densidad regional

Talking globally, putting the brakes on nationally

tones — Mon, 19 Jul 2010 05:41:51 +0000

Article by Dr. Hermann Scheer published in the German Edition of “Le Monde Diplomatique”, February issue, 2010

The secret motto of the World Climate Conference
The main reason why the public around the world were so shocked by the shameful outcome of the World Climate Conference in Copenhagen was that they were basically unprepared for failure. Everything seemed to be pointing to success: a manifestly pressing problem, upbeat government announcements, urgent appeals from NGOs, worldwide media interest and the participation of numerous heads of state, who hoped to turn the meeting into a “G120″ summit.

But the debacle was really not so surprising. It was not by chance that the World Climate Conference used the same script as the 14 previous events staged since 1995: dramatic “now or never” appeals in the run-up to the conference, a process of small-minded and paralysing haggling producing pitiable results and a decision in favour of a follow-up conference during the event, and in the aftermath, mutual finger-pointing. One exception – albeit only in relative terms – was the Kyoto Protocol of 1997, but even in this case it took a further six climate conferences before it came into force in 2005. Even this agreement, however, was unable to prevent a further increase in greenhouse gas emissions.

It is depressing to take stock of all the UN’s political efforts in the area of climate protection over the last 20 years, that is since the “Our Common Future” Conference in Norway in 1990. Since that time, greenhouse gas emissions have risen by 40 per cent. The painstaking and, in principle, unavoidable process of finding compromise solutions at UN conferences has ended up in compromising international climate policy. Climate diplomacy has turned into a selfreferential system which fails to address the central essential question: will the approaches pursued ever lead to a satisfactory outcome? And can UN world conferences do anything at all about the manifest dangers facing the world?

One month prior to the debacle in Copenhagen, the World Food Summit in Rome also ended in failure despite the fact that the number of starving people in the world has risen from 0.8 to 1.2 billion in the past ten years.

An analysis of the reasons for such a chronic failure is long overdue. In the face of decades of fruitless efforts to enforce global governance standards by means of international agreements, the final declaration from the World Summit on Sustainable Development in Johannesburg in 2002 was already highlighting the danger that people were losing confidence in their governments and regarded them as nothing more than “sounding brass”.
In Copenhagen, even this “sounding brass” was missing. If one is seeking to apportion blame, it is time to examine the very concept of the world climate conference. This is based on two highly dubious premises: firstly, that a global problem requires a global solution in the form of a treaty in which all are subject to relatively equivalent commitments; and secondly, that the necessary climate protection measures are to be regarded as an economic burden, so that there is a need to negotiate a fair distribution of the burden. This boils down to the principle of “all or none”.

In the meantime, nobody can now seriously doubt that there is an urgent need to massively expand and, at the same time, speed up climate protection initiatives. In principle there is little dispute about what the most important steps are: speeding up the mobilization of renewable energies and promoting energy efficiency. There is also agreement on the need to prevent further soil erosion and forest clearance and instead to create new humus potential and carry out largescale reforestation in order to retrieve CO2 from the atmosphere. It is taking too long, however, to achieve a major consensus.

All these measures need to be tackled as swiftly as possible. Attempting to achieve an international consensus on necessary action is, however, the slowest route to decision-making. There is an irreconcilable contradiction between speeding up the process and achieving consensus. That is why climate conferences, rather than furthering climate policy, do more to cripple it. Their secret motto is: “Talk globally, procrastinate nationally.”

The more directly and diversely economic and social structures are affected in individual countries, the more difficult it is to achieve a consensus on a binding international treaty enforced through sanctions. In the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer, which is an example of a successful global climate policy, a straightforward approach was adopted. The Protocol simply banned the use of hydro-chlorofluorocarbons (HCFCs) in refrigeration systems. This applied only to one product component in one branch of industry and did not jeopardise individual companies because all were subject to the same ban. Nevertheless, it still took 10 years for the agreement to become binding.

To negotiate an international treaty on a global regime which impacts on all economic situations and methods of consumption in vastly different ways is an infinitely more complex and controversial process. This is inevitably the case when it comes to the issue of energy which affects industrialised countries, emerging economies and developing countries, energy exporting and importing countries, and regions with highly varied settlement conditions, geographical conditions, economic structures and technological profiles. Appealing to the sense of responsibility and good will of governments cannot make such varied interests disappear.

In short: a substantive treaty imposing the same obligations on all can never come to pass because conditions are unequal. The best that can be hoped for is a consensus on minimum commitments which, in the face of acute climate dangers, will always be set too low. But achieving even this minimum consensus is very difficult, as one world climate conference after another has demonstrated.

The last conference in Copenhagen focused essentially on only one negotiating target which in itself represents a partial surrender in the face of looming catastrophe: limiting greenhouse gas emissions only to the extent that global warming is kept below 2 degrees Celsius above the pre-industrial temperature. Thus a further escalation of climate dangers (from the present atmospheric CO2 level of 385 ppm to 450 ppm) is deemed acceptable.

It may help to use an analogy to highlight this scandal. In 2000, the UN published its Millennium Development Goals which included the target of halving by 2015 the number of starving people in the world from the then level of 800 million.

How would the world have reacted if, instead of this, the UN had announced the goal would be not to allow the number of people starving in the world to grow beyond two billion? Yet it was this kind of cynicism which characterized Copenhagen from the outset, and in the end it proved impossible even to agree on this fatalistic target.

