Posts Tagged ‘economic crisis’

“Global Imbalances” versus Internal Inequalities: Understanding the World Economy

October 15, 2009


By James Petras,  Axis of Logic, Oct 14, 2009

The deep and ongoing crises of leading capitalist countries, especially the United States, has provoked a debate over the causes, consequences and appropriate policies to remedy it.

The debate has revealed a deep division over the causes and remedies, with Anglo-Franco American (AFA) politicians, columnists and economists on one side and their Asian-German (AG) counterparts on the other.  In general terms the AFA spokespeople put the blame for the crises on external factors, or more specifically they point their finger at the positive trade surpluses, dynamic export sectors and high investment rates in productive sectors and low levels of consumption in the AG countries as the cause of ”unbalances” or “disequilibrium” in the world economy .

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Gorbachev calls for reform

June 7, 2009
Former Soviet leader Mikhail Gorbachev.
Former Soviet leader Mikhail Gorbachev
Worldpress.org, June 7, 2009
AFP

Former Soviet leader Mikhail Gorbachev called for a perestroika, or top-to-bottom reform, in the West, arguing that its current economic model was “unsustainable” and needed replacement.

Commenting on the current global economic crisis, the ex-Soviet president who presided over the collapse of the USSR, said that it was now clear to him “that the new Western model was an illusion that benefited chiefly the very rich”.

“The model that emerged during the final decades of the 20th century has turned out to be unsustainable,” Gorbachev wrote in an op-ed piece in The Washington Post.

“It was based on a drive for super-profits and hyper-consumption for a few, on unrestrained exploitation of resources and on social and environmental irresponsibility.”

Gorbachev predicted “perhaps even greater upheaval down the road” and insisted that the current economic and social model existing in the West needed replacing.

“I have no ready-made prescriptions,” Gorbachev said. “But I am convinced that a new model will emerge, one that will emphasise public needs and public goods, such as a cleaner environment, well-functioning infrastructure and public transportation, sound education and health systems and affordable housing.”

From the mid-1980s, Gorbachev was the initiator of a series of fundamental reforms in the Soviet Union.

Underlying the Economic Crisis is a Human Rights Time Bomb

June 1, 2009

The Economic crisis has only exacerbated human rights abuses

by Irene Khan |   The Independent/UK, May 29, 2009

Underlying the economic crisis is an explosive human rights crisis. The economic downturn has aggravated abuses, distracted attention from them and created new problems. In the name of security, human rights were trampled on. Now, in the name of economic recovery, they are being relegated to the back seat. The world needs a new global deal on human rights – not paper promises but commitment and concrete action from governments.

This crisis is about shortages of food, jobs, clean water, land and housing, and also about deprivation and discrimination, growing inequality, xenophobia and racism, violence and repression across the world. Billions of people are suffering from insecurity, injustice and indignity.

China and Russia are proof that open markets have not led to open societies. Human rights activists, journalists, lawyers, trade union representatives and other civil society leaders were harassed, attacked, or killed with impunity in every world region last year. From Gaza to Darfur and from eastern DRC to northern Sri Lanka, the human toll of conflict has been horrendous, and the lukewarm response of the international community shocking.

Huge resources are being dedicated to fight piracy off the coast of Somalia but not to stop the flow of arms that kill civilians in that country. Military action is being stepped up in Afghanistan and Pakistan but the human rights and humanitarian implications of the conflicts are being underplayed.

Ignoring one crisis to focus on another is a recipe for aggravating both. Economic recovery will be neither sustainable nor equitable if governments fail to tackle abuses that drive and deepen poverty, or armed conflicts that generate new violations.

Our first demand in our new campaign is to the USA and China. The US does not accept the notion of economic, cultural and social rights while China does not respect civil and political rights. Both governments must sign up to all human rights for all. Solutions to global problems must be underpinned by global values of human rights – and those at the top table of world leadership must begin by setting an example.

Taken from a foreword by Amnesty International’s secretary-general to its new report, ‘Underlying the Economic Crisis is a Human Rights Time Bomb’

© 2009 The Independent
Irene Khan is Secretary General for Amnesty International.

