Pilkington on Hayek and Neoliberalism.

Radio interview w. Philip Pilkington of Naked Capitalism on Hayek and neoliberalism entitled "Neoliberalism & Hayek's Delusion".

"This week we welcome back Philip Pilkington to the show to talk about his latest writings on the life and times of Friedrich Hayek, the ideologue behind the Neoliberal project. Philip came over to my house this week and we sat about and waxed lyrical on such highfalutin topics as Classical Liberalism, Neoliberalism and Ordoliberalism. We also got around to political propoganda and the Mont Perelin society, the similarities between the far right and Leninism, and how, after Hayek's nefarious influence, our politics has never been the same again"

Nyliberalismens Tre Historiske Faser.

"The history of neoliberalism has at least three distinct phases. The first lasted from the 1920s until about 1950. The term began to acquire meaning in interwar Europe as the Austrian school economists and the German ordoliberals sought to define the contours of a market-based society, which they believed was the best way to organize an economy and guarantee individual liberty. “Neoliberal” was embraced by participants at the famous Colloque Walter Lippmann, organized in Paris in 1938 by the French philosopher Louis Rougier to consider the implications of Walter Lippmann’s book, The Good Society (1937). The term was chosen because it suggested more than a simple return to laissez-faire economics. Instead, neoliberalism would reformulate liberalism to address the concerns of the 1930s. Present, among others, were Hayek, Alexander Rüstow, Wilhelm Röpke, and Mises, as well as the French economist Jacques Rueff and the Hungarian British polymath Michael Polanyi. These men, along with others from Europe and America, would later form the Mont Pelerin Society with Hayek, Röpke, and Albert Hunold in 1947.

The influence of Mont Pelerin liberalism was apparent in Milton Friedman’s essay, “Neo-liberalism and Its Prospects,” published in 1951. Though little noticed and in many ways oddly unrepresentative of his thought, Friedman’s article can be seen in retrospect as an important bridge between the first and second phases of neoliberalism, between the concerns of the predominantly European founding figures, located in Austria, London, Manchester, France, Switzerland, and parts of Germany, and a subsequent generation of thinkers, mainly though by no means all American, located especially in Chicago and Virginia. Of course, the “first Chicago school” of economics, comprising Frank Knight, Jacob Viner, and Henry Simons, played its part in neoliberalism’s formation, but most early neoliberals were preoccupied with European concerns.

The second phase of neoliberalism lasted from 1950 until the free market ascendency of Thatcher and Reagan in the 1980s. At the zenith of New Deal liberalism and British social democracy, when neo-Keynesian approaches to economic policy were at their height, much of this period was a superficially lean time for neoliberals. Outside Germany, they lacked concrete political success in the 1950s and 1960s. Instead, neoliberalism generated intellectual coherence and matured politically. It grew into a recognizable group of ideas, and also into a movement. An increasingly confident group of thinkers, scholars, businessmen, and policy entrepreneurs developed and refined a radical set of free market prescriptions and promoted their agenda. Ironically, it was also in this period that the use of “neoliberal” by its proponents became less common. This was odd at a time when American neoliberal thinkers in particular were defining it ever more precisely in the spheres of industrial organization, monetary policy, and regulation. But this was probably because the term meant little in an American context.

Characteristic of the Chicago approach was the “methodology of positive economics,” out of which emerged Friedman’s revival of monetarism and Stigler’s theory of regulatory capture. This empirical bent was allied to new theories and research endeavors, subsidized by sympathetic business finance and developed in the 1950s and 1960s, about the relatively harmless nature of monopoly and the positive role of large corporations. From the Chicago perspective, the more worrying manifestation of monopoly was trade union power. The Chicago approach marked a sharp contrast, however, with European neoliberalism and even with the adherents’ own departmental forebears, such as Frank Knight, Jacob Viner, and, most important, Henry Simons. German ordoliberals, for example, always took the need for robust antimonopoly policies seriously. In parallel with the technical work of the Chicago economists, Friedman’s polemical arguments, put forward in Capitalism and Freedom (1962)—the “American Road to Serfdom,” as Philip Mirowski and Rob Van Horn have called it—presented the market as the means both to deliver social goods and to deliver the ends, the good life itself.

A third phase of neoliberalism, after 1980, was driven by the advance of an agenda of market liberalization and fiscal discipline into development and trade policy. Neoliberalism broke out of the predominantly North Atlantic and Western European confines of elite academia and domestic national politics and spread into many global institutions, especially in the former communist countries and the developing world. Its principles were adopted by economists and policymakers of the International Monetary Fund (IMF), the World Bank, the World Trade Organization (WTO), the EU, and as part of the North American Free Trade Agreement (NAFTA). The 1980s and 1990s were notable for the notorious “structural adjustment” policies pursued through these institutions and agreements. These were summarized in 1989 by the British economist John Williamson as the now renowned “Washington Consensus” and included tax reform, trade liberalization, privatization, deregulation, and strong property rights. The certainty with which such policies were introduced has been much criticized by economists such as Joseph Stiglitz and Paul Krugman, as well as by uncompromising opponents of capitalism in the antiglobalization movement, which famously erupted at the WTO meetings in Seattle in 1999."

Daniel Steadman Jones, Masters of the Universe: Hayek, Friedman and the Birth of Neoliberal Policies, Princeton University Press (2012).

Staten Skaber Kapitalen.

Enhver systemkritik af kapitalismen, som er andet end blot overfladisk, må tage udgangspunkt i en analyse af hvad der overhovedet muliggør kapitalismen. Kapitalismen opstod ikke i et tomrum, men var fra første færd – og fortsætter med at være – indlejret i statslige strukturer. Det er derfor vigtigt, at man ser på hvilken rolle staten spiller i kapitalismen dvs. på hvordan eksistensen af staten hænger sammen med kapitalismens eksistens.

En bærende søjle i kapitalismen er den (oftest forfatningsbaserede) private ejendomsret. En ejendomsret der ikke blot garanteres juridisk men også fysisk af statens monopol på legal voldsanvendelse. Den private ejendomsret formuleres i moderne tid juridisk i kontekst af borgerskabets revolutioner i Frankrig og De Forenede Stater. I sidstnævnte tilfælde lagde man kimen til kapitalismen ved skabelsen af denne bærende ejendomsretslige søjle, idet ejendomsbesiddende (og ofte slaveholdende) hvide mænd, skabte en forfatning hvori den private ejendomsret indgår som et centralt element.

Ligeledes central er idéen om det frie marked. Det er dog mestendels blevet ved idéen, da markedet som kapitalismen fungerer indenfor, aldrig har været egentlig frit. Det har derimod altid været indlejret i statslige strukturer som gennem lovgivning og voldelige former for magtpraksis har gjort begrænsende indgreb i markedet, ganske ofte til kapitalisternes fordel. Allerede ganske tidligt i De Forenede Staters historie indførte man således protektionistisk lovgivning, idet man allerede under den første amerikanske præsident, George Washington, indførte The Tariff Act (1789), der havde begrænsning af import og således beskyttelse af den hjemlige produktion, som sin underliggende logik.

To af måderne hvorpå staten har virket som støttehjul for kapitalismen er altså protektionisme og den forfatningssikrede ejendomsret. Sådanne ejendomsretslige juridiske tiltag er senere blevet mere mangfoldige, hvorfor vi nu kender til fænomener som intellektuel ejendomret, herunder lovgivning som giver nogle patenter og ophavsret og forbyder andre at krænke disse. Som den amerikanske intellektuelle Kevin Carson så rammende har formuleret det, er staten “jernnæven bag den usynlige hånd.”

I begyndelsen var ejendomsretten noget mere håndgribelig end i retten til idéers tilfælde (læs: intellektuel ejendomsret), idet der typisk var tale om ejerskab af noget langt mere fysisk, nemlig land. I det nordamerikanske tilfælde var der som oftest tale om ejendom man havde fået fingrene i, ved massemorderisk fortrængelse af den indfødte befolkning og/eller gennem slaveriets udbytning af ufrie menneskers arbejdskraft. Den forfatningsgaranterede private ejendomsret var således intet mindre end en legtimering af udplyndring og udbytning, skrevet af tyvene selv. Det er derfor også ganske rammende, at ordet privat - i begrebet privat ejendomsret - har sine sproglige rødder i det latinske ord privare som kan oversættes til berøve.

Også i England spillede staten en central rolle i den centralisering af magt som affødtes af, at nogle gjorde indhug i den nedarvede fælles ejendom (jorden). Mellem 1760 og 1844 vedtog man over 4000 enclosure acts som på mindre end hundrede år forvoldte, at omkring halvfems procent af jorden i England faldt på en lille minoritets hænder. Den arbejdende landbefolkning blev frarøvet muligheden for at operere på de tidligere fællesejede åbne enge, idet disse nu var på private hænder. Dette var blandt hovedårsagerne til, at bønderne fandt sig tvunget til at flytte til byerne for at finde arbejde i fabrikkerne. Statsmagten skabte således det juridiske grundlag for en omfattende berøvelse og udbytning af arbejderklassen, samt grundlaget for industrien, qua den forsyning af arbejdskraft til de kapitalistiske fabrikker, som fulgte i kølvandet på indhegningen og privatiseringen af den fælles ejendom.