However, the fact that such an unavoidably painstaking search for consensus ended at best with a minimum compromise is not the only problem. From a practical perspective, this is still better than nothing because – in theory – it leaves each country free to exceed the minimum agreed commitment. Where the climate question is concerned, however, even this possibility is prevented by the very instruments set up to guarantee the implementation of the target: emissions trading and the associated cap and trade mechanism. This system allows emissions certificates allocated to every country according to their respective minimum commitments to be internationally traded. Those who emit more greenhouse gases than they are permitted to do, for example, can buy emission rights from those who emit less than their entitlement. This “market-based” approach requires global controls to prevent abuses, but these are hardly workable. What the system amounts to is a zero-sum game in which the total of all global climate gas emissions is the same as the minimum commitment. This minimum therefore in practice becomes a maximum. The concept of the global market in emissions certificates is vaunted as being effective and the only option; in fact, it creates an economic incentive not to exceed this minimum. The absurdity of the cap and trade mechanism is that it hinders any attempt to tackle climate dangers in an effective way. Even if a climate protection treaty were to be successfully negotiated, while it may do a little to slow down the escalation of the climate catastrophe over the coming decades, it would not really stem the tide.

There is a further problem inherent in the market model. Since the prices on the CO2 certificate market fluctuate, there is little certainty in the medium term. This creates an obstacle for many climate protection investments. In order to overcome this drawback, President Sarkozy of France and various economics institutes have proposed that a worldwide flat price be set for emissions certificates. This, however, would do nothing to alter the fact that the total of all climate protection investments does not exceed the minimum commitment. It is clear, therefore, that the international trade in CO2 certificates is not the route to a global climate protection economy but instead is the very reverse of that: a road block.

Only the neoliberal school of thought could come up with the idea of reducing all climate protection initiatives to a global common economic denominator. Such market-fixated thinking systematically cuts out all further factors – development related and ethical factors, for example. Emissions trading reduces the energy problem to the carbon problem as though the current world energy system would be all right without emissions. All other factors pointing to the need for a rapid
change of course towards renewable energies and an increase in energy efficiency are left out of the equation or declared to be of secondary importance.

This applies, for example, to such goals as reducing dependency on depleting and ever more expensive fossil energy resources in good time, preventing hazardous airborne pollutants, or promoting regional economic activity by grasping the opportunity for autonomous energy supply and hence improving productivity through a medium- and long-term plan to secure future energy needs. All these factors highlight the need to work to promote a paradigm shift towards an energy supply reliant on renewable energies and improved energy efficiency, independent of the outcome of climate
protection treaties.

The economic benefits of such a policy shift are plain to see, although they are not the same or simultaneous for all producers and consumers. This is why it is important to create the political framework for incentives which are tailored to the specific needs of individual countries. Such an approach is irreconcilable, however, with a global market model for CO2 certificates.

The great changeover to renewable energies and greater energy efficiency which cannot be put off any longer requires a technological revolution brought about on a deliberate and targeted basis. None of the technological revolutions of the new industrial age were the outcome of an international treaty with fixed worldwide parameters; one only has to think of the ever onward marching IT revolution. The ground for every breakthrough was prepared by pioneers drawing others in their wake.

The problem with the concept underlying current world climate policy is that it attempts quite hopelessly to make everyone move forward at the same pace. Thus absurdly a neoliberal model for CO2 emissions certificates is supposed to operate within the framework of a centrally imposed dirigiste minimum limit. This contradiction is based on the false basic assumption that the energy turnaround has to be regarded as an economic burden, whereas in reality it represents a major opportunity for the global economy.

There is therefore no compelling reason to wait for an international climate protection treaty. The attitude of different governments stems above all from their wish as far as possible to shield the producers of climate-damaging energy in their own countries. It also signals a lack of courage to introduce the structural change associated with an energy turnaround which may compromise the interests of the conventional energy companies. In this case, an international treaty is needed as a decision-making crutch.

If world climate conferences are to achieve anything, they will have to look at other topics, of which there is no shortage.

Why are there no discussions on dismantling trade barriers and introducing uniform industrial standards for the new technologies? Other subjects might include a new fund for relevant investments in developing countries, funded by a global tax on aircraft fuel, or interest-free loans for the energy investments of developing countries, and last but not least, the question of how to effectively and rapidly expand the recently created International Renewable Energy Agency (IRENA).

http://www.monde-diplomatique.de/

RSA Animate – Crises of Capitalism

tones — Sun, 04 Jul 2010 19:00:48 +0000

From Copenhagen to a solution / Desde Copenhague hacia una solución…

tones — Fri, 02 Jul 2010 22:39:31 +0000

From Copenhagen to a solution, “swarming” might save the planet!
New video being launched in London which explains why Copenhagen hadn’t got a chance of presenting a real solution because it touches the infinite growth model of a transnational power base, being anti-consumerism etc. The film then takes a leap into the past presenting what really happened in the 60′s where it says the concept of individualism (cultural changes, sex and drugs and rock and roll) was hijacked by the industry of consumerism to forestall the power of “swarming” which had taught a generation to be anti-consumerist. and we finally are offered some ideas from counter-culture of the Internet and the opensource movement (free software/copyleft etc.) t affect real change in the production systems of the planet using technologies such as Wikipedia Blogging technologies and online activism).

