12-19-2008, 09:21 AM
G20: AN INCONSISTENT SCRIPT TO BE THOROUGHLY REWRITTEN
Damien Millet and Eric Toussaint
http://www.globalresearch.ca/index.php?context=va&aid=11151
The G20 summit that brought together major industrialised and emergent countries in Washington on 15 November 2008 is a dismal failure. The international financial crisis is deep indeed, stock markets lost close to 40% of their capitalisation in October 2008, financial markets are awaiting decisions by the States in order to develop remedies against a dark future. The international media spotlights were on Washington for this mid-November weekend. And yet…
Yet what happened in Washington? A sorry show, a script that lacks any credibility, but few spectators seem to care. In detective films it is seldom the case that the keys to the Court of Justice be given to arch criminals. Yet this is what the G20 summit is planning to do.
Since the debt crisis of 1982, major industrialised countries have strongly promoted the neoliberal economic measures that the IMF and the WB were imposing on DCs. In the 1980s and 1990s the South was crushed by debts because of the fall of commodity prices and a steep rise in interest rates; it was forced to reform its economy to be able to service the debt: it introduced wild deregulation, massive privatisations, opening of markets to the greater benefit of corporations in industrialised countries, cuts in public service and social budgets … It was claimed that the source of evil was too much State intervention, and the influence of the State on the economic sphere had to be reduced at all costs, even - or rather especially - when it attempts to stand up for the interests of the majority.
For Third World populations, the remedies imposed by the IMF, the WB and later the WTO, at the request of leaders of countries in the North were worse than the disease. Anti-IMF riots multiplied, for instance when the price of bread doubled overnight. With the notable exception of a few left-wing governments, often placed under strong pressure to bring them back to compliance, most governments of the South applied these measures without flinching. Presented as a prime requirement to the creation of wealth, economic deregulation was extended to the whole planet. Private financial institutions were then free to invent more and more complex financial products with a view to ever-increasing profits, turning a blind eye to actual economic consequences. Mind-boggling financial packages were set up without any public control, and of course any concern for morality. As long as it was possible, the dark side of deregulation was hidden behind enticing growth figures, without letting on that the growth thus paraded benefited only the richer segment of the population and that what was actually achieved was a staggering growth of inequalities.
Then the time came when it was no longer possible to claim that the bride was beautiful when her dress was soaked in blood. The international financial crisis started in August 2007 and intensified in 2008. Major banks (Northern Rock, RBS, Bear Stearns, ING, Fortis, Dexia, UBS and so many others), big insurance companies (AIG), mortgage associations (Freddy Mac, Fannie Mae) called on the State for help and the State often complied and bailed them out. But instead of taking advantage of the situation and retrieving control of those runaway machines, the State left decision-making power to those who had led the global economy to its current impasse.
This G20 summit shows that lessons have not been learned. The old demons of the past are still with us. The IMF and the WB, though further delegitimised by the failure of the measures they have enforced for 25 years and by the governance crisis they have experienced over the last years (Paul Wolfowitz' forced resignation as president of the WB, Horst Köhler and Rodrigo Rato resigning from the IMF, the recent investigation concerning Dominique Strauss-Kahn at the IMF), are still at the heart of the proposed solutions. WTO negotiations aiming at even more economic deregulation, while we have just witnessed the utter failure of this policy, are again on the agenda. While IMF loans could no longer find clients, Hungary, Ukraine and Pakistan have volunteered. Contrary to denials by concerned institutions, the same intolerable conditionalities are still the order of the day: as counterpart for the latest loan Hungary had to decide, among other things, to suppress civil servants’ 13th month bonus and freeze their salaries. Japan even proposed to supply the IMF with USD 100 billion so that it could increase its loans and carry on its fateful activities. Moreover the meeting that was intended to find a global solution to the current crisis was not held in the contexct of the United Nations but in the limited context of the G20. So the very promotors of an unfair and unsustainable model are asked to rescue this model. The only solutions that were put forward protect the interests of major creditors. Populations and poor countries as usual were not consulted.
When faced with such an inconsistent and ill-conceived script, one cannot but hope for a final twist that would introduce a measure of justice and ethics into all this. This final twist can only be found in social struggles all over the world to bring about a radical change in economic choices. And if the film should end as dismally as it started, there is a strong chance that the audience will be highly dissatisfied and make it known to the twenty directors in the most vehement manner ...
BUSH’s FAREWELL FARCE:
THE G-20 ECONOMIC SUMMIT
Shamus Cooke
http://www.globalresearch.ca/index.php?context=va&aid=11023
After hearing that the media was referring to the weekend gathering of the G-20 as “Bretton Woods II”, the White House immediately began a coordinated attack on expectations. The economic summit that was to fix the deepening economic crisis was raising hopes too high (Bretton Woods was the 1944 conference that re-organized the world capitalist system after WWII).