I sit essay “English Enclosures and Soviet Collectivization: Two Instances of an Anti-Peasant Mode of Development” beskriver den libertarianske historiker Joseph R. Stromberg hvordan denne legalistiske udplyndring af den fælles ejendom fandt sted:

“The political dominance of large landowners determined the course of enclosure….[I]t was their power in Parliament and as local Justices of the Peace that enabled them to redistribute the land in their own favor.

A typical round of enclosure began when several, or even a single, prominent landholder initiated it … by petition to Parliament.… [T]he commissioners were invariably of the same class and outlook as the major landholders who had petitioned in the first place, [so] it was not surprising that the great landholders awarded themselves the best land and the most of it, thereby making England a classic land of great, well-kept estates with a small marginal peasantry and a large class of rural wage labourers.”

Idéen, at nogen kunne eje jorden på samme måde som man kunne eje en hestesko man selv havde smedet, blev allerede tidligt kritiseret af en af oplysningstidens mest markante intellektuelle. I sin Afhandling om Oprindelsen og Grundlaget for Uligheden Mellem Mænd (Discours sur l'origine et les fondements de l'inégalité parmi les hommes) kaster filosoffen Jean-Jacques Rosseau sig ud i en sønderlemmende kritik af denne idé:

“Den første, der indhegnede et område og fandt på at sige: Dette er mit, og fandt nogen, der var dumme nok til at tro på ham, var den sande grundlægger af det borgerlige samfund. For hvor mange forbrydelser, krige, mord, for hvilke ulykker og rædsler ville ikke den mand have sparet menneskeslægten, som havde fjernet grænsepælene eller fyldt grøften op og råbt til sine fæller: Lyt ikke til denne svindler; I er fortabte, hvis I glemmer, at jordens frugter tilhører alle og jorden ingen.”

I et interview med den amerikanske systemkritiske intellektuelle Derrick Jensen i bogen Resistance Against Empire, forklarer den demokratiske økonomiske teoretiker J. W. Smith, hvori den fortabthed som Rosseau omtaler, består:

“If someone were born into our culture with the fully developed intelligence of an adult, but without our social conditioning, one of the first confusing realities she or he would face is that all of the land belongs to someone else. It’s a crazy situation. Before this person could legally stand, sit, lie down, or sleep, much less gain sustenance, she or he would have to pay whoever owned that piece of land. Now it’s one thing to own something that you’ve built—a chair, perhaps, or a table, or shoes—but land, air, and water are entirely different categories. They nurture life, are necessary to life, and were here before we were born (meaning they’re not our creation). Depriving others—all living beings, not just humans—access to land is to have the ability to kill them.” [min kursivering]

Kapitalister som ønsker staten afskaffet er der ikke mange af. Selv neoliberalister som ønsker et minimum af statslig indblanding i markedets virke ønsker ikke selve staten afskaffet. Årsagen er den simple, at staten også i det neoliberalistiske tilfælde spiller en central rolle. Den britisk-amerikanske marxistiske forfatter David Harvey beskriver statens (begrænsede) rolle i neoliberalismens tidsalder, i sin bog A Brief History of Neoliberalism:

“Neoliberalism is in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices. The state has to guarantee, for example, the quality and integrity of money. It must also set up those military, defence, police, and legal structures and functions required to secure private property rights and to guarantee, by force if need be, the proper functioning of markets. Furthermore, if markets do not exist (in areas such as land, water, education, health care, social security, or environmental pollution) then they must be created, by state action if necessary. But beyond these tasks the state should not venture. State interventions in markets (once created) must be kept to a bare minimum because, according to the theory, the state cannot possibly possess enough information to second-guess market signals (prices) and because powerful interest groups will inevitably distort and bias state interventions(particularly in democracies) for their own benefit.” [min kursivering]

Når staten ofte opfattes som et bolværk imod kapitalismen er årsagen med stor sandsynlighed en manglende forståelse af, at staten, snarere end at forsvare os imod kapitalismen, faktisk er blandt de væsentligste årsager til, at kapitalismen overhovedet har kunnet opstå - og stadig består. Uden den centrale rolle som staten spiller i kapitalismen er det svært at se, hvordan kapitalismen skulle kunne fortsætte med at eksistere som global økonomisk orden. Kampen mod kapitalismen må derfor af nødvendighed også være en kamp imod staten.

Neoliberalismen og illusionen om det frie marked.

Neoliberalismen består af et sæt af økonomiske og politiske tanker som antager, at menneskelig velfærd bedst fordres ved at frigøre den individuelle iværksætterånd indenfor et institutionelt rammeværk kendetegnet ved en stærk ejendomsret og et frit marked. De neoliberale agitatorer for det frie marked fortæller os, at markedet bør frigøres fra alle former for statslig eller interstatslig kontrol, da det sagtens kan regulere sig selv og det vil således frisat fungere bedst muligt og derfor skabe størst mulig rigdom for alle. Staternes primære rolle i den globaliserede kapitalistiske orden er at sikre pengenes integritet og kvalitet og at værne om den private ejendomsret og politivirksomhed og militær infrastruktur er derfor nødvendige.

Disse neoliberale tanker har vundet indpas i store dele af den vestlige verdens politiske og økonomiske eliter, hvilket har udmøntet sig i at kollektiv (dvs. statslig) ejendom mange steder er blevet liberaliseret, mens statslige kontrolfunktioner ift. markedet i stor stil er blevet afskaffet. Problemet er bare, at der gennem det meste af industrialiseringens historie ikke har eksisteret noget egentligt frit marked fuldstændig upåvirket af statslig eller interstatslig indblanding, hvorfor tanken om, at markedet fungerer bedst når det er fuldstændig frit altså ikke kan siges at være historisk begrundet eller empirisk funderet og derfor kan neoliberalismen altså ikke siges at være grundlagt på saglighed, men må snarere betegnes som rendyrket ideologisk.

Tager vi den neoliberale logik ud i dens yderste konsekvens bliver det da også hurtigt klart, at den snarere end at sikre menneskelig velfærd faktisk i stor stil undergraver den. Hvis der ikke må eksister nogen som helst former for statslig eller interstatslig kontrol af markedet, ja så betyder det vel, at enhver skal have lov til at benytte sig af børnearbejde, til at bedrive handel med menneskelige organer og at ingen skal kunne forhindres af stater i eksempelvis at producere kemiske eller biologiske våben og i at sælge dem til hvem man måtte ønske. Det ville jo være ensbetydende med statslig indblanding i det frie markeds virke og dette er iflg. neoliberalisterne ikke til nogens fordel. Jeg indrømmer gerne, at der næppe er mange påståede neoliberale der ønsker dette, hvorfor man da også fristes til at hævde, at de nok ikke har tænkt deres nærmest fundamentalistiske tro på det frigjorte markeds godhed til ende.

Ha-Joon Chang: 23 Things They Don't Tell You About Capitalism.

Professor Ha Joon Chang om Finanskrisens ophav

Der var forleden et interessant interview med den syd-koreansk fødte professor i udviklingsøkonomi v. Cambridge, som jeg fandt oplysende, og derfor linker til.

AMY GOODMAN: Can you explain what are neoliberal policies? And then you can critique them.


HA-JOON CHANG: Yes. Well, basically, the reason why it’s called “neoliberal” is that it’s a successor to nineteenth century classical liberal doctrine. I mean, “liberal” in American usage usually means kind of the left to the center, but in the European usage, “liberal” means basically belief in the free market and private ownership and basically rule of money.


Now, neoliberals have moderated some of the old liberal beliefs. For example, the old liberals actually thought that democracy was bad for capitalism. You know, they thought if you have democracy, poor people vote and create things like income tax, which they have, but, I mean, it actually helped the economy rather than destroyed the economy like the liberals said. So the neoliberals [inaudible] some degree of progressive income tax. The liberals used to be against, for example, having a central bank. The neoliberals actually like the central bank pumping money into the economy when things are going wrong. So it has modified the classical liberal doctrine, but neoliberalism still has, in its core, belief in free market, free trade, deregulated economy and private ownership.


AMY GOODMAN: Do you find it funny that you’re saying—that Gordon Brown is saying what you have been saying for a while—


HA-JOON CHANG: That’s right, yeah.


AMY GOODMAN: —talking about the hypocrisy of the West? But explain what that is, what the US has done or what the West has done with poorer countries when they’re in trouble, and then what we do when we’re in trouble.


