Global Economy - search results
The global derivatives bubble is now 20 percent bigger than it was just before the last great financial crisis struck in 2008. It is a financial bubble far larger than anything the world has ever seen, and when it finally bursts it is going to be a complete and utter nightmare for the financial system [...]
Don’t look now, but conditions are deteriorating in the western Pacific. Things are turning ugly, with consequences that could prove deadly and spell catastrophe for the global economy.
In Washington, it is widely assumed that a showdown with Iran over its nuclear ambitions will be the first major crisis to engulf the next secretary of defense — whether it be former Senator Chuck Hagel, as President Obama desires, or someone else if he fails to win Senate confirmation. With few signs of an imminent breakthrough in talks aimed at peacefully resolving the Iranian nuclear issue, many analysts believe that military action — if not by Israel, then by the United States — could be on this year’s agenda.
Lurking just behind the Iranian imbroglio, however, is a potential crisis of far greater magnitude, and potentially far more imminent than most of us imagine. China’s determination to assert control over disputed islands in the potentially energy-rich waters of the East and South China Seas, in the face of stiffening resistance from Japan and the Philippines along with greater regional assertiveness by the United States, spells trouble not just regionally, but potentially globally.
Islands, Islands, Everywhere
The possibility of an Iranian crisis remains in the spotlight because of the obvious risk of disorder in the Greater Middle East and its threat to global oil production and shipping. A crisis in the East or South China Seas (essentially, western extensions of the Pacific Ocean) would, however, pose a greater peril because of the possibility of a U.S.-China military confrontation and the threat to Asian economic stability.
The United States is bound by treaty to come to the assistance of Japan or the Philippines if either country is attacked by a third party, so any armed clash between Chinese and Japanese or Filipino forces could trigger American military intervention. With so much of the world’s trade focused on Asia, and the American, Chinese, and Japanese economies tied so closely together in ways too essential to ignore, a clash of almost any sort in these vital waterways might paralyze international commerce and trigger a global recession (or worse).
All of this should be painfully obvious and so rule out such a possibility — and yet the likelihood of such a clash occurring has been on the rise in recent months, as China and its neighbors continue to ratchet up the bellicosity of their statements and bolster their military forces in the contested areas. Washington’s continuing statements about its ongoing plans for a “pivot” to, or “rebalancing” of, its forces in the Pacific have only fueled Chinese intransigence and intensified a rising sense of crisis in the region. Leaders on all sides continue to affirm their country’s inviolable rights to the contested islands and vow to use any means necessary to resist encroachment by rival claimants. In the meantime, China has increased the frequency and scale of its naval maneuvers in waters claimed by Japan, Vietnam, and the Philippines, further enflaming tensions in the region.
Ostensibly, these disputes revolve around the question of who owns a constellation of largely uninhabited atolls and islets claimed by a variety of nations. In the East China Sea, the islands in contention are called the Diaoyus by China and the Senkakus by Japan. At present, they are administered by Japan, but both countries claim sovereignty over them. In the South China Sea, several island groups are in contention, including the Spratly chain and the Paracel Islands (known in China as the Nansha and Xisha Islands, respectively). China claims allof these islets, while Vietnam claims some of the Spratlys and Paracels. Brunei, Malaysia, and the Philippines also claim some of the Spratlys.
Far more is, of course, at stake than just the ownership of a few uninhabited islets. The seabeds surrounding them are believed to sit atop vast reserves of oil and natural gas. Ownership of the islands would naturally confer ownership of the reserves — something all of these countries desperately desire. Powerful forces of nationalism are also at work: with rising popular fervor, the Chinese believe that the islands are part of their national territory and any other claims represent a direct assault on China’s sovereign rights; the fact that Japan — China’s brutal invader and occupier during World War II — is a rival claimant to some of them only adds a powerful tinge of victimhood to Chinese nationalism and intransigence on the issue. By the same token, the Japanese, Vietnamese, and Filipinos, already feeling threatened by China’s growing wealth and power, believe no less firmly that not bending on the island disputes is an essential expression of their nationhood.
Long ongoing, these disputes have escalated recently. In May 2011, for instance, the Vietnamese reported that Chinese warships were harassing oil-exploration vessels operated by the state-owned energy company PetroVietnam in the South China Sea. In two instances, Vietnamese authorities claimed, cables attached to underwater survey equipment were purposely slashed. In April 2012, armed Chinese marine surveillance ships blocked efforts by Filipino vessels to inspect Chinese boats suspected of illegally fishing off Scarborough Shoal, an islet in the South China Sea claimed by both countries.
The East China Sea has similarly witnessed tense encounters of late. Last September, for example, Japanese authorities arrested 14 Chinese citizens who had attempted to land on one of the Diaoyu/Senkaku Islands to press their country’s claims, provoking widespread anti-Japanese protests across China and a series of naval show-of-force operations by both sides in the disputed waters.
Regional diplomacy, that classic way of settling disputes in a peaceful manner, has been under growing strain recently thanks to these maritime disputes and the accompanying military encounters. In July 2012, at the annual meeting of the Association of Southeast Asian Nations (ASEAN), Asian leaders were unable to agree on a final communiqué, no matter how anodyne — the first time that had happened in the organization’s 46-year history. Reportedly, consensus on a final document was thwarted when Cambodia, a close ally of China’s, refused to endorse compromise language on a proposed “code of conduct” for resolving disputes in the South China Sea. Two months later, when Secretary of State Hillary Rodham Clinton visited Beijing in an attempt to promote negotiations on the disputes, she was reviled in the Chinese press, while officials there refused to cede any ground at all.
As 2012 ended and the New Year began, the situation only deteriorated. On December 1st, officials in Hainan Province, which administers the Chinese-claimed islands in the South China Sea,announced a new policy for 2013: Chinese warships would now be empowered to stop, search, or simply repel foreign ships that entered the claimed waters and were suspected of conducting illegal activities ranging, assumedly, from fishing to oil drilling. This move coincided with an increase in the size and frequency of Chinese naval deployments in the disputed areas.
On December 13th, the Japanese militaryscrambled F-15 fighter jets when a Chinese marine surveillance plane flew into airspace near the Diaoyu/Senkaku Islands. Another worrisome incident occurred on January 8th, when four Chinese surveillance ships entered Japanese-controlled waters around those islands for 13 hours. Two days later, Japanese fighter jets were again scrambled when a Chinese surveillance plane returned to the islands. Chinese fighters then came in pursuit, the first time supersonic jets from both sides flew over the disputed area. The Chinese clearly have little intention of backing down, having indicated that they will increase their air and naval deployments in the area, just as the Japanese are doing.
