity, of Western positive law, and of commodification of life. [4] In the drafting committee we had debated how we could indicate the contribution of indigenous organizations to the struggle against capitalist globalization. A first draft mentioned the indigenous movements ‘reappearing’ over the past 15 years, which I hardly found satisfactory. And as soon as the text was read in the general assembly, several delegates of indigenous movements demanded that the text be changed and mention a ‘new encounter’ between indigenous and social movements over the past years. The indigenous peoples rightly observed that they had not waited for other social movements to find out about them before starting their own struggle. They have been resisting capitalism and various forms of domination imposed on them for five centuries. The assembly considered they were right and the text was changed accordingly.
What can be said about the presence of political parties and certain governments at the WSF? First of all, it should be said that the left-wing Brazilian parties (the PT, PSOL and PSTU) were particularly present in the Forum program itself but that their participation varied in nature. For the PT, it was more a matter of Lula’s government and administration being present (several ministers attended) than of PT participation as such. On the other hand, the PSOL and PSTU, both of them opposition parties, were active in supporting the interests of trade unions they are close to, especially ConLutas and Inter Syndical. The presence of political parties within the Forum precincts seems to me vital, since the Forum should be a platform for debate between political parties, social movements, citizen organizations and grass roots movements. It would be perfectly logical if, at each edition of the Social Forum, the political parties linked to the Forum process were present. It is time to end the “ghetto-ization” of the social movements, NGOs and citizen movements, as if they were incapable of debating, let alone actively collaborating, with political organizations that are willing to fight against capitalist globalization. Note that for the first time, four presidents were there together: Evo Morales (Bolivia), Rafael Correa (Ecuador), Fernando Lugo (Paraguay) and Hugo Chavez (Venezuela). They represent the aspirations of the global justice movement in general and Latin-American social movements in particular. We should recall that in 2005 there were two meetings of Latin-American presidents during the WSF - the first attended by Hugo Chavez, and later, a second by president Lula. In addition, on the occasion of the 2006 polycentric forum in Caracas, Hugo Chavez took part in another big public meeting. What was new at Belém was that for the first time, four presidents were addressed by social movements. It is very important that social movements confront presidents with a number of realities and try to get them to commit to measures for implementing an alternative model and regional integration in Latin America – an integration that is genuinely favourable to the people, respectful of nature and not subordinated to the interests of capitalist transnational corporations. It should also be emphasized that the four presidents had been invited by social movements, specifically on the initiative of the MST (Landless Rural Workers’ Movement), La Via Campesina and the WMW (World March of Women), all of which had decided to exclude Lula, given the content of his anti-social policy (the local press made much of this exclusion). Lula’s political stance is close to the liberal social model of Gordon Brown in England, or of Zapatero in Spain. It mainly favours the big capitalist Brazilian companies established throughout Latin America, the powerful Brazilian agribusiness sector, the private banking system, and the big transnational corporations located in Brazil. It is a policy that promotes exports as fundamental to development, in particular the sugar cane industry with a view to producing ethanol, and transgenic soy exports. In ecological terms, however, the consequences for the last five years have been catastrophic. Since 2003, Lula’s policies have engendered deforestation in Amazonia over an area equal to that of Venezuela. 1,000 social movement delegates were present at this meeting attended by four presidents. Many more WSF participants would have liked to be there but it was necessary to proceed by delegation. The session began with a political address by Camille Chalmers, secretary general of PAPDA (Platform to Advocate Alternative Development) in Haiti, who is a member of Jubilee South, CADTM and COMPAS (a Caribbean alliance of social movements). He stressed the positive nature of the audit initiative of the Correa government in Ecuador and the partial suspension of commercial debt repayments. He then addressed Hugo Chavez and Evo Morales on setting up debt audits in their respective countries and reminded them that they had undertaken to do this after the Alba meeting, in the presence of Rafael Correa, at the end of November 2008 in Caracas. The first president to speak was Rafael Correa. His arrival at the Forum had been a subject of controversy. The day before he came, the Confederation of Indian Nationalities of Ecuador (CONAIE) sent a message to the WSF asking that Correa be declared persona non grata in view of his policy regarding foreign investment in the country’s extractive industries, which directly affect the indigenous populations. In response to this radical challenge, in his speech Rafael Correa adopted a very left-leaning discourse on 21st century socialism. While his speech might be seen as altogether positive, placed in its context it appears