Desde Copenhague hacia una solución…
El debate es útil pero “swarming” (revoloteando) puede salvar el planeta…

Nuevo vídeo que empiece explicando porque no funcionó Copenhague — solución real tocaría el poder de los transnacionales, sería anti-consumo etc. Después pasa hasta la historia por los cambios de las 60′s explicando como la industria del consumo (la publicidad) y el concepto de “swarming” y cambios culturales (sexo/drogas/la música) y finalmente ofrece un idea sobre el uso del Internet / opensource/free software y “swarming” para cambiar la sistema usando principios de (Wikipedia/Tecnologia/Activismo etc)

See the Movie Online: Ver la película online en inglés

No hay subtítulos en ningún lenguaje todavía — ¿alguien quiere ayudar de hacerlo?
Hay que escuchar todo en inglés narración por un Irlandés Mc Namara

Viene de una compañía inglesa Knife Party que trabaja por la industria entonces no es poca cosa, bienvenido al activismo del siglo XXI
made by an english group called Knife Party who work in publicuty industry so this is no amateur production. Welcome to activism of the XXI century

Europe’s Fiscal Dystopia: the “New Austerity” Road

tones — Wed, 30 Jun 2010 16:09:13 +0000

EU Today, US Tomorrow
By MICHAEL HUDSON

Europe is committing fiscal suicide – and will have little trouble finding allies at this weekend’s G-20 meetings in Toronto. Despite the deepening Great Recession threatening to bring on outright depression, European Central Bank (ECB) president Jean-Claude Trichet and prime ministers from Britain’s David Cameron to Greece’s George Papandreou (president of the Socialist International) and Canada’s host, Conservative Premier Stephen Harper, are calling for cutbacks in public spending.

The United States is playing an ambiguous role. The Obama Administration is all for slashing Social Security and pensions, euphemized as “balancing the budget.” Wall Street is demanding “realistic” write-downs of state and local pensions in keeping with the “ability to pay” (that is, to pay without taxing real estate, finance or the upper income brackets). These local pensions have been left unfunded so that communities can cut real estate taxes, enabling site-rental values to be pledged to the banks of interest. Without a debt write-down (by mortgage bankers or bondholders), there is no way that any mathematical model can come up with a means of paying these pensions. To enable workers to live “freely” after their working days are over would require either (1) that bondholders not be paid (“unthinkable”) or (2) that property taxes be raised, forcing even more homes into negative equity and leading to even more walkaways and bank losses on their junk mortgages. Given the fact that the banks are writing national economic policy these days, it doesn’t look good for people expecting a leisure society to materialize any time soon.

The problem for U.S. officials is that Europe’s sudden passion for slashing public pensions and other social spending will shrink European economies, slowing U.S. export growth. U.S. officials are urging Europe not to wage its fiscal war against labor quite yet. Best to coordinate with the United States after a modicum of recovery.

Saturday and Sunday will see the six-month mark in a carefully orchestrated financial war against the “real” economy. The buildup began here in the United States. On February 18, President Obama stacked his White House Deficit Commission (formally the National Commission on Fiscal Responsibility and Reform) with the same brand of neoliberal ideologues who comprised the notorious 1982 Greenspan Commission on Social Security “reform.”

The pro-financial, anti-labor and anti-government restructurings since 1980 have given the word “reform” a bad name. The commission is headed by former Republican Wyoming Senator Alan Simpson (who explained derisively that Social Security is for the “lesser people”) and Clinton neoliberal Erskine Bowles, who led the fight for the Balanced Budget Act of 1997. Also on the committee are bluedog Democrat Max Baucus of Montana (the pro-Wall Street Finance Committee chairman). The result is an Obama anti-change dream: bipartisan advocacy for balanced budgets, which means in practice to stop running budget deficits – the deficits that Keynes explained were necessary to fuel economic recovery by providing liquidity and purchasing power.

A balanced budget in an economic downturn means shrinkage for the private sector. Coming as the Western economies move into a debt deflation, the policy means shrinking markets for goods and services – all to support banking claims on the “real” economy.

The exercise in managing public perceptions to imagine that all this is a good thing was escalated in April with the manufactured Greek crisis. Newspapers throughout the world breathlessly discovered that Greece was not taxing the wealthy classes. They joined in a chorus to demand that workers be taxed more to make up for the tax shift off wealth. It was their version of the Obama Plan (that is, old-time Rubinomics).

On June 3, the World Bank reiterated the New Austerity doctrine, as if it were a new discovery: The way to prosperity is via austerity. “Rich counties can help developing economies grow faster by rapidly cutting government spending or raising taxes.” The New Fiscal Conservatism aims to corral all countries to scale back social spending in order to “stabilize” economies by a balanced budget. This is to be achieved by impoverishing labor, slashing wages, reducing social spending and rolling back the clock to the good old class war as it flourished before the Progressive Era.

The rationale is the discredited “crowding out” theory:

Budget deficits mean more borrowing, which bids up interest rates. Lower interest rates are supposed to help countries – or would, if borrowing was for productive capital formation. But this is not how financial markets operate in today’s world. Lower interest rates simply make it cheaper and easier for corporate raiders or speculators to capitalize a given flow of earnings at a higher multiple, loading the economy down with even more debt!

Alan Greenspan parroted the World Bank announcement almost word for word in a June 18 Wall Street Journal op-ed. Running deficits is supposed to increase interest rates. It looks like the stage is being set for a big interest-rate jump – and corresponding stock and bond market crash as the “suckers’ rally” comes to an abrupt end in months to come.

The idea is to create an artificial financial crisis, to come in and “save” it by imposing on Europe and North America a “Greek-style” cutbacks in social security and pensions. For the United States, state and local pensions in particular are to be cut back by “emergency” measures to “free” government budgets.

All this is an inversion of the social philosophy that most voters hold. This is the political problem inherent in the neoliberal worldview. It is diametrically opposed to the original liberalism of Adam Smith and his successors. The idea of a free market in the 19th century was one free from predatory rentier financial and property claims. Today, an Ayn-Rand-style “free market” is a market free for predators. The world is being treated to a travesty of liberalism and free markets.

This shows the usual ignorance of how interest rates are really set – a blind spot which is a precondition for being approved for the post of central banker these days. Ignored is the fact that central banks determine interest rates by creating credit. Under the ECB rules, central banks cannot do this. Yet that is precisely what central banks were created to do. European governments are obliged to borrow from commercial banks.