Powder Keg in the Pacific
While war clouds gather in the Pacific sky, the question remains: Why, pray tell, is this happening now?
Several factors seem to be conspiring to heighten the risk of confrontation, including leadership changes in China and Japan, and a geopolitical reassessment by the United States.
* In China, a new leadership team is placing renewed emphasis on military strength and on what might be called national assertiveness. At the 18th Party Congress of the Chinese Communist Party, held last November in Beijing, Xi Jinping was named both party head and chairman of the Central Military Commission, making him, in effect, the nation’s foremost civilian and military official. Since then, Xi has made several heavily publicized visits to assorted Chinese military units, all clearly intended to demonstrate the Communist Party’s determination, under his leadership, to boost the capabilities and prestige of the country’s army, navy, and air force. He has already linked this drive to his belief that his country should play a more vigorous and assertive role in the region and the world.
In a speech to soldiers in the city of Huizhou, for example, Xi spoke of his “dream” of national rejuvenation: “This dream can be said to be a dream of a strong nation; and for the military, it is the dream of a strong military.” Significantly, he used the trip to visit the Haikou, a destroyer assigned to the fleet responsible for patrolling the disputed waters of the South China Sea. As he spoke, a Chinese surveillance plane entered disputed air space over the Diaoyu/Senkaku islands in the East China Sea, prompting Japan to scramble those F-15 fighter jets.
* In Japan, too, a new leadership team is placing renewed emphasis on military strength and national assertiveness. On December 16th, arch-nationalist Shinzo Abe returned to power as the nation’s prime minister. Although he campaignedlargely on economic issues, promising to revive the country’s lagging economy, Abe has made no secret of his intent to bolster the Japanese military and assume a tougher stance on the East China Sea dispute.
In his first few weeks in office, Abe has already announced plans to increase military spending and review an official apology made by a former government official to women forced into sexual slavery by the Japanese military during World War II. These steps are sure to please Japan’s rightists, but certain to inflame anti-Japanese sentiment in China, Korea, and other countries it once occupied.
Equally worrisome, Abe promptly negotiated an agreement with the Philippines for greater cooperation on enhanced “maritime security” in the western Pacific, a move intended to counter growing Chinese assertiveness in the region. Inevitably, this will spark a harsh Chinese response — and because the United States has mutual defense treaties with both countries, it will also increase the risk of U.S. involvement in future engagements at sea.
* In the United States, senior officials are debating implementation of the “Pacific pivot” announced by President Obama in a speech before the Australian Parliament a little over a year ago. In it, he promised that additional U.S. forces would be deployed in the region, even if that meant cutbacks elsewhere. “My guidance is clear,” he declared. “As we plan and budget for the future, we will allocate the resources necessary to maintain our strong military presence in this region.” While Obama never quite said that his approach was intended to constrain the rise of China, few observers doubt that a policy of “containment” has returned to the Pacific.
Indeed, the U.S. military has taken the first steps in this direction, announcing, for example, that by 2017 all three U.S. stealth planes, the F-22, F-35, and B-2, would be deployed to bases relatively near China and that by 2020 60% of U.S. naval forces will be stationed in the Pacific (compared to 50% today). However, the nation’s budget woes have led many analysts to question whether the Pentagon is actually capable of fully implementing the military part of any Asian pivot strategy in a meaningful way. A study conducted by the Center for Strategic and International Studies (CSIS) at the behest of Congress, released last summer,concluded that the Department of Defense “has not adequately articulated the strategy behind its force posture planning [in the Asia-Pacific] nor aligned the strategy with resources in a way that reflects current budget realities.”
This, in turn, has fueled a drive by military hawks to press the administration to spend more on Pacific-oriented forces and to play a more vigorous role in countering China’s “bullying” behavior in the East and South China Seas. “[America’s Asian allies] are waiting to see whether America will live up to its uncomfortable but necessary role as the true guarantor of stability in East Asia, or whether the region will again be dominated by belligerence and intimidation,” former Secretary of the Navy and former Senator James Webb wrote in the Wall Street Journal. Although the administration has responded to such taunts by reaffirming its pledge to bolster its forces in the Pacific, this has failed to halt the calls for an even tougher posture by Washington. Obama has already been chided for failing to provide sufficient backing to Israel in its struggle with Iran over nuclear weapons, and it is safe to assume that he will face even greater pressure to assist America’s allies in Asia were they to be threatened by Chinese forces.
Add these three developments together, and you have the makings of a powder keg — potentially at least as explosive and dangerous to the global economy as any confrontation with Iran. Right now, given the rising tensions, the first close encounter of the worst kind, in which, say, shots were unexpectedly fired and lives lost, or a ship or plane went down, might be the equivalent of lighting a fuse in a crowded, over-armed room. Such an incident could occur almost any time. The Japanese press has reported that government officials there are ready to authorize fighter pilots to fire warning shots if Chinese aircraft penetrate the airspace over the Diaoyu/Senkaku islands. A Chinese general has said that such an act would count as the start of “actual combat.” That the irrationality of such an event will be apparent to anyone who considers the deeply tangled economic relations among all these powers may prove no impediment to the situation — as at the beginning of World War I — simply spinning out of everyone’s control.
Can such a crisis be averted? Yes, if the leaders of China, Japan, and the United States, the key countries involved, take steps to defuse the belligerent and ultra-nationalistic pronouncements now holding sway and begin talking with one another about practical steps to resolve the disputes. Similarly, an emotional and unexpected gesture — Prime Minister Abe, for instance, pulling a Nixon and paying a surprise goodwill visit to China — might carry the day and change the atmosphere. Should these minor disputes in the Pacific get out of hand, however, not just those directly involved but the whole planet will look with sadness and horror on the failure of everyone involved.
Michael Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author, most recently, ofThe Race for What’s Left, just published in paperback. A documentary movie based on his book Blood and Oil can be previewed and ordered at www.bloodandoilmovie.com. You can follow Klare on Facebook by clickinghere.
Via Lance Roberts of Street Talk Live,
This recent release of the manufacturing and industrial production data added further support to our previous commentary regarding the search for the much touted economic recovery. Unfortunately, it has yet to manifest itself. The latest data showed that manufacturing in January fell back but after strong gains in December and November. However, it is important to remember that the gains at the end of 2012 were driven by the effects of Hurricane Sandy and the "Fiscal Cliff." That ramp up in November and December is likely to leave a void in demand in the coming months - so January's weakness is likely a return to a more normalized trend. Also, most of the production gains in the previous two months came from motor vehicles as replacements were needed post the hurricane flooding. For the month of January industrial production decreased 3.2% after a gain of 2.9% in December and rise of 5.9% in November.