HA-JOON CHANG: That’s right, yeah. For example, when the developing countries go into financial crises like the rich countries are experiencing today, they were told by the IMF and the World Bank, and ultimately the rich country governments which control these institutions, that they have to cut spending; ideally, they should run budget surplus. They have to raise interest rate to 30, 50, even 80 percent in some countries. And basically, they have to tighten the belt. Now that the rich countries have the financial crisis, they have cut interest rate to practically zero. You know, I mean, when South Korea had its financial crisis back in 1997, the IMF insisted that the country runs budget surplus equivalent to one percent of GDP. This year in the US alone, budget deficit is estimated to be equivalent to something like 12 percent of GDP.


Now, I mean, how do you explain that? I mean, that these policies are not good enough for you? I mean, “We’ll use one set of policy, which we think are the good ones, but you have to use something else.” You know, the American writer Gore Vidal once upon a time famously said that the American economic system is socialism for the rich and capitalism for the poor, and the international macroeconomic policies have been like that. I mean, it’s what I call monetarism for the poor and Keynesianism for the rich. So when the rich countries have a fall in demand, they think nothing of boosting it up by printing money and increasing government spending; the poor countries shouldn’t do that.


Now, it’s not only the macroeconomic policy where this hypocrisy has a role. For example, the rich countries have been telling the developing countries to adopt free trade and told them, “Look, I mean, all countries in history probably, with the possible exception of Japan, have become richer through free trade. So how do you think that you guys can manage it otherwise?” Well, actually, if you look at the British history, American history, you find that today’s rich countries used protectionism, center, left and right, when they were developing countries. You know, I mean, for about one century, until the Second World War, the United States was actually the most protectionist country in the world. You know, there’s something there when Pat Buchanan said free trade is not free American, because in its 200 years of history, it has practiced free trade only for about fifty years.

http://www.democracynow.org/2009/3/10/economist_ha_joon_chang_on_the

Neoliberalism and Bottom-Line Morality.

From the Reagan era onward I have been impressed with how regularly liberal and left-leaning economists I knew, who went to work in industry and finance, very soon became pro-business, anti-labor, and politically right wing. I think that what got to them was not only the impact of association with businesspeople, but the fact that business profitability became central to their own performance. As business economists, wage increases would seem bad—as encroaching on that profitability and threatening inflation and business growth (and stock prices). Tough environmental rules would also hamper profitability; their relaxation by law or friendly (non-)enforcement would enhance it. It was therefore easy to slide into what we may call "bottom-line morality," with positions on key issues dictated by prospective bottom line effects, but of course rationalized with an ideology that made this all benevolent—in the long run—and made these bottom-line moralists into Good Samaritans as they collected their fat salaries and bonuses while the vast majority waited for trickle-down. (On the fraudulence of this ideology, see David Harvey, A Brief History of Neoliberalism, and Ha-Joon Chang, Bad Samaritans.)

With the steady increase in business's economic and political power over the past 30 years and the parallel decline of organized labor, neoliberal (market-can-do-it-all) ideology has become even more firmly entrenched in establishment thought and practice. The novelist Ayn Rand, most famously the author of Atlas Shrugged, was an extreme proponent of individualist, free enterprise, anti-government ideology, and it is no coincidence that one of her cult admirers and associates, Alan Greenspan, became a leading member of the policy-making elite in the 1980s and into 2006.

Greenspan's "Superlatively Moral System"

Greenspan contributed three chapters to Rand's 1966 book Capitalism: The Unknown Ideal, all of them reflecting her—and Greenspan's—ultra laissez-faire ideology. In one, Greenspan castigates antitrust law and practice as not merely harmful, but with the "hidden intent" of injuring the "productive and efficient members of our society." In another, he claims that all government regulation represented "force and fraud" as the means of consumer protection, whereas it is "profit-seeking which is the unexcelled protector of the consumer." He argues that the market system itself is a "superlatively moral system that the welfare statists propose to improve upon by means of preventive law, snooping bureaucrats, and the chronic goad of fear."

Greenspan contributed to the workings of this "superlatively moral system" at the micro-level back in 1985, writing to the savings and loan authorities on behalf of Charles Keating, head of Lincoln Savings and Loan. In that letter the authorities were urged to exempt Keating from restrictions on risky loans, given his exceptional character and the soundness of his operation, with "no foreseeable risk to the Federal Savings and Loan Corporation." Greenspan was a paid consultant to Lincoln, which failed in 1989 at enormous expense to the FSLIC and taxpayer. Keating ended up in prison. This is the same Charles Keating with whom John McCain had a close relationship and on whose behalf McCain also did some lobbying. Neither Greenspan nor McCain suffered significant damage from this relationship and, despite his extremist ideology, Greenspan became a powerful figure in the U.S. political economy, leading the Fed for many years (1987-2006) and through two major bubbles that he did nothing to constrain.

One important manifestation of Greenspan's world view can be seen in his congressional testimony of July 22, 1997, where he explained that inflation was not increasing despite the lowering unemployment rate because of "a heightened sense of job insecurity," which he described elsewhere as reflecting the "traumatized worker," helpful in keeping wages down. He didn't suggest that job insecurity and the traumatization of workers involved any immoral "goad of fear" or had any negative implications for welfare.

Actually, in this regard Greenspan's view wasn't much different from that of a great many mainstream economists, who were slow to recognize greater job insecurity as a key factor altering the unemployment/inflation relationship, and who were not troubled when they did recognize it. Liberal economist Janet Yellen, co-author with Alan Blinder of a book on the 1990s entitled The Fabulous Decade, told the Federal Reserve Open Market Committee in 1996 that "while the labor market is tight, job insecurity is alive and well. Real wage aspirations seem modest, and the bargaining power of workers is surprisingly low" (quoted in Robert Pollin's Contours of Descent). Robert Pollin points out that Yellen and Blinder didn't let this interfere with their conclusion that the 1990s were "fabulous." Apparently these economists, like Clinton, don't really "feel pain" as long as only workers suffer.

In fact, they are all a throwback to 17th and 18th century mercantilists who, according to historian Edgar S. Furniss, argued that "high wages would prove destructive of national well-being because they would reduce England's competing power by raising production costs. The prevalent doctrine held that wages should be kept at the level of the cost of physical subsistence. Hence the apparent anomaly of the laborer's position: whereas his theoretical social importance was large, his actual economic reward was miserably small.... [Under mercantilism] the dominant class will attempt to bind the burdens upon the shoulders of those groups whose political power is too slight to defend them from exploitation and will find justification for its policies in the plea of national necessity" (Furniss, Position of the Laborer in a System of Nationalism, 1920). Does this ancient view on how burdens should be distributed have some possible application to the bailouts now being put in place to deal with the current financial crisis?

Getting back to Greenspan morality, it is clear from both his Ayn Rand contributions and his writings and public pronouncements of the past 20 years that he views untrammeled capitalism as a "superlatively moral system" not because of businesspeople's benevolence but because market operations in business's self-interest will protect consumers—business will not take on undue risk because that would eventually harm their own welfare. Regulation is thus unnecessary and positively damaging by its arbitrariness and bureaucratic bungling. Greenspan fought long and strenuously for across-the-board deregulation, and against the regulation of derivatives as they grew rapidly in the 1990s, even arguing in 2004 that the innovations like derivatives had contributed to a new stability in the financial system: "Not only have individual financial actors become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient." Such a misunderstanding of reality by a man with great experience and access to the research resources of the Fed can only be understood as a result of the intellectual-ideological bubble within which he worked.

Now that the financial system has collapsed and its leaders have demanded and gotten a huge bailout, what does Greenspan say? Apart from an admitted bafflement, he has stated that business has been too greedy and behaved dishonorably. He is "distressed at how far we [sic] have let concerns for reputation slip in recent years." But this is hogwash. It was rational profit-making that was supposed to control risk, not honorable behavior. Also, if the actual behavior was systemic, and greed can overcome honorable behavior, the Greenspan model has failed on its own terms. But beyond that it was idiotic, as it has long been known that the force of competition, the pressure (and fiduciary obligation) for profits, and regular business myopia in buoyant markets, have repeatedly produced unsustainable excesses. Greenspan's moral model reflects straightforward ideology and bottom line morality. It is also part of a class war perspective where, as noted, labor (and the majority) are viewed in the mercantilist tradition—as a cost to be contained, not as a very large group whose welfare we are trying to maximize. It also helped cause him to misperceive economic reality and make a major and disastrous economic forecasting error.

Greenspan, Rubin, Summers, et al

Both the New York Times and Washington Post had substantial articles on Greenspan's heavy responsibility for the ongoing crisis, in a way beating a dead horse after both papers had treated him with great deference as "the Oracle" for many years (Peter Goodman, "The Reckoning: Taking a Closer Look at a Greenspan Legacy," NYT, Oct. 9, 2008; Anthony Faiola, Ellen Nakashima, and Jill Drew, "What Went Wrong," WP, October 15, 2008). The articles feature the struggle for and against derivatives regulation in the 1990s, with Brooksley E. Born, the head of the Commodity Futures Trading Commission (CFTC) as the pro-regulation protagonist and heroine, and Greenspan as principal villain.