This financial stranglehold threatens either to break up Europe or to plunge it into the same kind of poverty that the EU is imposing on the Baltics. Latvia is the prime example. Despite a plunge of over 20 per cent in its GDP, its central bankers are running a budget surplus, in the hope of lowering wage rates. Public-sector wages have been driven down by over 30 per cent, and the government expresses the hope for yet further cuts – spreading to the private sector. Spending on hospitals, ambulance care and schooling has been drastically cut back.

What is missing from this argument? The cost of labor can be lowered by a classical restoration of progressive taxes and a tax shift back onto property – land and rentier income. Instead, the cost of living is to be raised, by shifting the tax burden further onto labor and off real estate and finance. The idea is for the economic surplus to be pledged for debt service.

In England, Ambrose Evans-Pritchard has described a “euro mutiny” against regressive fiscal policy. But it is more than that. Beyond merely shrinking the economy, the neoliberal aim is to change the shape of the trajectory along which Western civilization has been moving for the past two centuries. It is nothing less than to roll back Social Security and pensions for labor, health care, education and other public spending, to dismantle the social welfare state, the Progressive Era and even classical liberalism.

So we are witnessing a policy long in the planning, now being unleashed in a full-court press. The rentier interests, the vested interests that a century of Progressive Era, New Deal and kindred reforms sought to subordinate to the economy at large, are fighting back. And they are in control, with their own representatives in power – ironically, as Social Democrats and Labor party leaders, from President Obama here to President Papandreou in Greece and President Jose Luis Rodriguez Zapatero in Spain.

Having bided their time for the past few years the global predatory class is now making its move to “free” economies from the social philosophy long thought to have been irreversibly built into the economic system: Social Security and old-age pensions so that labor didn’t have to be paid higher wages to save for its own retirement; public education and health care to raise labor productivity; basic infrastructure spending to lower the costs of doing business; anti-monopoly price regulation to prevent prices from rising above the necessary costs of production; and central banking to stabilize economies by monetizing government deficits rather than forcing the economy to rely on commercial bank credit under conditions where property and income are collateralized to pay the interest-bearing debts, culminating in forfeitures as the logical culmination of the Miracle of Compound Interest.

This is the Junk Economics that financial lobbyists are trying to sell to voters: “Prosperity requires austerity.” “An independent central bank is the hallmark of democracy.” “Governments are just like families: they have to balance the budget.” “It is all the result of aging populations, not debt overload.” These are the oxymorons to which the world will be treated during the coming week in Toronto.

It is the rhetoric of fiscal and financial class war. The problem is that there is not enough economic surplus available to pay the financial sector on its bad loans while also paying pensions and social security. Something has to give. The commission is to provide a cover story for a revived Rubinomics, this time aimed not at the former Soviet Union but here at home. Its aim is to scale back Social Security while reviving George Bush’s aborted privatization plan to send FICA paycheck withholding into the stock market – that is, into the hands of money managers to stick into an array of junk financial packages designed to skim off labor’s savings.

So Obama is hypocritical in warning Europe not to go too far too fast to shrink its economy and squeeze out a rising army of the unemployed. His idea at home is to do the same thing. The strategy is to panic voters about the federal debt – panic them enough to oppose spending on the social programs designed to help them. The fiscal crisis is being blamed on demographic mathematics of an aging population – not on the exponentially soaring debt overhead, junk loans and massive financial fraud that the government is bailing out.

What really is causing the financial and fiscal squeeze, of course, is the fact that that government funding is now needed to compensate the financial sector for what promises to be year after year of losses as loans go bad in economies that are all loaned up and sinking into negative equity.

When politicians let the financial sector run the show, their natural preference is to turn the economy into a grab bag. And they usually come out ahead. That’s what the words “foreclosure,” “forfeiture” and “liquidate” mean – along with “sound money,” “business confidence” and the usual consequences, “debt deflation” and “debt peonage.”

Somebody must take a loss on the economy’s bad loans – and bankers want the economy to take the loss, to “save the financial system.” From the financial sector’s vantage point, the economy is to be managed to preserve bank liquidity, rather than the financial system run to serve the economy. Government social spending (on everything apart from bank bailouts and financial subsidies), disposable personal income are to be cut back to keep the debt overhead from being written down. Corporate cash flow is to be used to pay creditors, not employ more labor and make long-term capital investment.

The economy is to be sacrificed to subsidize the fantasy that debts can be paid, if only banks can be “made whole” to begin lending again – that is, to resume loading the economy down with even more debt, causing yet more intrusive debt deflation.

This is not the familiar old 19th-century class war of industrial employers against labor, although that is part of what is happening. It is above all a war of the financial sector against the “real” economy: industry as well as labor.

The underlying reality is indeed that pensions cannot be paid – at least, not paid out of financial gains. For the past fifty years the Western economies have indulged the fantasy of paying retirees out of purely financial gains (M-M’ as Marxists would put it), not out of an expanding economy (M-C-M’, employing labor to produce more output). The myth was that finance would take the form of productive loans to increase capital formation and hiring. The reality is that finance takes the form of debt – and gambling. Its gains were therefore made from the economy at large. They were extractive, not productive. Wealth at the rentier top of the economic pyramid shrank the base below. So something has to give. The question is, what form will the “give” take? And who will do the giving – and be the recipients?

The Greek government has been unwilling to tax the rich. So labor must make up the fiscal gap, by permitting its socialist government to cut back pensions, health care, education and other social spending – all to bail out the financial sector from an exponential growth that is impossible to realize in practice. The economy is being sacrificed to an impossible dream. Yet instead of blaming the problem on the exponential growth in bank claims that cannot be paid, bank lobbyists – and the G-20 politicians dependent on their campaign funding – are promoting the myth that the problem is demographic: an aging population expecting Social Security and employer pensions. Instead of paying these, governments are being told to use their taxing and credit-creating power to bail out the financial sector’s claims for payment.