to be a way of regaining a legitimacy that has been damaged by the type of capitalist, productivist, national model he is installing in his country. In addition, he made no mention of the debt issue, whereas in his introduction Camille Chalmers had stressed the positive nature of the debt audit and Ecuador’s partial suspension of repayments since November 2008. Fernando Lugo then made a speech in which he stressed that it is absolutely vital for Brazil to acknowledge that the application of the Itaipu treaty is causing a terrible and unfair debt burden for Paraguay. The binational company Itaipu has a total debt of US$ 20 billion, half of this sum to be repaid by Paraguay and the other half by Brazil. Almost 95% of these debts are owed to Brazilian companies. Lugo explained that he expected Brazil to adopt a friendly and honourable stance by acknowledging the one-sided nature of this treaty. The Paraguayan authorities and people want the debt held against them to be radically reduced. They want to be able to increase the price of the electricity they supply to Brazil and sell electricity to other countries in the region, so as to increase the State’s revenues and thus be in a position to start the social reforms for which Lugo was elected in April 2008. Evo Morales was the next to speak. His speech was interesting in that he positioned himself as being part of the social movements. He affirmed that none of the presidents here today would be president if there had not been profound social struggles and if social movements had not frequently overthrown presidents favouring neo-liberal policies. He told the social movements they should not hesitate to summon the presidents regularly so that they would be obliged to make reports. Evo Morales alluded to the situation of his country after the adoption by referendum of the new constitution on 27 January 2009 (that is, on the first day of the WSF), which is a major step forward for Bolivia. Chavez, in his turn, insisted on the anti-capitalist and socialist option and added a feminist dimension by declaring that he had become a firm feminist. After these speeches, João Pedro Stedile, president of MST, gave a closing address that was very exemplary in manner. Instead of congratulating the presidents, he said that the time they had lost and the fact that they had proven unable, in the face of the crisis, to adopt measures for the benefit of the people, were regrettable. In this way he was criticizing all the Latin-American presidents who met in Salvador de Bahia in December. Addressing the four presidents before him, he declared that in the absence of a joint response from all the presidents, the social movements expect the four left-wing presidents to take fundamental, stuctural measures without delay to respond to the capitalist crisis. This meeting was an important event within the WSF, and a step forward in the dialogue between social movements and governments. This type of exchange could only happen in Latin America, in the sense that several left-wing governments have emerged from radical social struggles linked to the WSF dynamic: before being elected president in April 2008, Fernando Lugo had attended the WSF of Porto Alegre in 2005 as a Paraguayan delegate, travelling there by bus from Asunción. At the end of this day, president Lula called another meeting at another venue in Belém – more a presentation of his politics than anything else. He invited H. Chavez, R. Correa, E. Morales and F. Lugo, all of whom also spoke. This meeting took place in a very different context. There was no question of dialogue with social movements or of listening to eventual criticism of his policies or those of the other presidents. Can we note a switch to the left among some Latin American governments? Is there any progress in terms of regional integration? A source of inspiration should be the proposals drawn from the conference that was convened by the Venezuelan authorities in October 2008, “Responses from the South to the global economic crisis”. This conference resulted in a declaration [6] which included a series of very concrete proposals that, unfortunately, have not been followed by decisions up to now. As far as integration is concerned, it must be noted that the Bank of the South, which has officially existed since December 2007, has not yet started business. It is clearly in a stalemate. After these very important critical observations, some positive elements deserve to be highlighted. First, in December 2008 Salvador do Bahia hosted a meeting of all Latin American presidents which marked Cuba’s return to the common Latin American scene. On this occasion, the Mexican president Felipe Calderon (right wing government) and Raul Castro (from Cuba) met without the US government being invited to this summit. And yet, since the 1959 Cuban revolution, the US had managed to diplomatically isolate Cuba to such an extent that the main meetings on the continental scale were those of the Organization of American States (OAS), which consists of the states of North and Latin America, excepting Cuba. Now Latin American states, including right wing governments, are forming a coalition without Washington, so as to resolve by themselves some regional problems, such as the conflict that broke out on 1 March 2008 after the Colombian army intervened on Ecuadorian territory. It is positive. The other positive element regarding the integration process is the continuing enlargement of the ALBA (Bolivarian Alternative for the Americas). At the beginning, it included Cuba, Venezuela and Bolivia. In 2008, it extended to include Honduras and the island of Dominica. For some months we have noted Ecuador’s cautious rapprochement.