Bush: “This problem did not develop overnight and it will not be solved overnight”.
Media outlets rightly interpreted this — and other statements — to mean that little or nothing would be accomplished.
After learning about the announced “successes” of the summit, working people will likewise conclude that nothing of importance had occurred. And this after Bush urgently declared, "Billions of hardworking people are counting on us."
What was accomplished?
The only real accomplishment of the meeting was that no fighting took place (publicly), and that all 20 participants signed their names onto a common document. World tensions are in fact so strained that this really does constitute a form of success.
But when one browses through the lengthy joint statement, what is most noticeable is the lack of substance. Even though the document includes an “action plan” with “immediate steps” to be taken, the already-vague content is dulled with such words as “should," “recommended” and “as appropriate," which appear in nearly every sentence. For example:
“Regulators, supervisors, and accounting standard setters, as appropriate, should work with each other and the private sector on an ongoing basis to ensure consistent application and enforcement of high-quality accounting standards.”
The entire document is equally painful and ambiguous. The New York Times correctly stated: “Though the proposals were cast as ambitious reform, they mainly reflected steps that the countries were already undertaking."
These vague steps include: “higher regulatory standards," “promoting stability” and “exercising effective risk management” at financial institutions.
Why was more not more accomplished?
The answer to this was given by the Western corporate elite’s most intelligent publication, the Economist:
“… as urgency fades and the negotiators drown in complexity, national interest may gain at the expense of collective safety… international rules require enforcement, but nation-states demand sovereignty.”
These words echo the insight of Karl Marx 150 years ago, who pointed out that capitalism was an international system that contained a contraction due to the competing interests of each nation state. Although governments always claim to be acting impartially, real corporate interests are at stake -- most notably the pursuit of profits -- competing against the corporations of other nations, represented by their own “impartial” governments.
During times of economic crisis, these “national” interests become increasingly desperate and competitive, a reality all too present at the G-20 summit.
The same contradiction prevented the recent WTO talks from being successful, and as the world economy spirals downwards, it will have a similar effect on all multilateral discussions. Every country has an interest to push the effects of the crisis on to other, and use whatever methods available to push up domestic growth rates (the accumulated profits of each country’s mega-corporations).
The urge to expand profit was what helped deepen the current crisis, since US banks used all sorts of schemes and accounting tricks to gain leverage over their international competitors; a trick they learned from the Japanese banks prior to Japan’s recession of the 1990s — known as “the lost decade."
The European countries at the G20 summit were hoping that the US would agree to specific regulations that would end these practices, which essentially give the US a trade advantage — in financial instruments such as packaged toxic mortgages— over the rest of the world. The vague response of the document, combined with Bush’s repeated preaching about the “free market," put the issue at a stalemate.
Bretton Woods II ?
So why cannot the international community cooperate like they did at the original Bretton Woods conference?
In short, the world situation is far different. The Bretton Woods institutions were set up during WWII as soon as the Allies sensed they were going to win. But these “negotiations” were mostly dictates from the US, which was the only country not financially ruined or physically smoldering. As such, the Bretton Woods institutions — World Bank and IMF — strongly favored the US first, its European lackeys second, and the rest of the world last.
The world today has not one power, but many. France’s President Nicolas Sarkozy correctly pointed out, “America is still the number one power in the world…is it the only one? No, it isn’t.”
The “emerging economies” are demanding some real power, which the Bretton Woods institutions do not allow. Changing these structures are not in the interests of the US and European corporations. Although the G-20 document calls for more countries to play a bigger role in the IMF, the timetable for accomplishing this was not labeled as an “immediate action,” but a “medium-term action,” meaning that it could be put off indefinitely. The US mega-corporations that ultimately make these decisions are unwilling to make concessions that will adversely affect their profit margins. Strained tensions internationally will thus be further stressed.
Under today’s conditions, a Bretton Woods type of agreement will not emerge from roundtable discussions, but from next round of wars, the winner of which will set the standard at Bretton Woods II.
In 90 days the G-20 will reconvene and Obama will replace Bush as the chief US negotiator; he will be representing the same corporate interests, ensuring that nothing fundamental is done about an economic crisis that affects more ordinary people every day.
A necessary conclusion must be drawn: the world capitalist system is in a crisis that the ruling class cannot fix. Likewise, nothing will be done to actually help working class people unless we demand and fight for it ourselves. But points of unity already exist among us: stopping further Wall Street bailouts, ending war, creating jobs, saving and expanding social programs, stopping foreclosures, extending unemployment benefits, and most important, bailing out working people by taxing the super rich! A broad coalition organized around these issues would be far more powerful than the handful of elites currently represented by the two party system.