Industrial production is one of the four major components of economic strength, or weakness, so the direction and trend of the industrial production data is key to our macroeconomic and investment outlook. The chart below shows the annual rate of change in industrial production going back to 1920. For the most part, when the annual rate of change in industrial production has been below zero - the economy has been in a recession. Currently, the annual rate of change is 2.1%, which is down sharply from the 7.5% rate of change seen at the peak of the economic growth cycle in 2010, clearly shows an economy that is not currently in recession. However, that could be just a function of time given the fairly steep decline that is currently in progress.
The concerns over economic growth are important, both domestically and internationally, as it directly affects corporate profit margins and valuations. The belief, currently, is that the economy in the U.S. can decouple from the rest of the globe and act as an island of economic prosperity. With 40% of corporate profits tied to international exposure it is unlikely that the U.S. can remain decoupled from the rest of the global community for long.
The chart below shows U.S. industrial production as compared to the Eurozone. It is clear that the drag from the Eurozone is weighing on domestic output.
Dwaine Van Vurren from RecessionAlert.com picked up on this fact in his recent article:
"With the disappointing initial GDP releases for Q42012 from Europe out, the 'world' as defined by 41 OECD countries across the globe, has plunged into recession. We define 'recession' through two alternative definitions for our comparison, either the presence of a single negative quarter-on-quarter growth or the more traditional two consecutive negative quarterly growths. Whichever way you look at it, the number of countries in expansion plunged dramatically between 3Q2013 and 4Q2012 as shown below:
It is clear the U.S is faring far better than most, but one has to question how long she can remain above water with the drag of her economic peers weighing upon her economy. "
There are three important points to be made here:
1) The economic data that is used by the NBER in determining economic recessions is subject to heavy backward revisions. This is why the NBER never announces a recession in advance of its occurrence. Due to the massive amounts of artificial intervention currently in the system - it is highly likely that the majority of models will fail to predict the onset of the next recession.
2) The drag on the Eurozone recession will continue to impede economic growth in the U.S., and;
3) The current reads on economic data as stated above, have been skewed due to the influences of the "fiscal cliff", Hurricane Sandy and an exceptionally warm winter. It is likely that the reversion to more normalized data trends in months ahead will show a more marked pullback in the domestic economic growth story.
What is clear, however, is that the economic data is not markedly improving. While monthly data points will remain volatile it is the trend of the data that is most telling about macroeconomic future. Currently, that outlook remains one of a "struggle through" environment at best.
Your rating: None
While hardly saying something that we have not mentioned at least once in the past four years, Jeremy Grantham's latest letter is worthy read if for no other reason because it is encouraging to see that despite the relentless creep of Bernanke's madenning central planning regime, the smartest people in the room still haven't lost sight of the big picture.
all global assets are once again becoming overpriced. This reminds me of the idea sometimes attributed to Einstein that a workable definition of madness is constantly repeating the same actions but expecting a different outcome!
it was extraordinarily unlikely that the extremely diversified U.S. housing market would shoot up like it did and, frankly, even more remarkable that Bernanke and his timid or incompetent advisors could miss it. This is a doubly amazing miss because his and Greenspan’s policy caused this bubble in the first place!) In comparison, his willingness to target an unrealistic 3% level for GDP growth is statistically a microscopic error, a picayune mistake. Unfortunately, though, in the hands of probably the most influential man in the global economic world, it is an extremely dangerous one.
I like the analogy of the Fed beating a donkey (the 1% growing economy) for not being a horse (his 3% growing economy). I assume he keeps beating it until it either turns into a horse or drops dead from too much beating!
a) if we in the U.S. don’t invest, others will and it will, in the longer run, definitely end badly; b) that even if there is a lower-return world in the future it is still better to own the cheaper assets; and c) it behooves buyers of “cap rate” type assets like real estate to realize that the current low rates are flattered by current Fed policy, which will, like everything else in life, pass away one day, leaving them looking overpriced. It can’t be too soon for me.
And some more:
The Fed’s negative real rates regime, designed to badger us into riskier investments in order to push up equity prices and grab a short-term wealth effect (that must be given back one day when least comfortable and least expected), has gone on for a long and, for me, boring time. This low interest rate period is serving, therefore, as a sneak preview of what a permanently lower rate regime might look like (although any permanently lower rates reflecting lower GDP growth would be by no means as low as these engineered rates that we are currently experiencing). So what are some of these effects? The artificially low T-Bill rates first work their way slowly up the curve. Next, the most obviously competitive type of equities – high yield stocks – begin to be bid up ahead of the rest of the market, as has happened. “I’ve just got to squeeze out some higher rates somewhere, anywhere,” is the pension fund plea. Then, this low rate competition begins to filter into other securities, historically sought after for their higher yields: higher-grade real estate, where the “cap rates” slowly fall; and, unfortunately, also forestry and farmland, mainly of the larger and more standard varieties that appeal to institutions, which show declines in their required yields, i.e., their prices rise. The longer the engineered rates stay below true market rates, the higher asset prices become until, yes, you’ve got it, corporate assets begin to sell way over replacement cost. Then, if the heart of capitalism is still beating at all, a long period of over-investment begins and returns are bid down and everything moves into balance, often helped along if asset prices get too high, as in 2000 and 2007, by a good healthy market crunch. (This strategy will be seen in future years as archetypical of the Greenspan-Bernanke era: badger and bully investors into taking more risk and eventually pushing assets – houses or stocks or both – far over replacement value, followed eventually, at long and hard-to-predict intervals, by exciting crashes. No way to run a ship, but it does produce an environment that contrarians like us, who can take a few licks, can thrive in.)
The normal capitalistic response described above runs smack into the new tendency for corporations to either sit on money or buy stock back (regardless of how expensive it may be!), which works in the opposite direction to create shortages, drive prices up, and, as a by-product, lower job creation and GDP growth. So where does this all come out? You tell me. All that I know is: a) if we in the U.S. don’t invest, others will and it will, in the longer run, definitely end badly; b) that even if there is a lower-return world in the future it is still better to own the cheaper assets; and c) it behooves buyers of “cap rate” type assets like real estate to realize that the current low rates are flattered by current Fed policy, which will, like everything else in life, pass away one day, leaving them looking overpriced. It can’t be too soon for me. In the meantime for us at GMO it means emphasizing care and maintaining a heightened sense of value discipline, not only in stock selection, as the whole world is once again bid up over fair value in a way so typical of the post 1994 era, but also in forestry and farmland. GMO has investments in those areas too and recognizes the need to sidestep overpricing by emphasizing the nooks and crannies. Fortunately there are more nooks and deeper crannies in forests and farmland than there are in almost any other area, certainly including stocks.