But both articles also call attention to the support given Greenspan in his anti-regulation fight with Born by the leading financial officials of the Clinton administration: Robert Rubin, Larry Summers, and Arthur Levitt, Jr., the first two heading the U.S. Treasury, Levitt the SEC. Rubin looks particularly disingenuous in these articles, claiming to have favored regulating derivatives in 1998, but believing that this was politically unfeasible because of industry opposition and because "there was no potential for mobilizing public opinion." The Times article then paraphrases a former CFTC official that "the political climate would have been different had Mr. Rubin called for regulation."

It should also be recognized that Rubin and Summers are no slouches when it comes to supporting the bailout of fat-cat investors. In his superb book The Global Class War, Jeff Faux features the fact that the corporate establishment which dominates both U.S. political parties is part of the "Party of Davos," that gets together periodically at lush facilities in Davos, Switzerland to party, hob-nob, and plan in the interest of the global business elite. The book focuses heavily on the character and passage of the North American Free Trade Agreement (NAFTA) and then the immediately following Mexican crisis and bailout. NAFTA was a corporate project, strongly opposed by a great majority of Democratic Party voters and by a majority of Democratic legislators. But with Robert Rubin's urging, Clinton put passage of this legislation ahead of health care reform, put a huge political effort into getting it passed, and thereby set the stage for both the failure of health care reform and the Democratic Party's political debacle in 1994. Of course the business community appreciated Clinton's service and here and elsewhere he justified their earlier vetting of his candidacy, organized by Rubin himself.

Rubin had a serious conflict of interest in pushing NAFTA and the subsequent bailout of investors in Mexican securities. He had been a high-ranking official of Goldman Sachs, which did substantial Mexican business, and he had—and even continued to maintain—a number of Mexican clients. NAFTA served only the Party of Davos in the United States and a tiny elite of wealthy people who dominated a famously corrupt political system in Mexico. It was opposed by a U.S. majority and by aware and uncorrupted Mexicans; in Mexico the majority would eventually be seriously damaged by this instrument of the global class war. Its central feature was privileging foreign investors in Mexico, providing also for the gradual elimination of tariffs on agricultural goods and therefore for economic disaster for several million Mexican farmers and their families. (One of Clinton's most notable lies was his claim that NAFTA would serve to slow down Mexican immigration into the United States by spurring investment and development in Mexico.)

The analogy with the current U.S. crisis and bailout is more dramatic when we consider the Mexican crisis of 1994-1995. Shortly after the enactment of NAFTA in 1994, the Mexican government, which for political reasons had tried to peg the peso, suffered a crisis of investor confidence and an unsustainable drain on its foreign reserves. As economist David Felix described it, in the Fall of 1994 "Mexican tesobono holders began cashing in and exiting to dollars [this bond was payable in pesos but with pesos indexed to the dollar], followed belatedly by foreign holders, who were still stuck with $29 billion worth of tesobonos when in December 1994 the Mexican central bank, its dollar reserves nearly exhausted, let the exchange rate float and helplessly watched it sink. The U.S. Treasury and IMF hastily cobbled together a $51 billion bailout fund, and required the Mexican government to use over half to pay off the $29 billion tesobonos with dollars. Since the government's contractual obligation to tesobono holders was merely to pay them more pesos when the peso price of dollars rose, the bailout obligation amounted to a forced ex post rewriting of the contract with tesobono holders to save them from taking a bath" ("Why International Capital Mobility Should be Curbed, and How It Could Be Done," ICTFU, Dec. 2001).

In his chapter "Alan, Larry, and Bob Save the Privileged," Faux describes how in 1994 Greenspan, Summers, and Rubin helped create a climate of fear, telling Congress that "the entire world was now at risk." Governor George W. Bush of Texas was lauded by Rubin for "instinctively grasping what was at stake" and giving public support to the bailout. Rubin even "called Gingrich, who called Greenspan who called Rush Limbaugh to promote the bailout to the rightwing listeners of his radio show." In fact, the sales claims for the bailout were phony and the IMF financial contribution to the bailout was illegal. Mexico didn't suffer any "debt crisis" as it was only obligated to provide pesos, not dollars—the payment of dollars was forced on the Mexican government by U.S. officials, who persuaded the U.S. media that the dollar payments were required by the tesobono contracts. U.S. officials told this lie and required this payment of Mexico, not only to help U.S. investors, but also to dissuade Mexico from resorting to capital controls, which they could have done in accord with IMF rules, but which would have set a pattern in violation of the neoliberal principles being enforced on the Third World by the United States and IMF. Article 6 of the IMF Articles of Agreement not only would have allowed Mexican capital controls, it prohibits IMF emergency funding to facilitate capital flight—violated in this case in accord with U.S. demands and higher neoliberal principles (or rather interests).

Faux points out that the bailout money "was not used to rejuvenate the Mexican economy. It did not underwrite job creation for the unemployed or debt relief for the bankrupted small businesspeople or aid to hospitals and schools that were suddenly broke. It was used to make whole the Wall Street holders of tesobonos, who had originally bought the risky Mexican bonds because Salinas was giving them a high yield." Instead of capital controls Rubin and Summers insisted on budget reductions and "reform" of the Mexican financial system, which was followed by and resulted in the "steepest economic crash since the Great Depression." The Mexican middle class "was decimated" by the forced contraction and Mexican taxpayers eventually being forced to pay the bills for the bailout. Rubin claimed that this was all because "Mexico...had made a serious policy mistake." But Faux points out that "Mexico" didn't do this, but rather Salinas and his successor Zedillo, "both of whom 'Alan, Larry and Bob' had promoted to the American Congress as honest, competent reformers who had to be supported with NAFTA, even if it meant thousands of American losing their jobs."

Faux also points out that as part of NAFTA, and in the wake of the Mexican forced contraction and budget crisis, privatization of Mexican public assets was accelerated, and local oligarchs and foreign banks (and customers of Goldman Sachs) could now buy up assets at bargain prices. So the Party of Davos and its local comprador allies did very well at the same time as ordinary Mexicans were put through the wringer. As Faux says, "The NAFTA financial model—liberalization of trade and finance leading to a speculative bubble, a subsequent crash, and the protection of investors from the consequences of their own actions—was repeated in various forms in the 1990s throughout the global markets in Thailand, Brazil, Bolivia, South Korea, Indonesia, Russia and Argentina."

That was written in 2006. Now that the NAFTA financial model has hit home in the United States itself, we can see how the Party of Davos, with Goldman Sachs once again in the lead, is doing its darndest to continue to socialize risks for investors and pass off costs to ordinary citizens. And with Bob Rubin and Larry Summers waiting in the wings, the Democrats swallowing the latest bailouts, and Wall Street still funding the Party generously, we may have more of the same in a new Democratic administration.

http://zcommunications.org/zmag/viewArticle/19835

Degrowth economics: Why less should be so much more

By Serge Latouche

Last December we published an article about contraction economics - décroissance or ’degrowth’- a topic that has become a major subject of debate, not just within the counter-globalisation movement but in the wider world. The big question is: how should ’degrowth’ apply to the South?

THE logic of advertising so dominates the media that it views anything new - material, cultural or otherwise - as a product launch. And in any product launch, the key word is concept. So as discussion of décroissance (literally "degrowth", that is economic contraction or downscaling) spread, the media naturally started to ask what was the concept. We are sorry to disappoint the media, but degrowth is not a concept. There is no theory of contraction equivalent to the growth theories of economics. Degrowth is just a term created by radical critics of growth theory to free everybody from the economic correctness that prevents us from proposing alternative projects for post-development politics.

In fact degrowth is not a concrete project but a keyword. Society has been locked into thought dominated by progressivist growth economics; the tyranny of these has made imaginative thinking outside the box impossible. The idea of a contraction-based society is just a way to provoke thought about alternatives. To accuse its advocates of only wanting to see economies contract within the existing system rather than proposing an alternative to that system, and to suspect them (as do some counter-globalisation economists) of wanting to prevent the underdeveloped world from resolving its problems reflects at best ignorance and at worst bad faith.