Was there anything new about the organization of the Forum? Yes. The Assembly of Assemblies, which followed the self-managed thematic assemblies, is an important innovation. From the first, WSF social movements have established the tradition of a final unifying assembly, convened alongside the official programme of the Forum. For several years, a series of constituent parts of the Forum have been asking for the Forum itself to actively and consciously promote convergences among participating organizations, so as to bring forth common alternatives, common actions and proposals. There was some resistance within the International Council (IC), but this year is a turning point and marks an advance for the WSF with the convening of the Assembly of Assemblies.
On the first day (27 January) the Forum started with a big opening march in the streets. On the second day all activities focused on the Amazon region, which highlighted the contribution of indigenous peoples. This pan-Amazon day was followed by two days in which all topics could be dealt with in self-managed activities. And finally, on the morning of the last day (1 February), self-managed thematic assemblies were held, followed in the afternoon by an Assembly of Assemblies where the conclusions of each thematic assembly were presented as well as the final declaration of the Assembly of Social Movements – ASM – (which took place on 30 January). It was obviously an extremely positive choice. This being said, it has to be qualified: the IC and the local organizing committee did not put enough energy in coordinating the self-managed activities of the third and fourth days. This resulted in too much dispersion since almost 2,000 activities were organized. In the 4 to 6 months before the Forum a group of volonteers and permanent staff should have been in touch with all the organizations registering activities so as to group and merge them. It would have avoided many duplications. In this respect the CADTM [8] made a special effort since all its activities were co-organized with others. The CADTM did not organize any activity on its own. As far as responses to the crisis are concerned, the CADTM was involved in two initiatives that gathered tens of different organizations [9]. Similarly activities on the debt issue were held with Jubilee South, Latindadd, and national campaigns active on the issue, especially in Brazil. Compared with the edition held in Nairobi in January 2007, was the Forum more accessible to the more oppressed people? Did the local population actively take part in the Forum? The Forum was very well attended by people of the region. About 100,000 people from the state of Para, the capital of which is Belem, were present. The entry fee for Brazilians amounted to 30 reals, that is 10 euros, the price of 8 to 10 meals in a popular canteen. It was thus a high price to pay for the sector of the population that devotes 80 per cent of its income to mere survival. The entrance fee should have been even lower so as to prompt larger participation.
Another questionable aspect, for which the organizing committee is not responsible, but which is the result of the federal government’s and the state of Para’s policies, is the discrimination against the poorest neighbourhoods of the city. 200 antiriot police were stationed in the two poorest neighbourhoods and the authorities imposed the Ley Seca, a law that prohibits selling alcohol in the evening. It is thus an obvious discriminatory policy against the “dangerous classes”, to use a 19th century expression. In the rest of the city, the police presence was very discreet and alcohol could be sold at any time of the day and night. To conclude, the WSF should be fully open to the local populations without any financial barrier. The organization of a Forum should not be accompanied by security measures in which the police target the lower classes, while these ought to be the central actors of change in a process like the WSF and alterglobalism. What are the developments within the International Council (IC)? A positive evolution has been noted within the IC around this WSF. On the one hand, before the Forum, given the strategic choice of convening an Assembly of Assemblies, and on the other hand, after the WSF, during the two-day IC meeting. The Forum’s success resulted in the dispassionate climate of IC debates and proposals. The meeting included a strategic discussion introduced by a document presented by Gus Massiah. [10] Without any vote being held on the subject, the IC was visibly willing to make the action plans succeed, and especially the global week of action that was agreed on during the ASM. Whereas in past editions some constituent parts, including some founding members of the Forum, were opposed to organizing large demonstrations as part of the Forum, especially the ones organized against the war in 2003 and 2004, on this occasion, they approved the agenda of actions. It is clear that the global crisis of capitalism has changed things. Everyone is now faced with the need to act.