Latvia has been held out as the poster child for what the EU is recommending for Greece and the other southern EU countries in trouble: Slashing public spending on education and health has reduced public-sector wages by 30 per cent, and they are still falling. Property prices have fallen by 70 percent – and homeowners and their extended family of co-signers are liable for the negative equity, plunging them into a life of debt peonage if they do not take the hint and emigrate.

The bizarre pretense for government budget cutbacks in the face of a post-bubble economic downturn is that the supposed aim is to rebuild “confidence.” It is as if fiscal self-destruction can instill confidence rather than prompting investors to flee the euro. The logic seems to be the familiar old class war, rolling back the clock to the hard-line tax philosophy of a bygone era – rolling back Social Security and public pensions, rolling back public spending on education and other basic needs, and above all, increasing unemployment to drive down wage levels. This was made explicit by Latvia’s central bank – which EU central bankers hold up as a “model” of economic shrinkage for other countries to follow.

It is a self-destructive logic. Exacerbating the economic downturn will reduce tax revenues, making budget deficits even worse in a declining spiral. Latvia’s experience shows that the response to economic shrinkage is emigration of skilled labor and capital flight. Europe’s policy of planned economic shrinkage in fact controverts the prime assumption of political and economic textbooks: the axiom that voters act in their self-interest, and that economies choose to grow, not to destroy themselves. Today, European democracies – and even the Social Democratic, Socialist and labour Parties – are running for office on a fiscal and financial policy platform that opposes the interests of most voters, and even industry.

The explanation, of course, is that today’s economic planning is not being done by elected representatives. Planning authority has been relinquished to the hands of “independent” central banks, which in turn act as the lobbyists for commercial banks selling their product – debt. From the central bank’s vantage point, the “economic problem” is how to keep commercial banks and other financial institutions solvent in a post-bubble economy. How can they get paid for debts that are beyond the ability of many people to pay, in an environment of rising defaults?

The answer is that creditors can get paid only at the economy’s expense. The remaining economic surplus must go to them, not to capital investment, employment or social spending.

This is the problem with the financial view. It is short-term – and predatory. Given a choice between operating the banks to promote the economy, or running the economy to benefit the banks, bankers always will choose the latter alternative. And so will the politicians they support.

Governments need huge sums to bail out the banks from their bad loans. But they cannot borrow more, because of the debt squeeze. So the bad-debt loss must be passed onto labor and industry. The cover story is that government bailouts will permit the banks to start lending again, to reflate the Bubble Economy’s Ponzi-borrowing. But there is already too much negative equity and there is no leeway left to restart the bubble. Economies are all “loaned up.” Real estate rents, corporate cash flow and public taxing power cannot support further borrowing – no matter how wealth the government gives to banks. Asset prices have plunged into negative equity territory. Debt deflation is shrinking markets, corporate profits and cash flow. The Miracle of Compound Interest dynamic has culminated in defaults, reflecting the inability of debtors to sustain the exponential rise in carrying charges that “financial solvency” requires.

If the financial sector can be rescued only by cutting back social spending on Social Security, health care and education, bolstered by more privatization sell-offs, is it worth the price? To sacrifice the economy in this way would violate most peoples’ social values of equity and fairness rooted deep in Enlightenment philosophy.

That is the political problem: How can bankers persuade voters to approve this under a democratic system? It is necessary to orchestrate and manage their perceptions. Their poverty must be portrayed as desirable – as a step toward future prosperity.

A half-century of failed IMF austerity plans imposed on hapless Third World debtors should have dispelled forever the idea that the way to prosperity is via austerity. The ground has been paved for this attitude by a generation of purging the academic curriculum of knowledge that there ever was an alternative economic philosophy to that sponsored by the rentier Counter-Enlightenment. Classical value and price theory reflected John Locke’s labor theory of property: A person’s wealth should be what he or she creates with their own labor and enterprise, not by insider dealing or special privilege.

This is why I say that Europe is dying. If its trajectory is not changed, the EU must succumb to a financial coup d’êtat rolling back the past three centuries of Enlightenment social philosophy. The question is whether a break-up is now the only way to recover its social democratic ideals from the banks that have taken over its central planning organs.

Michael Hudson is a former Wall Street economist and now a Distinguished Research Professor at University of Missouri, Kansas City (UMKC), and president of the Institute for the Study of Long-Term Economic Trends (ISLET). He is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) and Trade, Development and Foreign Debt: A History of Theories of Polarization v. Convergence in the World Economy. He can be reached via his website, mh@michael-hudson.com

South of the Border, Upside Down World Review

tones — Tue, 29 Jun 2010 04:11:54 +0000

Manufacturing Consent Latin America-Style, Click for article reviewing the reviews

South of the Border Posters; Hernan Reig. Click for my review of the film

Quien Dijo Miedo, Katia Lara

tones — Sat, 19 Jun 2010 21:19:03 +0000

Katia Lara lanzando su documental en Buenos Aires

La hondureña y directora de la nueva película documental “Quien Dijo Miedo”, Katia Lara, lanzó su documental en Buenos Aires. Fuimos a comer después del estreno y se ve que su documental es un trabajo de amor por su pueblo y su resistencia al poder golpista. Se estrena la película en España y Centro América y en Tegucigalpa para el primer aniversario del golpe.

Lara y su equipo hondureño-argentino han capturado un momento clave en la historia latinoamericana, la resistencia de un pueblo contra “sus” fuerzas del orden preparadas para la guerra, la resistencia de un pueblo humilde preparándose a si mismo para la democracia –preparándose para tomar control de la trayectoria de su propia historia.