This doesn’t really fit in with a quarterly letter emphasizing important good news, but being about the Fed, I have to make an exception. The Fed appears to be still assuming a 3% growth rate for future U.S. GDP. It would be safer and more confidence-inspiring, now that Bernanke appears to take his responsibility for growth seriously, that he at least have a reasonable growth target (preposterous as that notion is to me that the Fed should or even could affect long-term growth simply by messing about with interest rates). The growth in available man-hours has definitely declined by about 1% a year, yet Bernanke’s assumption for our GDP’s normal trend growth appears unchanged at its old 3%. Ergo, he must be assuming an offsetting rise of 1% in productivity. But why? We should treat these assumptions quite seriously for this is famously (for me) and painfully (for all of us) the man who could not see a 3¾-standard-deviation housing market, and indeed protested that all was normal, etc., etc., etc. (Dear handful of niggling readers, this 3¾-standard-deviation event is calculated on the assumption of a normal distribution, as is often done in investing, even though we [especially at GMO] know this is not true but is just a convenient statistical device. In fact, we at GMO know quite a bit more on this topic for we have studied more or less all assets for as long as we can find data and we have found a remarkable total of 330 “bubbles,” 36 of which we call “major, important bubbles,” which we define as 2-standard-deviation events, given the same assumption. Well, a 2-sigma event should occur every 44 years in a normally distributed world and they have occurred every 31 years. This is much closer to random than we had previously thought. Yes, financial asset data is fat-tailed; that is, there are more outlying events than are found in a normally distributed series, but they are not extremely fat-tailed. They show up as 2-sigma events but occur as often as 1.8-sigma events would occur in normal distributions. Extrapolating, we can assume that Bernanke’s 3¾-sigma housing bubble would occur, adjusted for our fat-tailed real-life history, not every 10,000 years, but somewhere more like 1 in 5,000 years! I previously used “a 1-in-1,200-year event” as a casually selected very large number to describe the 2006 housing bubble. But under challenge, these current numbers are more accurate. No, this does not mean we have 10,000 years of data or even 5,000. It is just statistics, full as always of assumptions, which in this case we hope approach rough justice. What it does definitely mean, though, is that it was extraordinarily unlikely that the extremely diversified U.S. housing market would shoot up like it did and, frankly, even more remarkable that Bernanke and his timid or incompetent advisors could miss it. This is a doubly amazing miss because his and Greenspan’s policy caused this bubble in the first place!) In comparison, his willingness to target an unrealistic 3% level for GDP growth is statistically a microscopic error, a picayune mistake. Unfortunately, though, in the hands of probably the most influential man in the global economic world, it is an extremely dangerous one. I like the analogy of the Fed beating a donkey (the 1% growing economy) for not being a horse (his 3% growing economy). I assume he keeps beating it until it either turns into a horse or drops dead from too much beating! Fine-tuning economic growth, an impossible job for the Fed anyway, is hardly likely to get any easier by badly overstating trend-line growth. It seems nearly certain, therefore, that the Fed will keep trying to whack the donkey for far too long. The likely consequences of this policy are, to be frank, over my head, but my colleague Edward Chancellor will address them briefly if I can nag him effectively.
Courtesy of the above Fed policy, all global assets are once again becoming overpriced. This reminds me of the idea sometimes attributed to Einstein that a workable definition of madness is constantly repeating the same actions but expecting a different outcome! But, as always, asset prices are not uniformly overpriced: emerging markets and, we believe, Japan are only moderately overpriced. European stocks are also only a little expensive, but in today’s world are substantially more risky than normal. The great global franchise companies also seem only moderately overpriced. Forestry and farmland, which is not super-prime Midwestern, is also only moderately overpriced but comes with our nook and cranny sticker attached. But much of everything else is once again brutally overpriced. Notably, U.S. stocks (ex “quality”) now sell at a negative seven-year imputed return on our numbers and most global growth stocks are close to zero expected return. As for fixed income – fugetaboutit! Most of it has negative estimated returns on our data, and longer debt, as always, carries that risk that may be slight in any period, but is horrific if it occurs – accelerating inflation.
When one combines the apparent determination and influence of those who do the bullying with the career risk and short-termism of the bullied and the desire of the general public to believe unbelievable good news, these overpricings can go much further and the Fed can win another round or two. That’s the problem. A clue to timing would be when we begin to hear more passionate new era arguments: profit margins will always be higher; growth will snap back to 3% for the developed world; and new ones I can’t think of … maybe “when the discount rate is this low the Dow should sell at, perhaps, 36,000.” In the meantime, prudent managers should be increasingly careful. Same ole, same ole.
Your rating: None Average: 5 (3 votes)
Sweat Shops, GMOs and Neoliberal Fundamentalism: The Agroecological Alternative to Global Capitalism
Global Agribusiness, Dependency and the Marginalisation of Self-Sufficiency, Organic Farming and Agroecology
War Threat Rises As Economy Declines Paul Craig Roberts, Keynote Address to the Annual Conference of the Financial West Group, New Orleans, May 7, 2015 The defining events of our time are the collapse of the Soviet Union, 9/11, jobs…
The post War Threat Rises As Economy Declines — Paul Craig Roberts, appeared first on PaulCraigRoberts.org.
Barack Obama is secretly negotiating a global economic treaty which would destroy thousands of American businesses and millions of good paying American jobs. In other words, it would be the final nail in the coffin for America’s economic infrastructure. Obama knows that if the American people actually knew what was in this treaty that they [...]
The post Ultra-Secrecy Surrounds Barack Obama’s New Global Economic Treaty appeared first on The Economic Collapse.
RINF, Countercurrents, Global Research
“India is on fast track to bring agriculture under corporate control... Amending the existing laws on land acquisition, water resources, seed, fertilizer, pesticides and food processing, the government is in overdrive to usher in contract farming and encourage organized retail. This is exactly as per the advice of the World Bank and the International Monetary Fund as well as the international financial institutes.”