This raises several questions: does it reflect the IC’s response capacity, which was slumbering and reluctant to push for action? Will the change observed after the Belém Forum be lasting or temporary? Moreover, a proposal that must be supported was launched during the IC, i.e. holding a meeting in Gaza in 2010, with attendant public activities designed for hundreds of participants. This project has to be made reality in the first half of 2010 to support the Palestinian people’s struggle. Does the social movements’ action plan stand a chance to succeed? For the ASM’s call to be successful all the organizations that participated in the Forum or support this call must organize it all, so that in their respective country or region, this call results in mobilization. There are other events we have to participate in. Surely some current or recent struggles (in Greece, in France, in Guadaloupe and Martinique …) can help this agenda to succeed. Workers and unions affected by the large layoff plans in entire economic sectors must get involved.
NOTES
[1] See http://www.cadtm.org/spip.php?article4087
[2] See http://www.cadtm.org/spip.php?article4087 [3] See http://www.cadtm.org/spip.php?article4104 [4] Original text in Spanish: http://www.cadtm.org/spip.php?article4133 [5] Read: Ignacio Ramonet, La vraie gauche et les mouvements sociaux. http://www.cadtm.org/spip.php?article4102 [6] See the full declaration http://www.cadtm.org/spip.php?article3802 [7] See the final declaration of the debt campaigns which was read by Camille Chalmers (member of CADTM and Jubilee South) during the Assembly of Assemblies http://www.cadtm.org/spip.php?article4128 [8] The CADTM delegation to the WSF was composed of nearly thirty delegates from 14 countries (Argentina, Belgium, Benin, Brazil, Democratic Republic of the Congo, Ecuador, France, Haiti, India, Ivory Coast, Japan, Marocco, Pakistan, Togo. The delegates from Colombia, Venezuela and Tunisia were not able to arrive in Belem). [9] One of these initiatives led to the declaration “Let’s put finance in its place!” http://www.cadtm.org/spip.php?article4120 [10] See the complete document, entitled “The dangers and opportunities of the global crisis” http://www.cadtm.org/spip.php?article4099
The Financial Crisis: A View from the Left Faced with the failure of the financial sector and the possible collapse of the economic system, Republicans and Democrats are working together feverishly to come up with a plan and find the funds to save the American financial system.
The Congress that has been unable to provide adequate funding to health, education, housing, public transportation, social welfare, and environmental programs has suddenly found billions of dollars to save the banks and insurance companies.
When the crisis was ours, they had had no money and no answers. When the crisis is theirs, they find both the funds and a plan.
Comments (8)| Trackback | Print While factories and jobs could not be saved, while homes and health care insurance were lost, the banks must now be saved. When the economy prospered the notion of sharing the abundance was unthinkable, but when the economy fails the idea of sharing the losses and the debt with the people becomes the solution.
Their Solution: State Capitalism
The financial crisis, the most serious since the Great Depression, has led the George W. Bush administration to propose measures that would suddenly transform the American economy -- and least temporarily -- into a kind of authoritarian state capitalism. To prevent the collapse of the American financial system, and the paralysis of the entire economy, the Treasury Secretary Henry M. Paulson and Federal Reserve Chairman Ben S. Bernanke propose that Congress spend hundreds of billions of dollars, though the cost might go as high as three trillion dollars, to buy up mortgages, other securities, and virtually any financial instrument that's in trouble. While the funds to carry out this operation immediately will come from lenders in China, Japan, Europe, and the Middle East, American taxpayers will ultimately have to pay for this rescue.