President Obama Offers Internationalist Vision

January 21, 2009

By Jim Lobe | Inter Press Service


WASHINGTON, Jan 20 (IPS) – Speaking before a record crowd estimated at between two and three million people at his inauguration here Tuesday, U.S. President Barack Obama promised a foreign policy of “humility and restraint” and “greater cooperation and understanding between nations”.

In his first address as president, Obama also said he will take “bold and swift” action to address the deepening economic crisis designed to roll back the excesses of the market and “lay a new foundation for growth,” and to ensure that, in dealing with terrorist threats, he will seek to protect the rule of law and human rights.

“As for our common defence, we reject as false the choice between our safety and our ideals,” he asserted in an implicit rejection of the policies of his predecessor, George W. Bush, that received the strongest applause of a 15-minute address delivered shortly after he was sworn into office by Supreme Court Chief Justice John Roberts on the balcony of the U.S. Capitol.

“Our Founding Fathers, faced with perils we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generation. Those ideals still light the world, and we will not give them up for expedience’s sake.”

Obama’s swearing-in, which took place at noon in bright sunshine but frigid temperatures, was preceded by 90 minutes of pomp, music and circumstance, as the nation’s governors, congressmen, senators, past presidents and vice presidents all filed in before Bush himself was announced – to scattered booing and then an embarrassing silence, followed by Obama, who drew waves of cheering.

But most impressive was the immense crowd that gathered for the occasion. It stretched from the base of the Capitol Building down the stately National Mall to the Lincoln Memorial some three kms away. The previous record for an inauguration was 1.5 million in 1965 when Lyndon Johnson was sworn in for his first full term.

The celebration was clouded shortly later Tuesday afternoon as news spread that Sen. Edward Kennedy, who was diagnosed with brain tumor last year, reportedly suffered a seizure during a lunch reception held for Obama in the Capitol by the Congressional leadership after the swearing-in.

Obama’s speech, delivered in the same confident oratorical style that has become his trademark since he first emerged into the national spotlight at his keynote speech at the Democratic National Convention in Boston in 2004, was both grim and determined, noting that Washington is not only “at war, against a far-reaching network of violence and hatred,” but also that the U.S. economy is “badly weakened”.

“Less measurable but no less profound is a sapping of confidence across our land – a nagging fear that America’s decline is inevitable, and that the next generation must lower its sights,” he said, adding that the challenges faced by the country are “serious and they are many. They will not be met easily or in a short span of time. But know this, America – they will be met.”

On the economy, Obama indicated he intended to take strong action on the nation’s transportation and communications infrastructure, health care, and alternative energy sources, notably solar, wind, and biofuels, among other areas. In another swipe at Bush, he promised to “restore science to its rightful place”.

“Now, there are some who question the scale of our ambitions – who suggest that our system cannot tolerate too many big plans,” he said. “Their memories are short.”

“What the cynics fail to understand is that the ground has shifted beneath them – that the stale political arguments that have consumed us for so long no longer apply. The question we ask today is not whether our government is too big or too small, but whether it works…”

“Nor is the question before us whether the market is a force for good or ill,” he added. “Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control and that a nation cannot prosper long when it favours only the prosperous.”

Surprisingly, Obama devoted more attention to foreign affairs in a series of implicit rebukes to the unilateralist and militarist tendencies of the Bush administration.

After pledging to uphold the rule of law and human rights while maintaining national security, he pledged to “all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman and child who seeks a future of peace and dignity, and that we are ready to lead once more.”

“Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions,” he went on. “They understood that our power alone cannot protect us, not does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.”

“We are the keepers of this legacy. Guided by these principles once more, we can meet those new threats that demand even greater effort – even greater cooperation and understanding between nations,” he went on, adding, “We will begin to responsibly leave Iraq to its people, and forge a hard-earned peace in Afghanistan.”

“With old friends and former foes, we will tirelessly to lessen the nuclear threat, and roll back the spectre of a warming planet,” he said. At the same time, he added, “We will not apologise for our way of life, nor will we waver in its defence, and for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you.”

Obama stressed that the U.S.’s own “patchwork heritage” was a “strength, not a weakness” and that its own long struggle to eliminate slavery and segregation gave it an optimism “that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve; that as the world grows smaller, our common humanity shall reveal itself; and that America must play its role in ushering in a new era of peace.”