Proponents of contraction want to create integrated, self-sufficient and materially responsible societies in both the North and the South. It might be more accurate and less alarming if we replaced the word degrowth with "non-growth". We could then start talking about "a-growthism", as in "a-theism". After all, rejecting the current economic orthodoxy means abandoning a faith system, a religion. To achieve this, we need doggedly and rigorously to deconstruct the matter of development. The term "development" has been redefined and qualified so much that it has become meaningless. Yet despite its failings, this magical concept continues to command total devotion across the political spectrum. The doctrines of "economism" (1), in which growth is the ultimate good, die hard. Even counter-globalisation economists are in a paradoxical position: they acknowledge the harm that growth has done but continue to speak of enabling Southern countries to benefit from it. In the North the furthest they are prepared to go is to advocate slowing down growth. An increasing number of anti-globalisation activists now concede that growth as we have known it is both unsustainable and harmful, socially as well as ecologically. Yet they have little confidence in degrowth as a guiding principle: the South, deprived of development, cannot be denied at least a period of growth, although it may cause problems.

The result is a stalemate where neither growth nor contraction suit. The proposed compromise of growth slowdown follows the tradition in these debates in that it lets everyone agree on a misunderstanding. Forcing our economies to grow more slowly will never deliver the benefits of a society free from constant growth (that is, being materially responsible, fully integrated and self-sufficient) but it will hurt employment, which has been the one undeniable advantage of rapid, inequitable and environmentally catastrophic expansion. To understand why the creation of a non-growth society is so necessary and so desirable for North and South, we must examine the history of the idea. The proposal for a self-sufficient and materially responsible society is not new; it is part of the tradition of development criticism. For more than 40 years an international group of commentators had analysed economic development in the South and denounced the harm it has done (2). These commentators do not just address recent capitalist or ultra-liberal development: for example, they have considered Houari Boumediene’s Algeria and Julius Nyerere’s Tanzania, which were both officially socialist, participatory, self-reliant and based on popular solidarity. And they have also noted that development has often been carried out or supported by charitable, humanist NGOs. Yet apart from a few scattered success stories, it has been an overwhelming failure. What was supposed to bring contentment to everyone in every aspect of life led only to corruption, confusion and structural adjustment plans that turned poverty into destitution.

Degrowth must apply to the South as much as to the North if there is to be any chance to stop Southern societies from rushing up the blind alley of growth economics. Where there is still time, they should aim not for development but for disentanglement - removing the obstacles that prevent them from developing differently. This does not mean a return to an idealised version of an informal economy - nothing can be expected to change in the South if the North does not adopt some form of economic contraction. As long as hungry Ethiopia and Somalia still have to export feedstuffs destined for pet animals in the North, and the meat we eat is raised on soya from the razed Amazon rainforest, our excessive consumption smothers any chance of real self-sufficiency in the South (3).

If the South is to attempt to create non-growth societies, it must rethink and re-localise. Southern countries need to escape from their economic and cultural dependence on the North and rediscover their own histories - interrupted by colonialism, development and globalisation - to establish distinct indigenous cultural identities. The cultural histories of many societies reveal inherently anti-economistic values. These need to be revived, along with rejected or forgotten products and traditional crafts and skills. Insisting on growth in the South, as though it were the only way out of the misery that growth created, can only lead to further westernisation. Development proposals are often born of genuine goodwill - we want to build schools and health clinics, set up water distribution systems, restore self-sufficiency in food - but they all share the ethnocentrism bound up with the idea of development. Ask the governments of countries what they want, or study surveys of populations duped by the media, and they do not ask for the schools and clinics that western paternalism considers fundamental needs. They want air conditioning, mobile phones, fridges and, above all, cars (Volkswagen and General Motors are planning to start producing 3m vehicles a year in China, and Peugeot is also investing heavily there). For the benefit of their governing elites, we might also add nuclear power stations, fighter jets and tanks to the wish list.

Or we could listen to the exasperated Guatemalan leader cited by Alain Gras (4): "Leave the poor alone and stop going on about development!" All the leaders of popular movements, from Vandana Shiva in India to Emmanuel Ndione in Senegal, say the same thing. Advocates of development may pontificate about the need to restore self-sufficiency in food; but the terms they use prove that there was self-sufficiency and that it has been lost. Africa was self-sufficient in food until the 1960s when the great wave of development began. Imperialism, growth economics and globalisation destroyed that self-sufficiency and make African societies more dependent by the day. Water may not have come out of a tap in the past, but most of it was drinkable until industrial waste arrived to pollute it.

Are schools and clinics really the right ways to achieve and maintain good standards of education and health? The great polemicist and social thinker Ivan Illich (1926-2002) had serious doubts about their effectiveness, even in the North (5). As the Iranian economist Majid Rahnema puts it, "What we call aid money serves only to strengthen the structures that generate poverty. Aid money never reaches those victims who, having lost their real assets, look for alternative ways of life outside the globalised system of production which are better suited to their needs" (6).

There is no prospect of just returning to the old ways - no more than there is a universal model of progress on contraction or non-growth lines. Those millions for whom development has meant only poverty and exclusion are left with a weak mixture of lost tradition and unaffordable modernity, a paradox that sums up the double challenge that they face. But we should not underestimate the strength of our social and cultural achievements: once human creativity and ingenuity have been freed from the bonds of economism and development-mania, there is every reason to believe that they can tackle the task.

Different societies have different views of the shared basic aim of a good life. If we must give it a name, it could beumran (thriving or flourishing), as used by the Arab historian and philosopher Ibn Kaldûn (1332-1406); Gandhi’s swadeshi-sarvodaya (self-sufficiency and welfare); bamtaare (shared well-being) in the language of the West African Toucouleurs; or fidnaa/gabbina (the shine of someone who is well-fed and free of all worry) in the vocabulary of Ethiopia’s Borana people (7). What really matters is that we reject continuing destruction in the name of development. The fresh and original alternatives springing up point the way towards a successful post-development society.

However, neither North nor South will overcome their addiction to growth without a collective and comprehensive detoxification programme. The growth doctrine is like a disease and a drug. As Rahnema says, Homo economicus had two strategies for taking over virgin territories: one operated like HIV, the other like a drug pusher (8). Growth economics, like HIV, destroys societies’ immune systems against social ills. And growth needs a constant supply of new markets to survive so, like a drug dealer, it deliberately creates needs and dependencies that did not exist before. The fact that the dealers in the supply chain, mainly transnational corporations, benefit so much from our addiction will make it difficult to overcome. But our ever-increasing consumption is not sustainable; sooner or later we will have to give it up.

Deregulering af banksektoren

Franklin Delano Roosevelt sagde i sin tiltrædelsestale d.4. maj 1933:

First of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror, which paralyzes needed efforts to convert retreat into advance. […]

We face our common difficulties. They concern, thank God, only material things. […] The withered leaves of industrial enterprise lie on every side. Farmers find no markets for their produce. And the savings of many years in thousands of families are gone. More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment. […]

Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men. […]

Yes, the money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. […]

This nation is asking for action, and action now. […]

There must be a strict supervision of all banking and credits and investments. There must be an end to speculation with other people’s money. And there must be provision for an adequate but sound currency.

These, my friends, are the lines of attack. I shall presently urge upon a new Congress in special session detailed measures for their fulfillment, and I shall seek the immediate assistance of the forty-eight states.

How deregulation created the world's financial powerhouse

DAVID BUIK

In the early 1960s, there were just 400 stockbrokers and a handful of jobbers with Wedd Durlacher and Ackroyd & Smithers trading stocks and shares on a gentlemanly basis on the floor of the Stock Exchange in Threadneedle Street.

But this world was about to change. Banks from the US, Europe and Japan opened branches in their droves in the 1970s, and activity increased when exchange controls were abolished in 1980. The Thatcher government was determined to break down as many trade barriers as possible with a view to stimulating an economy that had been ravaged by inflation under the Wilson and Callaghan administrations.

By the mid-1980s there were more than 300 trading banks in London. Privatisations were lucrative for merchant banks, and adding buoyant insurance, shipping and commodity markets to the equation made London a boom town.

In 1986, Big Bang, the Conservatives' deregulation of the stock market, changed the City for ever. Intended to develop a competitive finance centre by breaking the old boys' network and introducing the principles of the free market, it succeeded in creating arguably the world's most important banking hub. Price cartels became unacceptable and a code of conduct - draconian by previous standards - was introduced.

The Serious Fraud Office made sure the code was implemented by bringing Ernest Saunders, Gerald Ronson, Anthony Parnes and Jack Lyons to book over the Guinness affair. Suddenly, the US investment banks ruled a market-making society by openly challenging the established UK banks, making acquisitions in areas and products that had previously been denied them.

Within three years there were far fewer trading establishments, replaced instead by larger conglomerates. The only UK successes of Big Bang were Warburg, which bought Mullens, Rowe & Pitman and Ackroyd, and to a lesser extent Barclays, which acquired Wedd and de Zoete & Bevan.

Cazenove, Schroders and NM Rothschild sought, correctly, independence. It was the big foreign banks that started to dominate proceedings. The City of London was bulging with new office premises. Technology took hold and London's Stock Exchange went screen-based.