The result of the bailout would be that the government would virtually control many of the largest financial institutions in the country. The U.S. government and the banks of the country would suddenly be fused -- or perhaps entangled would be a better word -- into one extremely powerful political-economic entity. While the proposal does not envision state control of the economy as a long-term proposition, merely long enough to save the bankers, still the impact of the current proposals now being debated in Congress will be far-reaching. The American government and the people have suddenly found themselves at a turning point which was not foreseen and for which no one was prepared.
The implications of all of this cannot be predicted, though the possibilities can be explored and evaluated. We ask here: Why have the financial institutions such as Bear Stearns, Fannie Mae and Freddie Mac, Lehman Brothers, and American International Group (AIG) suddenly failed? Why is the economy on the verge of collapse? What options have been proposed? What role can the radical, democratic, socialist left play in responding to this crisis? What do we propose to put in the place of the existing system?
Mortgage Madness
As we are now only too well aware, banks made many bad loans to home buyers, loans that were subsequently bundled together and sold off to Fannie Mae and Freddie Mac which in turn marketed them as mortgage-backed securities, guaranteeing both the principal and the interest. The growing awareness that the mortgages and securities lacked the capital to back them up threatened a creditors' run for their money that sparked the current financial crisis. It is those insecure instruments that the American government will now acquire. Or as New York Times columnist Paul Krugman put it in his column, "Cash for Trash."
The mortgage paper, however, formed only one wing of a much larger house of cards that had arisen in the last couple of decades as financiers created new, almost entirely unregulated instruments called derivatives. While derivatives such as such options and futures (gambling on the future value of a stock or a commodity) have been part of the capitalist financial system virtually since its inception, other derivatives, such as credit default swaps, were more recent creations. Essentially a form of insurance against the failure of an investment arrived at by private contract and unregulated by the government, swaps were an attempt to hedge against the very nature of competitive capitalism. These swaps now amount to more than $60 trillion.
The Derivative Disaster
The derivates -- futures and forwards, caps and collars, options and swaps -- were all derived from the performance of some ever more distant asset. Financiers invested and speculated in these instruments both in order to skim off the value of the assets and to protect themselves from risk. All of this trading was highly leveraged, which is to say that collateral in actual assets was far, far less than the supposed value of the derivatives. A series of failures related to these derivative markets signaled a warning: the bankruptcy of Orange County in 1998 and of Long-Term Capital Management in 2000, the collapse of Amaranth Advisors in 2006, and the $7.2 billion dollar loss by Société Général in early 2008. Now the entire complex and fragile system of derivatives threatens to disintegrate.
The U.S. government deregulated the banking industry leaving many of these transactions unregulated while in other areas it reduced the amount of collateral that financial firms were obligated to hold. At the same time, an international derivative market developed, meaning that the increasingly insecure investments became part of the fabric of global financial transactions. Consequently, the crisis in mortgages and mortgage-backed securities and the possible collapse of the American financial market threatens to become a world economic crisis. With American capitalism teetering on the brink of the Second Great Depression, the theory of the self-regulating free market is dead for both conservatives and liberals.
The Failure of the Second American Century
The financial crisis rests upon a much deeper and broader crisis of American capitalism. While the linkages between one aspect of this and another can only be sketched here, the financial crisis is inseparable from several developments which have undermined the overall strength of the U.S. economy.