La película de Katia Lara es un grito en contra el doble discurso de la “democracia latinoamericana”, gritándole al mundo pidiendo ser escuchado, pidiendo la solidaridad de los pueblos latinoamericanos como han mostrado los presidentes en UNASUR. El mundo del comercio quiere regresar a “Business as usual” pero la existencia de un gobierno ilegitimo no es solo un riesgo para el pueblo hondureño sino representa un riesgo serio para todos aquellos que tenemos el privilegio de vivir en libertad en américa latina.

Oscar Bayer escribió al respecto: “Honduras, al nombrarla me acuerdo de un film documental que acaba de estrenarse: ¿Quién dijo miedo?. Jamás he visto el protagonismo del pueblo como en esas imágenes. La reacción contra el golpe que sufrió Zelaya por Micheletti y la mentira que significó la “solución democrática de Lobo”.

Cómo lucha ese pueblo, en la calle, en todos lados. Qué presencia tiene la mujer, pese a los balazos, los palos uniformados, la cárcel, el exilio. Escena por escena: los rostros, las voces que no se callan, el combatir con las manos contra las armas represivas importadas del Norte. Una filmación que va a pasar a la historia, que servirá de guía para el futuro. El pueblo no se rinde. Los pueblos no se rinden. Y las cámaras de la indignación están en todos lados, en primera fila, no se pierden ningún detalle, cada rostro queda como documento. La directora de este documento, Katia Lara, hondureña, merece un premio internacional por su valentía, su precisión y su denuncia total. Un testimonio de que, pese a todo, Latinoamérica no se rinde”.

1810 stirrings of independence, 1910 the Belle Époque, 2010 the A.B.C.D. of poverty

tones — Tue, 25 May 2010 15:49:25 +0000

Plastic waiting chairs await me in the spacious immigration offices built for streams of millions of European poor from Italy, Spain and other nations at war. The huddled masses arrived flea-bitten and seasick in their millions in the late 19^th and early 20^th centuries. These fine buildings are reminiscent of the best of British Edwardian and Georgian architecture.

Twice this port town of Buenos Aires repulsed British military invasions, first in 1806 under the Viscount of Beresford, then in 1807 under John Whitelocke. The first invasion was an individual enterprise with no sanction from the crown run out of South Africa with 1,500 men under arms; the second larger invasion of 8,000 men was met by organized resistance. Poor Lord Beresford spent six months in a dingy jail before escaping and John Whitelocke was ostracized as a result of his ignoble defeat at the hands of Santiago de Liniers.

After the second British attack on Montevideo and Buenos Aires the Empire gave up their Colonial ambitions and resorted to do with Argentina what they do best: they enslaved the Argentine nation using the hegemony of the Pound Sterling and loans from private London Banks.

This investment strategy added Argentina to the commercial British Empire, managed by the scurrilous Argentine “families” under the whip of the London banking sector with the ever-present threat of gunboat diplomacy. Argentine lands were to be run for the benefit of the British Crown and the deep pockets of the mercantile food corporations of the British Empire. “The Argentine” played a significant rural role as the grain bank and meat producer of England. Shiploads of food fed many a European war with bully beef and grains.

Fast forward to today’s Bicentenary and Argentine agricultural lands now power German trucks with inefficient “biodiesel” from Soybean oil. Sold to the European governments, soybean oil is another false solution to climate change and “energy security”. Biodiesel is, instead, a product that makes about as much sense as high fructose corn syrup –sugar from corn not cane or beet. It produces an inferior product at a higher cost both in monetary and environmental terms; a ludicrous result of the shady alliances between the global agro-industrial sector and public tax funds from Europe and North America.

The useless Biodiesel industry brings millions from northern taxpayers to the private agro-business sector by means of subsidies, meanwhile converting excellent Argentine land from human food production to pig feed and inefficient fuel –both for export to pay the ever present debt.

Today’s Argentine landowning families have sold or leased more than 50% of this vast nation’s arable land for transgenic Soybean cultivation. The soybeans, mashed into biodiesel and high protein pig-food, produce subsidized inputs for two other useless industrial sectors: inefficient fuel and factory-farmed meat.

Much of what is now Argentina is in fact, a giant land mass of excellent territory sold or rented to the ABCD’s of transgenic human and pig food: A: Archer Daniels Midland (ADM), B: Bunge, C: Cargill and D: Dreyfus. It is an ignominious end for a proud gaucho nation whose economy once produced useful products for themselves and for export, and whose economy in the Belle Époque rivaled that of the US.

Here in Buenos Aires on the 25^th of May 2010, the decaying megacity of about seventeen million souls is ringed by slums of mestizo Argentines, Bolivians, Peruvians and Paraguayans driven off these beautiful lands and into this capital of the new third world. Here the new immigrants sit with me on these same plastic seats in the offices of immigration. Today Argentina celebrates its bicentenary with less independence than ever of its corporate masters. A third military invasion was never necessary. The Argentine class system fuelled by the two-tier dollar and peso economy, was all that was required to drive this export-based economy back into the Third World.

Happy birthday Argentina.

Frente a la tragedia griega: Repensando una propuesta global para un problema global

tones — Wed, 12 May 2010 21:46:32 +0000

Escrito por Oscar Ugarteche y Alberto Acosta

ALAI AMLATINA, 11/05/2010.- A lo largo de la historia financiera internacional se puede observar que los países deudores repetidamente toman créditos, tienen un auge, declinan, cesan los pagos y la vida continúa.

Los casos de las cesaciones de pagos más frecuentes son en aquellas etapas en las que la economía de los países líderes sufre una recesión. Así, por ejemplo, cuando la bolsa de Londres sufrió un desplome en octubre de 1825, se llevó consigo a los precios de las materias primas y acto seguido las nacientes repúblicas sudamericanas y México suspendieron pagos por un periodo de casi treinta años. Durante la década del 70 del siglo XIX igualmente un desplome de la bolsa de Londres se llevó consigo los precios de las materias primas y los países cesaron pagos casi sin excepción por un periodo de casi treinta años igualmente. En el periodo de los años 30 del siglo XX se repitió la misma historia por la misma causa. Los impagos se resolvieron veinte años más tarde a fines de la década del 40 o en los años 50. Nuevamente el problema resurgió en 1982; esta vez no hubo desplome de bolsas pero sí del precio de las materias primas acompañado de un alza brusca de las tasas de interés.