The unlisted securities market was dispensed and the alternative investment market came a decade later. The advent of trading financial futures at Liffe, which opened its doors at the Royal Exchange in 1982, triggered the explosion of the most sophisticated derivative markets in the world. Suddenly, there wasn't enough room in the City.

In the past decade, as technology has improved, Canary Wharf has become home to many banks, while fund managers and hedge fund managers have moved to the West End. Their pre-eminence since the Iraq war has seen them seek out prestigious premises more becoming of their place in financial society.

David Buik is a money manager with BGC Partners

Mere om deregulering i The Guardian.

”Beginning in the 1980s or earlier, the US banking sector lobbied Washington to repeal the Glass-Steagall Act, a statute that had been on the books since the 1930s. Glass-Steagall was part of a package of banking reforms put in place by president Franklin D Roosevelt to restore trust in the banking system.

After the Great Crash of 1929, Wall Street was vilified for misleading the masses. Congress introduced legislation that diluted the power of big financial institutions, splitting up commercial and investment banking into separate functions. According to the act, commercial banks were not allowed to use depositors' money to finance profit-making investments other than loans.
But the US banking sector argued that Glass-Steagall was hampering its ability to compete with rivals in Europe and Asia, which were increasing in size through a series of mergers. US banks put pressure on Congress to deregulate so they could use complex financial instruments that held out the promise of higher financial rewards.
The other argument for deregulation was that customers would be able to buy financial products from one company. This one-stop shop, the banks argued, would allow them to make more money by cross-selling their products to customers. While banking lobbyists piled on the pressure in the corridors of Congress, the US banking sector created facts on the ground.

When Citibank completed its merger with Travelers in October 1998, the deal drove a coach and horses through Glass-Steagall. One year later, banking's equivalent of the Wall of Jericho came crashing down. In 1999, Glass-Steagall was repealed, together with the bank holding company, a mechanism that was introduced in 1956 and provided the basis for modern US banking.

Glass-Steagall was replaced under the Clinton administration by the Gramm-Leach Financial Modernisation Act. This blurred the lines between the commercial banks that made their money through loans, and the more risky ventures of investment banks. The new bill ended the rules that limited the ability of banks to underwrite securities, which prevented them from engaging in new lines of business such as insurance.

As Robert Kuttner, an economics expert, testified before Congress last year:
"Since repeal of Glass Steagall in 1999, after more than a decade of de facto inroads, super-banks have been able to re-enact the same kinds of structural conflicts of interest that were endemic in the 1920s — lending to speculators, packaging and securitising credits and then selling them off, wholesale or retail, and extracting fees at every step along the way. And much of this paper is even more opaque to bank examiners than its counterparts were in the 1920s."
The repeal of Glass-Steagall coincided with low interest rates that put pressure on financial institutions to seek higher returns through more arcane financial instruments. Wall Street investment banks, with their appetite for risk, led the charge.

Bear Stearns and Lehman Brothers became heavily involved in property, underwriting billions in mortgage-backed securities and investing in commercial property. Bear Stearns had the fortune to be rescued by JP Morgan from its ill-fated foray into the sub-prime market.

Not so Lehman. In the UK, Northern Rock came a cropper by borrowing money to fund its loans and mortgages. When borrowing dried up because of the credit crunch, the Rock had to be bailed out by the Bank of England.
US banks — particularly investment banks — are in difficulty because they were granted what they wished for. Left to their own devices, several have managed to ruin themselves and create havoc in the international financial system. Wall Street bankers may be wishing that regulators had kept them on a tighter leash, not least because fewer of them would be out of a job today.”

http://www.guardian.co.uk/business/2008/sep/15/lehmanbrothers.marketturmoil1

Glass Steagal Act

Gramm-Leach-Bliley Act

Hele den omtalte økonom Robert Kuttner's testimony ved kongressen kan læse her.

Amerikansk Militærbase-imperialisme.

737 U.S. Military Bases = Global Empire

By Chalmers Johnson

The following is excerpted from Chalmers Johnson's new book, "NEMESIS: The Last Days of the American Republic " (Metropolitan Books).

Once upon a time, you could trace the spread of imperialism by counting up colonies. America's version of the colony is the military base; and by following the changing politics of global basing, one can learn much about our ever more all-encompassing imperial "footprint" and the militarism that grows with it.

It is not easy, however, to assess the size or exact value of our empire of bases. Official records available to the public on these subjects are misleading, although instructive. According to the Defense Department's annual inventories from 2002 to 2005 of real property it owns around the world, the Base Structure Report, there has been an immense churning in the numbers of installations.

The total of America's military bases in other people's countries in 2005, according to official sources, was 737. Reflecting massive deployments to Iraq and the pursuit of President Bush's strategy of preemptive war, the trend line for numbers of overseas bases continues to go up.

Interestingly enough, the thirty-eight large and medium-sized American facilities spread around the globe in 2005 -- mostly air and naval bases for our bombers and fleets -- almost exactly equals Britain's thirty-six naval bases and army garrisons at its imperial zenith in 1898. The Roman Empire at its height in 117 AD required thirty-seven major bases to police its realm from Britannia to Egypt, from Hispania to Armenia. Perhaps the optimum number of major citadels and fortresses for an imperialist aspiring to dominate the world is somewhere between thirty-five and forty.

Using data from fiscal year 2005, the Pentagon bureaucrats calculated that its overseas bases were worth at least $127 billion -- surely far too low a figure but still larger than the gross domestic products of most countries -- and an estimated $658.1 billion for all of them, foreign and domestic (a base's "worth" is based on a Department of Defense estimate of what it would cost to replace it). During fiscal 2005, the military high command deployed to our overseas bases some 196,975 uniformed personnel as well as an equal number of dependents and Department of Defense civilian officials, and employed an additional 81,425 locally hired foreigners.

The worldwide total of U.S. military personnel in 2005, including those based domestically, was 1,840,062 supported by an additional 473,306 Defense Department civil service employees and 203,328 local hires. Its overseas bases, according to the Pentagon, contained 32,327 barracks, hangars, hospitals, and other buildings, which it owns, and 16,527 more that it leased. The size of these holdings was recorded in the inventory as covering 687,347 acres overseas and 29,819,492 acres worldwide, making the Pentagon easily one of the world's largest landlords.

These numbers, although staggeringly big, do not begin to cover all the actual bases we occupy globally. The 2005 Base Structure Report fails, for instance, to mention any garrisons in Kosovo (or Serbia, of which Kosovo is still officially a province) -- even though it is the site of the huge Camp Bondsteel built in 1999 and maintained ever since by the KBR corporation (formerly known as Kellogg Brown & Root), a subsidiary of the Halliburton Corporation of Houston.

The report similarly omits bases in Afghanistan, Iraq (106 garrisons as of May 2005), Israel, Kyrgyzstan, Qatar, and Uzbekistan, even though the U.S. military has established colossal base structures in the Persian Gulf and Central Asian areas since 9/11. By way of excuse, a note in the preface says that "facilities provided by other nations at foreign locations" are not included, although this is not strictly true. The report does include twenty sites in Turkey, all owned by the Turkish government and used jointly with the Americans. The Pentagon continues to omit from its accounts most of the $5 billion worth of military and espionage installations in Britain, which have long been conveniently disguised as Royal Air Force bases. If there were an honest count, the actual size of our military empire would probably top 1,000 different bases overseas, but no one -- possibly not even the Pentagon -- knows the exact number for sure.

In some cases, foreign countries themselves have tried to keep their U.S. bases secret, fearing embarrassment if their collusion with American imperialism were revealed. In other instances, the Pentagon seems to want to play down the building of facilities aimed at dominating energy sources, or, in a related situation, retaining a network of bases that would keep Iraq under our hegemony regardless of the wishes of any future Iraqi government. The U.S. government tries not to divulge any information about the bases we use to eavesdrop on global communications, or our nuclear deployments, which, as William Arkin, an authority on the subject, writes, "[have] violated its treaty obligations. The U.S. was lying to many of its closest allies, even in NATO, about its nuclear designs. Tens of thousands of nuclear weapons, hundreds of bases, and dozens of ships and submarines existed in a special secret world of their own with no rational military or even 'deterrence' justification."

In Jordan, to take but one example, we have secretly deployed up to five thousand troops in bases on the Iraqi and Syrian borders. (Jordan has also cooperated with the CIA in torturing prisoners we deliver to them for "interrogation.") Nonetheless, Jordan continues to stress that it has no special arrangements with the United States, no bases, and no American military presence.

The country is formally sovereign but actually a satellite of the United States and has been so for at least the past ten years. Similarly, before our withdrawal from Saudi Arabia in 2003, we habitually denied that we maintained a fleet of enormous and easily observed B-52 bombers in Jeddah because that was what the Saudi government demanded. So long as military bureaucrats can continue to enforce a culture of secrecy to protect themselves, no one will know the true size of our baseworld, least of all the elected representatives of the American people.