“To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect,” he declared. Obama’s advisers have said he plans to deliver a major address in the capital of a major Islamic nation within the first 100 days of his term.

“To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds,” he went on. “And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside out borders; nor can we consume the world’s resources without regard to effect. For the world has changed, and we must change with it.”

Obama, the nation’s first president of African descent, alluded only once to his own experience – or, more precisely, his Kenyan father’s – when he noted that core U.S. values of “hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism” explained “why men and women and children of every race and every faith can join celebration across this magnificent mall, and why a man whose father less than sixty years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath.”

In the Inaugural’s benediction, civil rights icon Rev. Joseph Lowery also alluded to race when he asked God to “help us work for that day when black will not be asked to get back, when brown can stick around, when yellow will be mellow, when the red man can get ahead, man, and when white will embrace what is right.”

Why not a bailout for the rest of us?

October 1, 2008

What’s really required in this crisis is an entirely different kind of government intervention in the economy.

Quickly organized protests around the U.S. drew opponents of the bailout for Wall Street (Joe Newman)Quickly organized protests around the U.S. drew opponents of the bailout for Wall Street (Joe Newman)

AS THE smoke cleared after Monday’s stunning House of Representatives vote against a $700 billion financial bailout for Wall Street, the politicians immediately got down to the business of blaming each other–and scheming about the next attempt to push through this rescue of the super-rich.

But for working people trying to figure out what the hell has happened to the U.S. financial system–and why the leaders of the U.S. government, apparently regardless of political party, are prepared to spend more than $2,000 for every man, woman and child in this country to save Wall Street–the reaction was different.

For one thing, there was sweet satisfaction to be taken in the fact that the bankers and stockbrokers didn’t get their way for once–especially since they’re out to steal $700 billion in taxpayers’ money to cover their bad investments, under a program devised by former Wall Street CEO and now Treasury Secretary Henry Paulson.

With the business world ratcheting up political pressure and Paulson predicting certain doom if no action was taken, the Bush administration and the leadership of both parties in both the House and Senate were all sure that the bailout bill would go through. Yet the legislation was derailed because members of Congress are feeling the heat from a growing popular outrage over the staggering scale of a giveaway to the very same people who led the economy to the edge of the abyss.

It was an all-too-rare turn of events for the U.S. political system–the opinions of ordinary Americans actually mattered in what happened.

At the same time, though, there’s a sense of foreboding. If the government can’t agree on a bailout, will Wall Street really crash and burn–and cause an economic catastrophe on Main Street, too?

After all, that’s the claim of “King Henry” Paulson and his nominal boss, George W. Bush. They’re basically extortionists, insisting that if Congress doesn’t agree to a king’s ransom for the banks, the economy gets it–in the form of a worldwide financial meltdown that would wipe out workers’ savings and eliminate millions of jobs overnight.

The stock market plunge that followed the House vote Monday will have reinforced such fears. Few workers have the resources to play the stock market, of course, but their lives are affected by its ups and downs, especially the downs–for example, the loss of retirement savings in 401(k) accounts that many workers rely on, now that defined benefit pension plans are going the way of the dinosaur.

So is it true? Are we all–the multi-millionaire bankers on Wall Street and the tens of millions of workers on every other street–in the same boat after all? Do we really need the Paulson bailout to avert a second Great Depression?

The answer is no.

The argument that a bailout of the banks is good of all us is an ideological smokescreen, to cover the specifics of the Paulson proposal, as sanctioned by the Democrats–which benefits the rich and powerful, at the expense of the rest of us.

There are plenty of ways that government intervention could alleviate the financial crisis and provide urgently needed relief to working people. But that would involve programs, policies and priorities that the bankers despise–and that political leaders in Washington want nothing to do with.

Paulson is right to say that Wall Street is facing its most severe crisis since the Great Depression–a catastrophe entirely of its own making–and that the U.S. government has to respond. But the form that response takes–a huge handout for the super-rich or a progressive plan to rein in the banks and help ordinary people–depends on whether workers organize to make their voices heard and felt in Washington.

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