Su explicación radica especialmente en la inestabilidad de la economía internacional que es cíclica y que pasa por alzas y bajas; una situación inherente al capitalismo, por lo demás. En este contexto, los cambios tecnológicos casi siempre han acompañado las soluciones para la recuperación de la economía mundial, favoreciendo a los centros de poder en desmedro del mundo periférico. Y esa fragilidad de la situación internacional eleva el riesgo de crisis en las economías empobrecidas, que viven angustiadas por las presiones financieras.

Esta realidad, tan conocida en el mundo pobre altamente endeudado, golpea ahora las puertas de Europa. Grecia ha entrado en una profunda crisis. Y sus secuelas se expanden cual círculos concéntricos por España, Portugal, Irlanda, Italia… Lo preocupante es que una vez más la receta para enfrentar la crisis es similar a la aplicada en el mundo empobrecido por la lógica especulativa del mercado financiero internacional. La resolución planteada es bajar los salarios que como se ha visto en general pierden permanente su participación en el ingreso nacional a favor de las ganancias financieras.

La receta aplicada en Grecia demuestra que el dogma impulsado a partir del Consenso de Washington sigue vigente e impacta adversamente sobre la Europa comunitaria. El neoliberalismo anglosajón lejos de haber sido extirpado se fortalece bajo la batuta del reactivado FMI. Los grandes ganadores de estas decisiones son los operadores de hedge funds (fondos especulativos de alto riesgo), es decir los especuladores de siempre. Amparo Estrada, en su columna, “El negocio de hundir un país”, relata con detalle una reunión en la firma Monnes, Crespi & Hardt de Nueva York, donde un grupo de banqueros de inversión especializados en hedgefunds decidieron atacar el euro mirando a Grecia. Esto incluye sin duda credit default swaps. Ella cita un texto del Wall Street Journal del 26 de febrero del 2010 como la fuente de dónde sale la información del ataque contra los papeles de deuda griega y de paso contra el euro. En la lista está el inefable Goldman Sachs y el fondo de Soros.

El incentivo perverso que genera las decisiones tomadas para solucionar el problema en Grecia trasladando el problema a su pueblo bajándole los salarios y subiéndoles los impuestos, reduciendo las inversiones sociales, mientras se alimenta y se tolera la irracionalidad de las burbujas financieras. El FMI no dio ninguna señal de problemas en Grecia cuando ya hace más de un año se sabía que los países ricos altamente endeudados estaban en problemas, y los agentes financieros se encargaron de inflar dichas burbujas, y ellos mismos asoman presurosos para salvar a quienes se beneficiaron de la época de auge. A la postre, una vez más, quienes pagan el costo de la codicia de los mercados financieros y del capital, son los trabajadores, los pensionistas, la población en su conjunto.

La tragedia griega, que tanto influyó desde la literatura en la historia de la humanidad, hoy es una amenaza cierta para el mundo entero. Se apaga la esperanza de gran parte de la población mundial que creía que la grave crisis del capitalismo se podía resolver en poco tiempo. Hemos pasado por una crisis financiera, luego por un crédito crunch que frenó el comercio internacional, luego por una recesión derivada de lo anterior, y ahora por una crisis fiscal resultante de la recesión, abriéndose la puerta a una crisis bancaria de nuevo cuño, con fugas de depósitos en los bancos griegos entre otros, lo que regresará como una crisis financiera profundizada. Pero, si bien la crisis angustia, esta deberí¬a ser la oportunidad para regular la economí¬a mundial y al menos poner lí¬mites al capitalismo salvaje. ¡Ya es hora de sacar las lecciones de tanta tragedia!

No puede un grupo de inversionistas enfilar con los bonos de un país y contra una moneda de manera coludida ni menos puede llevarse a un país a la miseria para beneficio de unos cuantos financistas, utilizando las empresas calificadoras de riesgo como el instrumento. Las calificadoras de riesgo son las mismas que aprobaron las hipotecas basura y que luego aprobaron como AAA los bonos de la banca de inversión construidas con esas hipotecas. No es posible que sigan existiendo calificadoras que se deben a sus clientes financiero y no al interés nacional o global, en este caso.

¿Quiebran o no los países?

La gran discusión teórica desde hace más un siglo se erige en torno a la idea central de sí los países quiebran o no. Lo medular de un país que quiebra es que podría ser llevado a una corte de quiebras para ser intervenido por un síndico de quiebras, sus bienes liquidados por el síndico y los acreedores pagados por partes iguales.

Hasta 1933 el tema de quién hacía que las demandas del acreedor fuera cumplida recaía directamente sobre el propio acreedor quien incluso podía hacer uso de la fuerza militar y poner a sus síndicos de quiebras. Estos son los ejemplos de las operaciones bélicas de los acreedores en contra de los deudores por el Canal de Suez a fines del siglo XIX, de Nicaragua en 1909 y de Venezuela en 1902-1903.