In 2005, deployments at home and abroad were in a state of considerable flux. This was said to be caused both by a long overdue change in the strategy for maintaining our global dominance and by the closing of surplus bases at home. In reality, many of the changes seemed to be determined largely by the Bush administration's urge to punish nations and domestic states that had not supported its efforts in Iraq and to reward those that had. Thus, within the United States, bases were being relocated to the South, to states with cultures, as the Christian Science Monitor put it, "more tied to martial traditions" than the Northeast, the northern Middle West, or the Pacific Coast. According to a North Carolina businessman gloating over his new customers, "The military is going where it is wanted and valued most."

In part, the realignment revolved around the Pentagon's decision to bring home by 2007 or 2008 two army divisions from Germany -- the First Armored Division and the First Infantry Division -- and one brigade (3,500 men) of the Second Infantry Division from South Korea (which, in 2005, was officially rehoused at Fort Carson, Colorado). So long as the Iraq insurgency continues, the forces involved are mostly overseas and the facilities at home are not ready for them (nor is there enough money budgeted to get them ready).

Nonetheless, sooner or later, up to 70,000 troops and 100,000 family members will have to be accommodated within the United States. The attendant 2005 "base closings" in the United States are actually a base consolidation and enlargement program with tremendous infusions of money and customers going to a few selected hub areas. At the same time, what sounds like a retrenchment in the empire abroad is really proving to be an exponential growth in new types of bases -- without dependents and the amenities they would require -- in very remote areas where the U.S. military has never been before.

After the collapse of the Soviet Union in 1991, it was obvious to anyone who thought about it that the huge concentrations of American military might in Germany, Italy, Japan, and South Korea were no longer needed to meet possible military threats. There were not going to be future wars with the Soviet Union or any country connected to any of those places.

In 1991, the first Bush administration should have begun decommissioning or redeploying redundant forces; and, in fact, the Clinton administration did close some bases in Germany, such as those protecting the Fulda Gap, once envisioned as the likeliest route for a Soviet invasion of Western Europe. But nothing was really done in those years to plan for the strategic repositioning of the American military outside the United States.

By the end of the 1990s, the neoconservatives were developing their grandiose theories to promote overt imperialism by the "lone superpower" -- including preventive and preemptive unilateral military action, spreading democracy abroad at the point of a gun, obstructing the rise of any "near-peer" country or bloc of countries that might challenge U.S. military supremacy, and a vision of a "democratic" Middle East that would supply us with all the oil we wanted. A component of their grand design was a redeployment and streamlining of the military. The initial rationale was for a program of transformation that would turn the armed forces into a lighter, more agile, more high-tech military, which, it was imagined, would free up funds that could be invested in imperial policing.

What came to be known as "defense transformation" first began to be publicly bandied about during the 2000 presidential election campaign. Then 9/11 and the wars in Afghanistan and Iraq intervened. In August 2002, when the whole neocon program began to be put into action, it centered above all on a quick, easy war to incorporate Iraq into the empire. By this time, civilian leaders in the Pentagon had become dangerously overconfident because of what they perceived as America's military brilliance and invincibility as demonstrated in its 2001 campaign against the Taliban and al-Qaeda -- a strategy that involved reigniting the Afghan civil war through huge payoffs to Afghanistan's Northern Alliance warlords and the massive use of American airpower to support their advance on Kabul.

In August 2002, Secretary of Defense Donald Rumsfeld unveiled his "1-4-2-1 defense strategy" to replace the Clinton era's plan for having a military capable of fighting two wars -- in the Middle East and Northeast Asia -- simultaneously. Now, war planners were to prepare to defend the United States while building and assembling forces capable of "deterring aggression and coercion" in four "critical regions": Europe, Northeast Asia (South Korea and Japan), East Asia (the Taiwan Strait), and the Middle East, be able to defeat aggression in two of these regions simultaneously, and "win decisively" (in the sense of "regime change" and occupation) in one of those conflicts "at a time and place of our choosing."As the military analyst William M. Arkin commented, "[With] American military forces ... already stretched to the limit, the new strategy goes far beyond preparing for reactive contingencies and reads more like a plan for picking fights in new parts of the world."

A seemingly easy three-week victory over Saddam Hussein's forces in the spring of 2003 only reconfirmed these plans. The U.S. military was now thought to be so magnificent that it could accomplish any task assigned to it. The collapse of the Baathist regime in Baghdad also emboldened Secretary of Defense Rumsfeld to use "transformation" to penalize nations that had been, at best, lukewarm about America's unilateralism -- Germany, Saudi Arabia, South Korea, and Turkey -- and to reward those whose leaders had welcomed Operation Iraqi Freedom, including such old allies as Japan and Italy but also former communist countries such as Poland, Romania, and Bulgaria. The result was the Department of Defense's Integrated Global Presence and Basing Strategy, known informally as the "Global Posture Review."

President Bush first mentioned it in a statement on November 21, 2003, in which he pledged to "realign the global posture" of the United States. He reiterated the phrase and elaborated on it on August 16, 2004, in a speech to the annual convention of the Veterans of Foreign Wars in Cincinnati. Because Bush's Cincinnati address was part of the 2004 presidential election campaign, his comments were not taken very seriously at the time. While he did say that the United States would reduce its troop strength in Europe and Asia by 60,000 to 70,000, he assured his listeners that this would take a decade to accomplish -- well beyond his term in office -- and made a series of promises that sounded more like a reenlistment pitch than a statement of strategy.

"Over the coming decade, we'll deploy a more agile and more flexible force, which means that more of our troops will be stationed and deployed from here at home. We'll move some of our troops and capabilities to new locations, so they can surge quickly to deal with unexpected threats. ... It will reduce the stress on our troops and our military families. ... See, our service members will have more time on the home front, and more predictability and fewer moves over a career. Our military spouses will have fewer job changes, greater stability, more time for their kids and to spend with their families at home."

On September 23, 2004, however, Secretary Rumsfeld disclosed the first concrete details of the plan to the Senate Armed Services Committee. With characteristic grandiosity, he described it as "the biggest re-structuring of America's global forces since 1945." Quoting then undersecretary Douglas Feith, he added, "During the Cold War we had a strong sense that we knew where the major risks and fights were going to be, so we could deploy people right there. We're operating now [with] an entirely different concept. We need to be able to do [the] whole range of military operations, from combat to peacekeeping, anywhere in the world pretty quickly."

Though this may sound plausible enough, in basing terms it opens up a vast landscape of diplomatic and bureaucratic minefields that Rumsfeld's militarists surely underestimated. In order to expand into new areas, the Departments of State and Defense must negotiate with the host countries such things as Status of Forces Agreements, or SOFAs, which are discussed in detail in the next chapter. In addition, they must conclude many other required protocols, such as access rights for our aircraft and ships into foreign territory and airspace, and Article 98 Agreements. The latter refer to article 98 of the International Criminal Court's Rome Statute, which allows countries to exempt U.S. citizens on their territory from the ICC's jurisdiction.

Such immunity agreements were congressionally mandated by the American Service-Members' Protection Act of 2002, even though the European Union holds that they are illegal. Still other necessary accords are acquisitions and cross-servicing agreements or ACSAs, which concern the supply and storage of jet fuel, ammunition, and so forth; terms of leases on real property; levels of bilateral political and economic aid to the United States (so-called host-nation support); training and exercise arrangements (Are night landings allowed? Live firing drills?); and environmental pollution liabilities.

When the United States is not present in a country as its conqueror or military savior, as it was in Germany, Japan, and Italy after World War II and in South Korea after the 1953 Korean War armistice, it is much more difficult to secure the kinds of agreements that allow the Pentagon to do anything it wants and that cause a host nation to pick up a large part of the costs of doing so. When not based on conquest, the structure of the American empire of bases comes to look exceedingly fragile.

An Internet Guide to United States Military Bases Around the World

Challenges to the Empire.

Thank God for Capitalism

De 2000 største virksomheder havde iflg. en beregning publiceret af Forbes Magazine i Februar, samlet set, $30 billioner i indtægter, $2,4 billioner i profitter, $119 billioner i aktiver og $39 billioner i markedsværdi. På verdensplan har disse 2000 firmaer 72 millioner ansatte hvilket udgør 1,07 % af jordens samlede befolkning.

En anden beregning ligeledes foretaget af Forbes Magazine i år estimerer, at der nu er 1,125 milliardærer på verdensplan. De 42% af disse bor i USA og ejer tilsammen 37% af den totale rigdom. Verdens milliardærer ejer tilsammen $4.4 billioner dollars, hvilket er 900 milliarder mere end sidste år. Disse 1,125 milliardærer udgør oprundet 0.000017 % af jordens samlede befolkning.

Mindst halvdelen af verdens befolkning lever for under $2.5 om dagen,

Mindst 80% af verdens befolkning lever af mindre end $10 om dagen.