“Agriculture has been systematically killed over the last few decades… the World Bank and big business have given the message that this is the only way to grow economically… Sixty percent of the population lives in the villages or in the rural areas and is involved in agriculture, and less than two percent of the annual budget goes to agriculture… When you are not investing in agriculture, you think it is... not performing. You are not wanting it to perform... Leave it to the vagaries or the tyranny of the markets… agriculture has disappeared from the economic radar screen of the country… 70 percent of the population is being completely ignored…”
“In the last 10 years, we had 36 lakh crore going to the corporates by way of tax exemptions... They just created 1.5 crore jobs in the last ten years. Where are the exports? … The only sector that has performed very well in this country is agriculture... Why do you want to move the population... Why can’t India have its own thinking? Why do we have to go with Harvard or Oxford economists who tell us this?” (36 lakh crore is 36 trillion; 1.5 crore is 15 million)
Virtual Economy’s Phantom Job Gains Are Based on Statistical Fraud And More Fraud Is in the Works Paul Craig Roberts Washington can’t stop lying. Don’t be convinced by last Thursday’s job report that it is your fault if you don’t…
The post Virtual Economy’s Phantom Job Gains Are Based on Statistical Fraud — Paul Craig Roberts appeared first on PaulCraigRoberts.org.
As the Obama administration continues to alienate almost everyone else around the entire planet, an increasing number of prominent international voices are starting to question why the U.S. dollar should be so overwhelmingly dominant in global trade. In previous articles, I have discussed Russia's "de-dollarization strategy" and the fact that Gazprom is now asking their [...]
A lot of people that I talk to these days want to know "when things are going to start happening". Well, there are certainly some perilous times on the horizon, but all you have to do is open up your eyes and look to see the global economic crisis unfolding. As you will see below, [...]
The numbers that you are about to see are likely to shock you. They prove that the global financial Ponzi scheme is far more extensive than most people would ever dare to imagine. As you will see below, the total amount of debt in the world is now more than three times greater than global [...]
The status of the dollar as global reserve currency is being threatened by new international monetary powerhouses and the limitations of its debt-based control. This week, Ellen speaks with Mark Pash of the Center for Progressive Economics, who believes that issuance of currency as debt has outlived its usefulness and should be replaced with a credit-based model that covers basic human needs prior to personal accumulation of additional affluence. Ellen also speaks with Mike Krauss on petro-dollar politics upending America’s hold on global trade as the reserve currency. On the Public Banking Report, co-host Walt McRee talks with John Leonard of the PA Project about new public banking initiatives in one of America’s abandoned industrial centers, western PA, and the promise that public banking agencies may offer to reviving the economy that region.
Filed under: Ellen Brown Articles/Commentary
A new review carried out by the organization GRAIN reveals that small farms produce most of the world’s food. However, they are currently squeezed onto less than a quarter of the world’s farmland. The world is fast losing farms and farmers through the concentration of land into the hands of the rich and powerful. If we do nothing to reverse this trend, the world will lose its capacity to feed itself.
If you believe that the U.S. economy is heading in the right direction, you really need to read this article. As we look toward the second half of 2014, there are economic red flags all over the place. Industrial production is down. Home sales are way down. Retail stores are closing at the fastest pace [...]
By Susan Duclos
The evidence is piling up as reports come in that China, New Zealand, Russia, India and others are all signing agreements to trade directly using their individual currencies without first converting them to the dollar, which each and every instance puts another nail in the dollar's coffin.
It was reported in November 2013, that 23 countries have begun setting up swap lines to bypass the dollar.
March 1, 2014, the X22Report clearly predicted that a world war would be started to cover up the dollar's collapse.
March 3, 2014, James Turk told King World News "“History shows that when economic activity is weak and the standard of living stops improving, political rhetoric and saber-rattling follows, which often lead to war. It is easier for a country’s politicians to blame neighbors rather than themselves for the misguided policies they are pursuing which have caused the economy to suffer."
For those asking why Barack Obama, representing the US, and our European allies would poke the bear, so to speak, in provoking Russia with their actions to destabilize Ukraine, then threatening Russia when they moved into Crimea to protect their interests and the Russian population there, this is your answer.
Distract the focus from the policies that have crippled the US and put us on the path to total collapse, with starting a war by forcing Russia to act aggressively, then blame it all on Russia.
In December of 2013, Gerald Celente said "Absent the war card, I think we will see a financial crisis before the end of the second quarter of 2014."
The second quarter of 2014 starts on April first and ends on June 30, 2014......
One way or another, Barack Obama and Europe, who is also suffering economically, will provoke World War III.
It won't be about Ukraine, Russia, China, Syria or the Middle East, lives will be lost by the millions for no other reason than to deflect from the cause of the dollar dying and the chaos that will occur afterwards.
Stock up on gold and silver folks because your dollars won't be worth the paper it is printed on.
Two videos below, one from TheLipTV where the Buzzsaw show interviews Fabian Calvo about the signs to look for on the impending global economic reset, where the US dollar will no longer be the world reserve currency. The second video is an excellent explanation, clear and concise on the dead dollar walking, by Stefan Molyneux, where he provides the truth about government debt.
Cross posted at Before It's News
Is the U.S. economy steamrolling toward another recession? Will 2014 turn out to be a major "turning point" when we look back on it? Before we get to the evidence, it is important to note that there are many economists that believe that the United States never actually got out of the last recession. For [...]
Global Capitalism Has Written Off The Human Race Paul Craig Roberts Economic theory teaches that free price and profit movements ensure that capitalism produces the greatest welfare for the greatest number. Losses indicate economic activities where costs exceed the value of production, thus investment in these activities is curtailed. Profits indicate economic activities where the…
The post Global Capitalism Has Written Off The Human Race — Paul Craig Roberts appeared first on PaulCraigRoberts.org.
If you have been waiting for the "global economic crisis" to begin, just open up your eyes and look around. I know that most Americans tend to ignore what happens in the rest of the world because they consider it to be "irrelevant" to their daily lives, but the truth is that the massive economic [...]
On Tuesday, new Federal Reserve Chairman Janet Yellen went before Congress and confidently declared that "the economic recovery gained greater traction in the second half of last year" and that "substantial progress has been made in restoring the economy to health". This resulted in glowing headlines throughout the mainstream media such as this one from [...]
Have you been paying attention to what has been happening in Argentina, Venezuela, Brazil, Ukraine, Turkey and China? If you are like most Americans, you have not been. Most Americans don't seem to really care too much about what is happening in the rest of the world, but they should. In major cities all over [...]