Damien Millet and Eric Toussaint
http://www.globalresearch.ca/index.php?context=va&aid=11151
The G20 summit that brought together major industrialised and emergent countries in Washington on 15 November 2008 is a dismal failure. The international financial crisis is deep indeed, stock markets lost close to 40% of their capitalisation in October 2008, financial markets are awaiting decisions by the States in order to develop remedies against a dark future. The international media spotlights were on Washington for this mid-November weekend. And yet…
Yet what happened in Washington? A sorry show, a script that lacks any credibility, but few spectators seem to care. In detective films it is seldom the case that the keys to the Court of Justice be given to arch criminals. Yet this is what the G20 summit is planning to do.
Since the debt crisis of 1982, major industrialised countries have strongly promoted the neoliberal economic measures that the IMF and the WB were imposing on DCs. In the 1980s and 1990s the South was crushed by debts because of the fall of commodity prices and a steep rise in interest rates; it was forced to reform its economy to be able to service the debt: it introduced wild deregulation, massive privatisations, opening of markets to the greater benefit of corporations in industrialised countries, cuts in public service and social budgets … It was claimed that the source of evil was too much State intervention, and the influence of the State on the economic sphere had to be reduced at all costs, even - or rather especially - when it attempts to stand up for the interests of the majority.
For Third World populations, the remedies imposed by the IMF, the WB and later the WTO, at the request of leaders of countries in the North were worse than the disease. Anti-IMF riots multiplied, for instance when the price of bread doubled overnight. With the notable exception of a few left-wing governments, often placed under strong pressure to bring them back to compliance, most governments of the South applied these measures without flinching. Presented as a prime requirement to the creation of wealth, economic deregulation was extended to the whole planet. Private financial institutions were then free to invent more and more complex financial products with a view to ever-increasing profits, turning a blind eye to actual economic consequences. Mind-boggling financial packages were set up without any public control, and of course any concern for morality. As long as it was possible, the dark side of deregulation was hidden behind enticing growth figures, without letting on that the growth thus paraded benefited only the richer segment of the population and that what was actually achieved was a staggering growth of inequalities.
Then the time came when it was no longer possible to claim that the bride was beautiful when her dress was soaked in blood. The international financial crisis started in August 2007 and intensified in 2008. Major banks (Northern Rock, RBS, Bear Stearns, ING, Fortis, Dexia, UBS and so many others), big insurance companies (AIG), mortgage associations (Freddy Mac, Fannie Mae) called on the State for help and the State often complied and bailed them out. But instead of taking advantage of the situation and retrieving control of those runaway machines, the State left decision-making power to those who had led the global economy to its current impasse.
This G20 summit shows that lessons have not been learned. The old demons of the past are still with us. The IMF and the WB, though further delegitimised by the failure of the measures they have enforced for 25 years and by the governance crisis they have experienced over the last years (Paul Wolfowitz' forced resignation as president of the WB, Horst Köhler and Rodrigo Rato resigning from the IMF, the recent investigation concerning Dominique Strauss-Kahn at the IMF), are still at the heart of the proposed solutions. WTO negotiations aiming at even more economic deregulation, while we have just witnessed the utter failure of this policy, are again on the agenda. While IMF loans could no longer find clients, Hungary, Ukraine and Pakistan have volunteered. Contrary to denials by concerned institutions, the same intolerable conditionalities are still the order of the day: as counterpart for the latest loan Hungary had to decide, among other things, to suppress civil servants’ 13th month bonus and freeze their salaries. Japan even proposed to supply the IMF with USD 100 billion so that it could increase its loans and carry on its fateful activities. Moreover the meeting that was intended to find a global solution to the current crisis was not held in the contexct of the United Nations but in the limited context of the G20. So the very promotors of an unfair and unsustainable model are asked to rescue this model. The only solutions that were put forward protect the interests of major creditors. Populations and poor countries as usual were not consulted.
When faced with such an inconsistent and ill-conceived script, one cannot but hope for a final twist that would introduce a measure of justice and ethics into all this. This final twist can only be found in social struggles all over the world to bring about a radical change in economic choices. And if the film should end as dismally as it started, there is a strong chance that the audience will be highly dissatisfied and make it known to the twenty directors in the most vehement manner ...
BUSH’s FAREWELL FARCE:
THE G-20 ECONOMIC SUMMIT
Shamus Cooke
http://www.globalresearch.ca/index.php?context=va&aid=11023
After hearing that the media was referring to the weekend gathering of the G-20 as “Bretton Woods II”, the White House immediately began a coordinated attack on expectations. The economic summit that was to fix the deepening economic crisis was raising hopes too high (Bretton Woods was the 1944 conference that re-organized the world capitalist system after WWII).