Mindst 80% af verdens befolkning lever i lande hvor indkomstforskellene er stigende.

Antallet af børn i verden: 2,2 milliard.

Antallat af børn der lever i fattigdom: 1 milliard.

Kilde: http://www.globalissues.org/article/26/poverty-facts-and-stats

24.5 percent of all Americans earn poverty wages ($9.60 or less)

10 percent of all Americans—15 million Americans—earn $6.79 or less

33.3 percent of African American works and 39.3 of Hispanic workers earn poverty wages.

The share of our entire national income hoarded by the top one percent is, as of 2005, 21.8 percent. The last time it was that high was in 1928 (23.9)—just as the Great Depression was about to hit with its full fury.

We accept poverty as a fact of life in this country—partly because workers have not gotten the fair share of their hard work over the past three decades (in Republican and Democratic Administrations). If productivity and wages had kept their historic link (meaning, as workers were more productive, that translated into higher paychecks), the MINIMUM WAGE in the country would be $19.12. Yes, $19.12.

At the recent new minimum wage of $6.55 an hour, if you worked every single day, 40 hours a week, with no vacations, no holidays, no health care and no pension, you would earn the grand sum of $13.624. The POVERTY LEVEL for a family of three is $17,600.

47 million Americans have no health care and tens of millions more have inadequate or costly health care that can bankrupt them.

Since 1978, the number of defined-benefit plans—that means, pensions that give retirees a promised monthly amount—plummeted from 128,041 plans covering some 41 percent of private-sector workers to only 26,000 today. It’s a Dog Food Retirement future for millions of people.

All those numbers above do relate to the more narrow crisis in a very specific way: without being able to rely on their paychecks to survive, a lot of people got sucked into the housing bubble mania as an economic coping mechanism. Home equity credit lines substituted for decent pay, retirement and affordable, quality health care. And we know the rest.

http://www.workinglife.org/blogs/view_post.php?content_id=9646

The New York Times February 2, 2005
Study Ties Bankruptcy to Medical Bills
By REED ABELSON

Sometimes, all it takes is one bad fall for a working person with health insurance to be pushed into bankruptcy.

Hundreds of thousands of Americans file for personal bankruptcy each year because of medical bills - even though they have health insurance, according to a new study by Harvard University legal and medical researchers.

"It doesn't take a medical catastrophe to create a financial catastrophe," said Elizabeth Warren, a Harvard law professor who studies bankruptcy and is one of the authors of the study.

The study, which is scheduled to appear today on the Web site of Health Affairs, an academic journal, provides a glimpse into a little-researched area connecting bankruptcy and medical costs. About 30 percent of people said they filed for bankruptcy because of an illness or injury, even though most of them had health insurance when they first got sick.

Many lost their jobs - and their insurance - because they got sick, while others faced thousands of dollars in co-payments and deductibles and for services not covered by their insurance.

One person cited in the bankruptcy study, for example, broke a leg, missed a couple of months of work and then had $13,000 in unpaid medical bills, though his employer-based health plan had already paid for much of his care, Ms. Warren said.

Another respondent to the survey was able to pay for hospital stays for lung surgery and a heart attack but could not return to his old job. When he found a new job, he was denied coverage because of his pre-existing conditions, which continued to require costly medical care and contributed to his bankruptcy.

Policy analysts say these findings underscore the limitations of the nation's current system of providing health insurance largely through employers. Some argue that even for those with insurance, benefits can be ephemeral.

"You can lose it because it's tied to employment," said Joseph Antos, a health policy researcher with the American Enterprise Institute, who said people were also at risk if their employers went out of business.

To understand the effect of illness or injury on bankruptcy, the researchers surveyed 1,771 people who filed for bankruptcy in 2001 and interviewed 931 of them. They discovered a complex web of factors leading to bankruptcy, particularly as illness caused people to lose their jobs or cut back the hours they worked just as they were facing high medical bills.

Many of those families, Ms. Warren said, then "endured a one-two punch."

The researchers examined those who specifically reported that their bankruptcies were precipitated by financial burdens caused by medical illness. They also included in a broader category of medical-related bankruptcy people who had more than $1,000 in unpaid medical bills at the time of the bankruptcy filing or had mortgaged their home to pay those bills.

The researchers acknowledged that often there was no single reason why someone went bankrupt. "There's definitely overlapping reasons," said Steffie Woolhandler, an associate professor of medicine at Harvard and one of the authors of the report.

They also pointed to gaps in coverage that left people vulnerable to financial crisis - particularly when workers switched jobs or were temporarily unable to afford contributions to a health plan. The high cost of continuing coverage under Cobra, the federal rule that allows former employees to stay on health plans for a time if they pay the entire cost, "is a cruel joke to these people," Ms. Warren said.

Even when people remain insured, the study also notes that many health plans have limits on certain kinds of coverage, like physical therapy or prescription drugs.

"If you're sick enough long enough, you're in deep trouble in our society," said David Himmelstein, an associate professor of medicine at Harvard Medical School, another of the study's authors.

While some policies do offer catastrophic coverage, which pays for care after costs reach a certain threshold, Dr. Himmelstein said that coverage "often kicks in after people are bankrupted" because they must incur high medical bills to qualify.

And employees, who often have little choice of plans and frequently do not understand the differences among plans, are increasingly offered policies with less and less coverage, some policy analysts say.

"There's a race to the bottom in terms of what health insurance means today," said Ron Pollack, the executive director of Families USA, a consumer advocacy group in Washington.

This area is ripe for additional research, said Uwe E. Reinhardt, a professor at Princeton University, who said that there had not been enough hard evidence about working Americans who became ill and then went broke. "We put together vignettes, but they are not powerful enough," he said.

The findings also raise questions about the effect of asking employees to bear a greater share of health cost through higher co-payments and the like. Many employers are shifting the increasing cost of care onto their employees, arguing that that trend gives workers an incentive to make judicious use of health care. But the researchers say higher co-payments and deductibles may well exacerbate the problem of medical bankruptcies.


The 50 Richest Members of Congress

By Paul Singer, Jennifer Yachnin and Casey Hynes
Roll Call Staff

22/09/08 "Roll Call" -- - Everything that you are about to read might be wrong.

Roll Call’s annual attempt to rank the riches of Members of Congress is hampered by one fundamental flaw: It is based on the lawmakers’ financial disclosure forms, which are extraordinarily unreliable sources of information.

The disclosure rules allow Members to report assets in broad categories, so there is no way to tell the difference between a $20 million investment and a $5 million investment. The top category on the Members’ forms is “over $50 million,” so it is impossible to accurately account for anything worth more than that — like a professional sports team, for example. There is also a gaping loophole for assets owned by the Members’ spouse or dependent children; anything worth more than $1 million in value can be reported as “over $1 million.” There is no way to tell whether that is $1.2 million or $1.2 billion.

The rules also don’t require reporting things of value that are not used to produce income — most notably any primary residence or other home that is not used for rentals. That loophole removes from most Members’ portfolios hundreds of thousands of dollars and in come cases millions of dollars worth of assets. Airplanes, fancy cars, antiques or other valuable items are not reported.

In filing a detailed disclosure form on behalf of Sen. Bob Corker (R-Tenn.), his accountants added this editorial note, which sums up the problem: The form is meant to comply with Senate disclosure rules but “is not intended to be a complete presentation of Senator Corker’s financial position.”

Beyond all of these flaws, there remains the fact that many, many financial disclosure forms filed by Members of Congress are simply inaccurate. A check mark placed in the wrong box can inflate or deflate a Member’s apparent net worth by millions of dollars, and misunderstandings of the rules have led Members to understate some assets, overstate others and claim additional assets they no longer own.

Where the errors are obvious or have created noticeable discrepancies from prior-year filings, Roll Call has attempted to contact the offices to get a proper understanding of the actual value of the asset or assets in question.

What remains below is a ranking of the 50 wealthiest Members of Congress based on the minimum net worth reported on their financial disclosure forms. To achieve these numbers, Roll Call totaled the assets listed on financial disclosure forms filed in 2008 (covering calendar year 2007) using the lowest number in the ranges in which Members are required to report. An asset from $500,000 to $1 million is counted as being worth $500,000, unless the Member has provided a brokerage statement or other documentation that offers more specific detail.

Liabilities, which are also reported in ranges, are calculated based on the minimum value, and are subtracted from total minimum assets to establish total net worth.

Assets that are not included on the forms but have values that have been established by Roll Call or other publications are not included for the purposes of assembling this ranking, because the Members are not required to report these numbers. This ranking is based only on what is reported on the annual disclosure forms.

Se listen over de 50 rigeste ved at klikke på nedenstående link, jeg har valgt ikke at publicere den på bloggen, da den er for lang.

kilde: http://www.rollcall.com/features/Guide-to-Congress_2008/guide/28506-1.html?type=printer_friendly