Federal Reserve Fuels Global “Financial Parasitism”. Ultra-cheap QE Money Brings Untold Wealth to Corporate...
Global Systemic Dislocation: Economic Implosion in the EU, Internationalization of the Yuan, Crumble of...
By Andrew Gavin Marshall. Cross-posted from Occupy.com it3 15 The Group of Thirty (or G-30) describes itself as “a private, nonprofit, international body composed of very senior representatives of the private and public sectors and academia,” which “aims to deepen understanding of … Continue reading →
Global Power Project: The Group of Thirty and the “Good Discussion” They’re Still Having was originally published on Washington's Blog
China’s Sweeping Free Market Reforms. Consolidating the Cheap Labor Economy, Devastating Social Impacts
Deflation, Stagnation and Vast Money-Printing Operation Fueling Tensions, Creating Conditions for Another Global Financial...
It is hard to find the words to adequately describe how much of a disaster Obamacare is turning out to be. The debut of Healthcare.gov has been probably the worst launch of a major website in history, millions of Americans are having their current health insurance policies canceled, millions of others are seeing the size of their health insurance premiums absolutely explode, and this new law is going to result in massive numbers of jobs being lost. It is almost as if Obamacare was specifically designed to wreck the U.S. economy. Not that what we had before Obamacare was great. In fact, I have long argued that the U.S. health care system is a complete and total train wreck. But now Obamacare is making everything that was bad about our system much, much worse. Americans are going to pay far more for health care, the quality of that care is going to go down, they are going to have to deal with far more medical red tape, and thousands upon thousands of U.S. employers are considering getting rid of the health plans that they offer to employees altogether due to Obamacare. If the U.S. health care system was a separate nation, it would be the 6th largest economy on the entire planet, and now Obamacare is going to absolutely cripple it. To say that Obamacare is an "economic catastrophe" would be a massive understatement.
Of course we were assured that it wouldn't turn out this way. We were promised over and over that we were going to pay less for health care, get better coverage, and be able to keep our current health plans if we were pleased with them. The following is what Obama said at a rally in 2009...
"First of all, if you’ve got health insurance, you like your doctors, you like your plan, you can keep your doctor, you can keep your plan. Nobody is talking about taking that away from you."
That was such a dramatic lie that even NBC News is turning on him. They discovered that Obama has known for three years that most people that rely on individual health insurance policies would not be able to keep them...
Buried in Obamacare regulations from July 2010 is an estimate that because of normal turnover in the individual insurance market, “40 to 67 percent” of customers will not be able to keep their policy. And because many policies will have been changed since the key date, “the percentage of individual market policies losing grandfather status in a given year exceeds the 40 to 67 percent range.”
That means the administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.
Pretty much everything that Obama told us when he was selling us on his plan has turned out to be a lie.
So what can we expect from Obamacare moving forward? The following are 10 signs that Obamacare is going to wreck the U.S. economy...
#1 It is being projected that millions upon millions of Americans are going to lose their current health insurance plans thanks to Obamacare. Most will be faced with the choice of either purchasing much more expensive health insurance or going uninsured. This will put even more stress on a middle class that is already disintegrating rapidly. The following is from the recent NBC News investigation mentioned above...
Four sources deeply involved in the Affordable Care Act tell NBC News that 50 to 75 percent of the 14 million consumers who buy their insurance individually can expect to receive a “cancellation” letter or the equivalent over the next year because their existing policies don’t meet the standards mandated by the new health care law. One expert predicts that number could reach as high as 80 percent. And all say that many of those forced to buy pricier new policies will experience “sticker shock.”
#2 The health insurance premium increases that some families are experiencing are absolutely mind boggling. According to Mike Adams of Natural News, one family in Texas just got hit with a 539% rate increase...
Obamacare is named the "Affordable Care Act," after all, and the President promised the rates would be "as low as a phone bill." But I just received a confirmed letter from a friend in Texas showing a 539% rate increase on an existing policy that's been in good standing for years.
As the letter reveals (see below), the cost for this couple's policy under Humana is increasing from $212.10 per month to $1,356.60 per month. This is for a couple in good health whose combined income is less than $70K -- a middle-class family, in other words.
According to NBC News, an elderly couple in North Carolina was hit with a similar rate increase...
George Schwab, 62, of North Carolina, said he was "perfectly happy" with his plan from Blue Cross Blue Shield, which also insured his wife for a $228 monthly premium. But this past September, he was surprised to receive a letter saying his policy was no longer available. The "comparable" plan the insurance company offered him carried a $1,208 monthly premium and a $5,500 deductible.
Many Americans that were formerly in favor of Obamacare are now against it after they have seen what it is going to do to their budgets. The following is one example of this from a recent Los Angeles Times article...
Pam Kehaly, president of Anthem Blue Cross in California, said she received a recent letter from a young woman complaining about a 50% rate hike related to the healthcare law.
"She said, 'I was all for Obamacare until I found out I was paying for it,'" Kehaly said.
#3 Obamacare actually includes incentives for people to work less and make less money. The following is one example from a recent article by Sean Davis...
In California, a couple earning $64,000 a year would not qualify for health care subsidies. A bronze plan for them through Kaiser would cost them about $1,300 each month, or $15,600 a year. But if that same family earned just $2,000 less, it would qualify for over $14,000 in annual health care subsidies, dropping their premiums for that same Kaiser plan to less than $100 per month.
#4 Thankfully the employer mandate in Obamacare was delayed for a little while, but it will ultimately result in widespread job losses all over the country. In fact, we are already starting to see this happen. The following is from a recent article in the Economist...
BEFORE the recession, Richard Clark’s cleaning company in Florida had 200 employees, about half of them working full time. These days it has about 150, with 80% part-time. The downturn explains some of this. But Mr Clark also blames Barack Obama’s health reform. When it comes into effect in January 2015, Obamacare will require firms with 50 or more full-time employees to offer them affordable health insurance or pay a fine of $2,000-3,000 per worker. That is a daunting prospect for firms that do not already offer coverage. But for many, there is a way round the law.
Mr Clark says he is “very careful with the threshold”. To keep his full-time workforce below the magic number of 50, he is relying more on part-timers. He is not alone. More than one in ten firms surveyed by Mercer, a consultancy—and one in five retail and hospitality companies—say they will cut workers’ hours because of Obamacare. A hundred part-timers can flip as many burgers as 50 full-timers, and the former will soon be much cheaper.
You can find a very long list of some of the employers that have either eliminated jobs or cut hours because of Obamacare right here.