Bush: “This problem did not develop overnight and it will not be solved overnight”.
Media outlets rightly interpreted this — and other statements — to mean that little or nothing would be accomplished.
After learning about the announced “successes” of the summit, working people will likewise conclude that nothing of importance had occurred. And this after Bush urgently declared, "Billions of hardworking people are counting on us."
What was accomplished?
The only real accomplishment of the meeting was that no fighting took place (publicly), and that all 20 participants signed their names onto a common document. World tensions are in fact so strained that this really does constitute a form of success.
But when one browses through the lengthy joint statement, what is most noticeable is the lack of substance. Even though the document includes an “action plan” with “immediate steps” to be taken, the already-vague content is dulled with such words as “should," “recommended” and “as appropriate," which appear in nearly every sentence. For example:
“Regulators, supervisors, and accounting standard setters, as appropriate, should work with each other and the private sector on an ongoing basis to ensure consistent application and enforcement of high-quality accounting standards.”
The entire document is equally painful and ambiguous. The New York Times correctly stated: “Though the proposals were cast as ambitious reform, they mainly reflected steps that the countries were already undertaking."
These vague steps include: “higher regulatory standards," “promoting stability” and “exercising effective risk management” at financial institutions.
Why was more not more accomplished?
The answer to this was given by the Western corporate elite’s most intelligent publication, the Economist:
“… as urgency fades and the negotiators drown in complexity, national interest may gain at the expense of collective safety… international rules require enforcement, but nation-states demand sovereignty.”
These words echo the insight of Karl Marx 150 years ago, who pointed out that capitalism was an international system that contained a contraction due to the competing interests of each nation state. Although governments always claim to be acting impartially, real corporate interests are at stake -- most notably the pursuit of profits -- competing against the corporations of other nations, represented by their own “impartial” governments.
During times of economic crisis, these “national” interests become increasingly desperate and competitive, a reality all too present at the G-20 summit.
The same contradiction prevented the recent WTO talks from being successful, and as the world economy spirals downwards, it will have a similar effect on all multilateral discussions. Every country has an interest to push the effects of the crisis on to other, and use whatever methods available to push up domestic growth rates (the accumulated profits of each country’s mega-corporations).
The urge to expand profit was what helped deepen the current crisis, since US banks used all sorts of schemes and accounting tricks to gain leverage over their international competitors; a trick they learned from the Japanese banks prior to Japan’s recession of the 1990s — known as “the lost decade."
The European countries at the G20 summit were hoping that the US would agree to specific regulations that would end these practices, which essentially give the US a trade advantage — in financial instruments such as packaged toxic mortgages— over the rest of the world. The vague response of the document, combined with Bush’s repeated preaching about the “free market," put the issue at a stalemate.
Bretton Woods II ?
So why cannot the international community cooperate like they did at the original Bretton Woods conference?
In short, the world situation is far different. The Bretton Woods institutions were set up during WWII as soon as the Allies sensed they were going to win. But these “negotiations” were mostly dictates from the US, which was the only country not financially ruined or physically smoldering. As such, the Bretton Woods institutions — World Bank and IMF — strongly favored the US first, its European lackeys second, and the rest of the world last.
The world today has not one power, but many. France’s President Nicolas Sarkozy correctly pointed out, “America is still the number one power in the world…is it the only one? No, it isn’t.”
The “emerging economies” are demanding some real power, which the Bretton Woods institutions do not allow. Changing these structures are not in the interests of the US and European corporations. Although the G-20 document calls for more countries to play a bigger role in the IMF, the timetable for accomplishing this was not labeled as an “immediate action,” but a “medium-term action,” meaning that it could be put off indefinitely. The US mega-corporations that ultimately make these decisions are unwilling to make concessions that will adversely affect their profit margins. Strained tensions internationally will thus be further stressed.
Under today’s conditions, a Bretton Woods type of agreement will not emerge from roundtable discussions, but from next round of wars, the winner of which will set the standard at Bretton Woods II.
In 90 days the G-20 will reconvene and Obama will replace Bush as the chief US negotiator; he will be representing the same corporate interests, ensuring that nothing fundamental is done about an economic crisis that affects more ordinary people every day.
A necessary conclusion must be drawn: the world capitalist system is in a crisis that the ruling class cannot fix. Likewise, nothing will be done to actually help working class people unless we demand and fight for it ourselves. But points of unity already exist among us: stopping further Wall Street bailouts, ending war, creating jobs, saving and expanding social programs, stopping foreclosures, extending unemployment benefits, and most important, bailing out working people by taxing the super rich! A broad coalition organized around these issues would be far more powerful than the handful of elites currently represented by the two party system.