First of all is the cost of the Iraq War, which has cost more than a $1 trillion while the Bush administration and the U.S. Congress refused to raise taxes to pay for it. Bush is now asking Congress to raise the U.S. debt ceiling to $11.3 trillion dollars, or 79 percent of our $14.3 billion GDP, the highest since World War II. Some 24 percent of that debt is owed to foreign banks. China holds about $500 billion and Japan about $600 billion in U.S. treasuries. Saudi Arabia, Russia, and Brazil are also large U.S. creditors. The value of the dollar, however, is falling and threatens to cost U.S. creditors a lot of money, making it likely that they will invest their money elsewhere. That would mean a rise in the cost of credit in the United States, making business and government more expensive.
Second, the U.S. wars in Afghanistan and Iraq, which were intended to solidify the dominance of the United States for a second American Century, have failed. If the U.S. commanded the Middle East and Central Asia, it would have had its hand on the petroleum spigot giving it a tremendous advantage over Europe, Japan, and China. But the wars have dragged on for years and the United States has failed to impose its will in Iraq, and is mired in a mess in Afghanistan, and has been impelled by its failure there to expand the conflict into Pakistan. Consequently none of the geopolitical and petroleum benefits have materialized. Thought it may not immediately be apparent, the failure of the U.S. in these wars means effectively the failure of a U.S.-dominated world empire. It also means the opening of a new era of world imperialism as the great powers and near-great powers struggle to dominate the world market and global politics through economic might, political intervention, diplomacy, and war.
Petroleum Problems
Third, all of this has been taking place as world petroleum resources dwindled and refining capacity became a problematic bottleneck leading to a rise in fuel prices that dramatically impacts the real economy. Not only the obvious sectors like airlines and truckers or plastics and chemical manufacturers, but every aspect of American and world business has been affected. The fuel costs for ships that carry the containers in which world commerce moves have risen to levels that begin to inhibit trade.
Global Expansion -- National Decay
Finally, the globalization of the world economy, including world production, has meant a complete transformation of American society. The system of industrial production, labor union contracts, social welfare, and consumerism as well as the corporations, communities, and broader society of the United States have been altered in ways that make the country today virtually unrecognizable to someone who grew up in the 1960s or 1970s. Education, health, housing, and social welfare have all failed to keep pace with the demands of the contemporary global economy. Or put differently, the U.S. has competed by degrading resources committed to education, health, housing and social welfare which made it immediately more competitive while simultaneously and grotesquely corroding the foundations of our society, and probably also its ultimate competitiveness, not to mention the degradation of our humanity. The disjuncture between world economic expansion and the decay of the national physical and social infrastructure represents an obstacle to American economy supremacy.
China, India, and Brazil, the three largest developing economies, wrestle with the same issue of the disjuncture between national development and insertion in the international economy, but from the point of view of their ascending economies. Europe and Japan -- after passing through serious problems in the 1980s -- have done better in maintaining equilibrium between world economic developments and their national economies, but all nations face the same problem of finding some position of social poise in a world of international competition. No industrialized nation has done as poorly in dealing with these issues as the United States where official statistics put poverty at 12 percent and other estimates at double that.
The Plan for Salvation
President Bush and Treasury Secretary Paulson have proposed a plan that would simply have the U.S. government rescue the bankers by taking off their hands the devalued assets that they hold at a cost of $700 billion. With the U.S. government taking out the trash, the bankers would have a clean house, prepared once again to make loans and finance business. The Bush plan would give the Treasury Secretary the power to hire Wall Street firms or executives to manage the newly acquired assets; if done by private firms, they would make millions as government managers. Virtually no other details of the plan have been developed and made public.
House Speaker Nancy Pelosi indicated that while the Democrats support the general thrust of the Republican plan, they will also call for Congressional oversight, for assistance to distressed homeowners, and for limits on compensation to corporate executives employed to manage the plan. According to the New York Times, ". . .Democrats said they planned to consider the bailout proposal separately from an economic recovery program that would include new public works spending, aid to states and added unemployment and food-stamp benefits." Virtually no one in business, government, or the media expresses any confidence that this broad plan will work.
Both presidential candidates, John McCain and Barack Obama, support the Paulson plan with reservations, calling for more oversight. Everyone understands that with a new administration there will have to be a re-regulation of the economy, though on exactly what terms is unclear. McCain would no doubt prefer minimal government oversight and Obama more regulatory action, yet neither candidate has developed a plan that derives from the needs of the American people.