#5 Even if you are able to keep your job, there is no guarantee that your employer will continue to offer health insurance as an employee benefit. In fact, it is being reported that large numbers of employers have already decided to no longer offer health insurance to their employees because of Obamacare.
#6 According to CBS News, so far the number of people that have had their health insurance policies canceled is more than three times greater than the number of people that have signed up for new policies under Obamacare...
CBS News has learned more than two million Americans have been told they cannot renew their current insurance policies -- more than triple the number of people said to be buying insurance under the new Affordable Care Act, commonly known as Obamacare.
#7 If what is going on in New York is any indication, those that are signing up for health insurance under Obamacare are going to have a really, really hard time finding a doctor...
New York doctors are treating ObamaCare like the plague, a new survey reveals.
A poll conducted by the New York State Medical Society finds that 44 percent of MDs said they are not participating in the nation’s new health-care plan.
Another 33 percent say they’re still not sure whether to become ObamaCare providers.
Only 23 percent of the 409 physicians queried said they’re taking patients who signed up through health exchanges.
#8 Obamacare is turning out to be a gold mine for hackers and identity thieves. The personal information of millions of Americans could potentially end up being compromised. According to CNN, Healthcare.gov was found to be teeming with security holes...
The Obamacare website has more than annoying bugs. A cybersecurity expert found a way to hack into users' accounts.
Until the Department of Health fixed the security hole last week, anyone could easily reset your Healthcare.gov password without your knowledge and potentially hijack your account.
And according to the New York Post, Healthcare.gov has been designed so badly from a security standpoint that it might have to be "rebuilt from scratch"...
The chairman of the House Intelligence Committee said ObamaCare’s website, already a tangled mess, might need to be rebuilt from scratch to to protect against cyber-thieves because he fears it’s not a safe place right now for health-care consumers to deposit their personal information.
“I know that they’ve called in another private entity to try to help with the security of it. The problem is, they may have to redesign the entire system,” Rep. Mike Rogers said on Sunday on CNN’s “State of the Union” political talk show. “The way the system is designed, it is not secure.”
#9 As I noted in a previous article, approximately 60 percent of all personal bankruptcies in the United States are related to medical bills. Because millions of Americans are now losing their health insurance policies and millions of others will choose to pay the fine rather than sign up for Obamacare, more Americans than ever will find themselves overwhelmed with medical bills when they get seriously sick. This will result in even more personal bankruptcies.
#10 In the end, the burden for paying for the subsidies that Obamacare offers is going to overwhelmingly fall on the taxpayers. This is going to cause our nightmarish national debt to get even worse. Peter Schiff recently explained why this is going to happen...
It is also ironic that high-deductible, catastrophic plans are precisely what young people should be buying in the first place. They are inexpensive because they provide coverage for unlikely, but expensive, events. Routine care is best paid for out-of-pocket by value conscious consumers. But Obamacare outlaws these plans, in favor of what amounts to prepaid medical treatment that shifts the cost of services to taxpayers. In such a system, patients have no incentive to contain costs. Since the biggest factor driving health care costs higher in the first place has been the over use of insurance that results from government-provided tax incentives, and the lack of cost accountability that results from a third-party payer system, Obamacare will bend the cost curve even higher. The fact that Obamacare does nothing to rein in costs while providing an open-ended insurance subsidy may be good news for hospitals and insurance companies, but it's bad news for taxpayers, on whom this increased burden will ultimately fall.
So what do you think of Obamacare?
Has it directly affected your life yet?
Please feel free to share your thoughts by posting a comment below...
A report by an international foundation on modern slavery has revealed that nearly 30 million people are enslaved across the globe. The index released by the Walk Free Foundation (WFF) on Thursday said the slaves are either trafficked into brothels, forced into manual labor, fall victims to debt bondage, or are even born into servitude.
The budget brinkmanship has cost the world’s largest economy billions of dollars – as well as the trust of investors around the globe. And it also sparked calls to de-americanize the world economy. For more, RT talks to Pepe Escobar, Asia Times Online roving correspondent.
Earlier this month, National Security Agency (NSA) head Keith Alexander admitted that he had lied to the U.S. Congress and the American people in an attempt to justify the NSA’s growing surveillance of U.S. citizens.
In June, while attempting to…
It’s an idea whose time has come.On October 13, China’s official press agency Xinhua headlined “Commentary: US fiscal failure warrants a de-Americanized world.” More on this below.
Thomas Jefferson once warned:
“If the American people allow the banks to control…
An Overview of the United States National Debt
The Current Outstanding Public Debt of the United States is:
Every man, woman and child in the United States currently owes $55,092 for their share of the U.S. public debt
This article discusses the potential health risks of genetically engineered foods (GMOs). It draws on some previously used material because its importance bears repeating. It also cites three notable books and highlights one in particular – Jeffrey Smith’s “Genetic Roulette:…
Dear Readers, Friends and Fighters for Truth in Media,
Day in and day out, people are tuning in to Global Research to find out what is going on in the world. Often, the headlines leave little room for optimism. Threats…
This week Fairewinds Chief Engineer Arnie Gundersen participated in two panel discussions in Boston and New York City entitled “The Fukushima Daiichi Nuclear Accident: Ongoing Lessons” Other panelists included Ralph Nader, Peter Bradford, Naoto Kan, Gregory Jaczko and Jean-Michel Cousteau.…
Developments in two major US cities underscore the anti-working class agenda underlying the Obama administration’s Affordable Care Act (ACA), popularly known as Obamacare.
On Monday, Detroit Emergency Manager Kevyn Orr announced that health insurance is being eliminated for retired city…
Manufacturing Dissent is a documentary posthumously dedicated to Syrian Palestinian actor Mohamad Rafea, who was kidnapped, tortured and finally brutally murdered on Sunday November 4th 2012 by terrorist groups that have been set loose on the country since the US, UK and their western and Gulf State allies launched a covert war in Syria in early 2011, dressed up by the media as a “revolution”. The words spoken in this video by Rafea, and the courage he shows here, is why he was murdered.
As with GM crops, a host of unforeseen consequences may develop when we begin modifying humans with genes their children will inherit. But another argument against germline modification is that it will lead to designer babies and a new class of underdogs…
Amid reports of an emerging deal between Senate Democrats and Republicans on lifting the debt ceiling and funding the government through the beginning of next year, the social impact of the US government shutdown continues to spread.
The deal being…
Free and open expression is our most fundamental right. Without it all others are endangered.