En este contexto, las sucesivas moratorias han constituido una suerte de telón de fondo de las relaciones de casi todos los países empobrecidos con el mercado financiero internacional. Sin embargo, nótese que a la moratoria también han recurrido muchos países industrializados en algún momento de su historia. John Maynard Keynes lo recordaba ya en 1924:

“Los incumplimientos por gobiernos extranjeros de su deuda externa son tan numerosos y ciertamente tan cercanos a ser universales que es fácil tratar sobre ellos nombrando a aquellos que no han incurrido en incumplimiento, que aquellos que lo han hecho. Además de aquellos países que incurrieron técnicamente en incumplimiento, existen algunos otros que pidieron prestado en el exterior en su propia moneda y permitieron que esa moneda se depreciara hasta menos de la mitad de su valor nominal y en algunos casos a una fracción infinitesimal. Entre los países que actuaron así cabe citar a Bélgica, Francia, Italia y Alemania”. (1924)

Y en esta lista habría que incluir a varios estados de los propios EEUU, a más de Gran Bretaña.

Por otro lado, a propósito del arreglo de la deuda externa alemana de 1953, con el que este país resolvió definitivamente su problema de deuda externa, queda constancia del trato diferenciado que han recibido algunos países por razones geopolíticas derivadas del enfrentamiento Este-Oeste.

Con el Acuerdo de Londres, suscrito el 27 de febrero de 1953, la República Federal de Alemania pudo resolver definitivamente su problema de deuda externa; es más, se le restituyó la viabilidad financiera y económica, base fundamental para lo que vulgarmente se conoce como “el milagro alemán”. Este país obtuvo un descuento de su deuda anterior -derivada directa o indirectamente de las dos guerras mundiales- de entre 50% hasta 75%, si se considera que se prohibió el anatocismo, o sea el cobro de intereses sobre intereses; una drástica reducción de las tasas de interés, que fueron establecidas entre 0 y 5%; amplios períodos de gracia para iniciar los pagos de intereses y capital de determinadas deudas; la ampliación de los plazos para los pagos previstos; la posibilidad de realizar pagos anticipados en función de su desenvolvimiento económico. La forma de calcular el servicio se estableció a partir de la capacidad de pago de la economía alemana, la cual se vinculó con el avance del proceso de reconstrucción de ese país. El encargado de definir la capacidad de pago de Alemania fue el banquero Hermann J. Abs, quien presidía la delegación alemana en las negociaciones londinenses. En dicho Acuerdo ya se consideró la posibilidad de un sistema de arbitraje, al que, por cierto, nunca fue necesario recurrir dadas las ventajosas condiciones otorgadas.

El servicio de esta deuda, en concreto, estaba supeditado al excedente de exportaciones garantizado por los acreedores; así la relación servicio/exportaciones, que no debía superar el 5%, alcanzó su valor más alto en 1959 con un 4,2%, situación más que envidiable para los países latinoamericanos, que han destinado, por largos años, más del 30% de sus exportaciones al servicio de la deuda pública. Ecuador, para citar un caso puntual, sacrificó en el año 2000 un 42,7% de sus exportaciones por este motivo, mientras que para atender el servicio de la deuda externa total destinó 100,9% de sus exportaciones…

Al igual que Alemania, en 1971, Indonesia, con la coordinación del mismo banquero alemán que dirigió las renegociaciones de la deuda alemana en 1953, se benefició de un acuerdo bastante similar. Pero es importante recordar que, entonces, no se quiso generalizar esta solución a la cual se le dio el carácter de única y que la alternativa brindada a ese país se explicaba por el deseo político de apoyar al gobierno que había “alejado la amenaza comunista”, asesinando a más de medio millón de personas… Tratamientos parecidos se repitieron años después con Polonia, para facilitar su recuperación económica luego de concluido el régimen comunista en los años 80; con Egipto, para asegurar su lealtad durante la gigantesca operación bélica de Washington y sus aliados en contra del Irak en 1991; y, con Pakistán, a fines del año 2001, en medio de la denominada “guerra contra el terrorismo”, cuando se necesitaba su apoyo para bombardear Afganistán…

En los casos mencionados llama la atención la acción de los acreedores, quienes fueron más eficientes en términos económicos y aún más humanos que el Banco Mundial, el FMI o el Club de París en la actualidad. Optaron por encontrar respuestas rápidas y profundas, sin preocuparse -por las presiones geopolíticas del momento- de asumir decisiones que bien pudieron haber servido de base para una nueva arquitectura financiera internacional.

Artículo completo en: http://www.alainet.org/active/38038&lang=es

- Oscar Ugarteche es Economista peruano. Investigador titular del Instituto de Investigaciones Económicas de la UNAM de México. Asesor de la Comisión Investigadora sobre los delitos cometidos en el periodo 1990-2001 en el Congreso de la República del Perú.

- Alberto Acosta es Economista ecuatoriano. Profesor e investigador de la FLACSO (Facultad Latinoamericana de Ciencias Sociales) – Ecuador. Consultor internacional. Ex-ministro de Energía y Minas. Ex-presidente de la Asamblea Constituyente del Ecuador y asambleísta, 2007/2008.

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Walden Bello: China & the US in Climate Change Negociations

tones — Sat, 01 May 2010 21:09:08 +0000

“While the corporations continue to believe in the strength of global supply chains.
Like any chain these are only a strong as their weakest link.”;
Walden Bello (Minute 21 of this video)

Hope from Bolivia on Earth Day

tones — Thu, 22 Apr 2010 15:45:07 +0000

“In Copenhagen, the ALBA countries resisted the imposition of a non-solution. This showed that Latin America was not afraid to speak the truth to power, water is important, food is important, the climate and biodiversity must be protected. These are simple truths that even my grandmothers would understand were they still alive. I am still hopeful in spite of the mining, the oil and gas exploitation and the genetically modified monocultures in the Argentine pampa and the plains of Southern Brazil, Paraguay and Bolivia that South America can show some leadership in protecting Planet Earth.”-Tony Phillips, Project Allende Argentina

For more see http://democracyctr.org/blog/2010/04/climate-change-summit-comes-to-bolivia.html

More information on the conference (WIKI)