Why the Plan Will Fail
The Paulson plan by itself will fail because it seeks only to restart the economy on the same basis, with all of the problems already touched on above. Everyone recognizes that the plan itself is not enough, but McCain's proposal of mere oversight ignores the reality of the economic disaster that has befallen us and the capitalists' need for intervention, while Obama's economic program is too moderate and too modest to have much impact on a disaster of this scope.
Even if the Paulson plan passes, the next administration will face a continued unraveling of the financial system, the persistence of recession, and the broader issues which derive from both the decline of the United States as a world power and the coming end of the petroleum-based economy, and, we should also note, the environmental crisis. What is needed is not a program aimed to save the bankers and the capitalist system, but one which begins with what we so often erroneously call the American middle class, but would be better called working people, and with the working poor, the casual laborers, and the just plain poor.
We need at once a moratorium on foreclosures, an end to adjustable rate mortgages, renegotiation of 30- and 40-year mortgages and creation of a financial program to aid struggling homeowners. We must tax the banks, insurance companies, and corporations which have profited in the course of creating the financial crisis and make them pay the costs of reconstruction of the financial system, a new system. We need to create affordable and attractive public housing to meet the needs of those who now struggle to pay market rents. We must re-regulate the financial sector and create state and social credit agencies. Still, all of this will only be a bridge over troubled waters, and we may cross the bridge only to find a rising tide on the other side.
A Socialist Alternative
The socialist alternative begins with the understanding that the economic crisis provides an opportunity to rethink and then to redo our economy and our society. While we oppose the efforts to save the capitalist system, we need to demand programs to support its victims. If we are going to spend billions and trillions of dollars to revamp the economy, then it should not be to save the bankers, financiers, and speculators who have brought us to ruin, but rather to keep people in their homes, to find them jobs, and to win them health insurance. If the government is to own things, then it should own not only financial institutions, but also productive industries and construction companies so that we might build a national rail system. If the government owns things, then we should have a national plan for the economy, elaborated through democratic institutions.
To create such a system of democratic socialism which represents the human alternative to an economic crisis suggests a political struggle, which means the building of a new political party to the left of the Democrats. To build such a party that can fight to change the direction of society and build a democratic and socialist alternative will require new social movements larger and more powerful than the civil rights and anti-war movements of the 1960s or even the militant labor movement of the 1930s. Acorn, national network of community organization that focuses on housing issues, called demonstrations around the country saying save homeowners, not bankers. Such demonstrations represent an important beginning of building such a movement.
Everything, however, starts with rejecting the idea that we should save capitalism or reform capitalism. It begins by putting human beings rather than banks at the center of our economic thinking to build a socialist society.
 Dan La Botz is a Cincinnati-based teacher, writer, and activist. He is the author of Rank-and-File Rebellion: Teamsters for a Democratic Union (1990), Mask of Democracy: Labor Suppression in Mexico Today (1992), and Democracy in Mexico: Peasant Rebellion and Political Reform (1995), Made in Indonesia: Indonesian Workers Since Suharto (2001) and the editor of Mexican Labor News & Analysis, a monthly collaboration of the Mexico City-based Authentic Labor Front (FAT), the Pittsburgh-based United Electrical Workers (UE), and the Resource Center of the Americas. His writing has also appeared in Against the Current, Labor Notes, and Monthly Review among other publications.Fnancial Crisis [from Internationalviewpoint.org]
November 2008 - François Sabado
November 2008 - François Chesnais
December 2008 - Andy Kilmister
November 2008 - Michel Husson
February 1996
January 1996
January 2001
February 2009 - Jim Porter
August 2003
June 2008 - Andy Kilmister
Econ. Crisis & Response [from zcommunications.con/Znet.com]
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Eric Toussaint is President of the Committee for the Cancellation of the Third World Debt (CADTM).