Candidate Obama promised transparency, accountability, and reform. He called sunlight “the best source of information about waste, fraud, and abuse.”
He said whistleblowing reflects “acts…
The Conservative-Liberal Democrat coalition and Britain’s intelligence chiefs have launched a counter-offensive against whistleblower Edward Snowden in an effort to legitimise and continue their spying on the UK population and much of the world.Last week, Britain’s new head of MI5,…
As the US government shutdown enters its third week, it has become increasingly evident that the ongoing crisis and threat of a federal default is being used to create the political framework for the intensification of attacks on the working…
The Committee to Protect Journalists (CPJ) issued 30-page report October 10, titled “The Obama Administration and the Press,” describing the punitive treatment meted out by the administration against critics and whistleblowers. It details policies enacted by the administration which block…
Obscuring the Details: A Panoramic Look at America’s Case Against Syria, Mahdi Darius Nazemroaya, October 13, 2013
The US is Losing Control of the Internet…Oh, Really?, Global Research News, October 12, 2013
Foreigners Train Syrian Rebels in…
Negotiations between the White House and congressional Republicans over a deal to extend the US debt limit, reopen the government, and slash social spending, continued Friday evening, with both sides hoping to reach a agreement before stock markets open Monday.Obama…
For thousands of years, people have been writing about happiness. The ancient Greek philosopher Aristippus concluded that happiness lies in the pursuit of external pleasure. Other philosophers, from Antisthenes to Buddha, have stressed that looking inwards and leading an ascetic life based on virtue, simplicity and inner peace is the route to happiness. And then there are others who seem to think that we can only be occasionally happy in what is essentially a miserable world. The German philosopher Arthur Schopenhauer said that all happiness is an illusion and that life oscillates like a pendulum, back and forth between pain and boredom.
Happiness is, according to the Merriam-Webster dictionary, “a state of well-being and contentment: a pleasurable or satisfying experience.”
For some, happiness runs much deeper than merely being content. Aristotle held that being virtuous was only one aspect of happiness. In the absence of say wealth and intelligence, virtue could only bring about a form of contentment.
But that’s not enough for others. They strive to achieve an ongoing state of bliss, of feeling at one with the universe and everything in it. Through years of meditation, self-reflective practice or consciousness development, they can learn to transcend the illusion of existence and live life on a higher reality. A case of ignoring reality while striving to live out an illusion?
However, let’s not get too caught up in cynicism here. Illusion is all around us – both on a personal level and on a wider political level. The type of society we live in has a huge bearing on happiness or well-being. Perhaps Schopenhauer’s view is increasingly apt in this age of austerity and war-driven advanced capitalism.
But it doesn’t have to be this way.
From Bernays to Albright: ‘their’ happiness, our misery
Virtually every government in the world creates an illusion for its people. Take economic policy. Government policies might hurt us in the short term, but we are all on a one way route to the ‘promised land’ of happiness, or so we are told by the politicians, the corporate media and spokespersons for the ones who make us suffer to ensure they never have to – the privileged elite, the ruling class.
Western governments set out to con ordinary working folk by bringing us war in the name of peace, austerity in order to achieve prosperity and suffering to eventually make us happy. Is there any room for truth? Politicians never like to tell the public the truth. The feel-bad factor is never a vote winner. Best to keep the public in the dark and rely on positive spin. If people knew the truth, they just wouldn’t be happy.
And selling the feel-good factor is all pervasive. In this age of irretrievable materialism, the route to happiness is more goods, better goods, newer goods. A never-ending smorgasbord of commodities to be craved for, which will bring us happiness. In league with private corporations, governments have learnt to play on our desires to create a one-dimensional type of happiness based on consumerism.
In part, Edward Bernays is responsible for this. The father of modern public relations and propaganda, he was expert in manipulating human perceptions of pain and pleasure, misery and happiness. Tap into or shape people’s desires in a certain way, and you can sell virtually any notion of happiness (or reality), regardless of how bogus it may be.
Whether it was whipping up mass fear in the US about the bogeyman of communism or selling the ‘American Dream’ of happiness through consuming goods, Bernays and the advertising industry, which took its cue from him, were able to marry misery and happiness together – if you do not buy into consumer capitalism, the alternative will be misery; if you do not buy this or that product, life will be terrible; if you do not join in the celebration of capitalism, those awful Soviets will take over and impose a fundamentally unhappy system of equality on each and every one of us.
Under American capitalism, the lie was that everyone would all live happily ever after because of, not in spite of, gross inequality, massive privileges and disadvantages and exploitation of labour, which all went under the notion of meritocracy and a fair day’s work for a fair day’s pay.
Bernays’ propaganda techniques set the stage for con-trick of ‘liberal democracy’. The US government quickly learned that angels and demons could be manufactured out of thin air and, from Guatemala, Congo and Vietnam to Iraq, wars and destabilisations could be built on packs of lies – lies about evil-doers about to kick down the door, lies about the impending misery they would inflict on the US and on far away countries and lies about the government delivering us from impending doom.
Of course, it is best to arm ourselves to the teeth with nuclear weapons to ensure no one imposes their miserable regimes or awful ways of life on us. And to prevent us all shuddering with the fear of the threat of nuclear Armageddon on a daily basis, it’s a case of don’t worry, be happy, forget about it and watch TV. Even the very real danger of near-instant annihilation of the species is shoved to one side for the sake of a feel-good culture.
And the best way to instil that feeling is to have us endlessly treading around a wheel in a cage. Millions are locked into the pursuit of the Bernay’s model of happiness. They are locked into addiction. Addicted to the pursuit of acquisition, of hedonism, of chasing the dream. Addicted to the belief that there is a point to it all, where happiness is achieved by acquisitive materialism.
But, to paraphrase a sentiment from Buddhism: someone, somewhere, may well be suffering on our behalf for this happiness, this hedonism. There is no ‘may be’ about it.
So much blood has been spilled by those unfortunate enough to have been born in certain parts of the world on behalf of people in other parts of the world who deem the need to possess resources to be more worthy than the lives destroyed in order to grab them. Recall Madelaine Albright saying the deaths of 500,000 Iraqi children was a price worth paying for furthering the geo-political interests of US corporations. And yes, a drone attack here, some ‘collateral damage’ there, and those boys in the US control centres are happy with a hard days killing.
In the US Declaration of Independence, there is the phrase “Life, liberty and the pursuit of happiness.” Freedom and happiness (or the pursuit of it) is central, albeit built on the misery of others.
‘Life’, ‘liberty’ and ‘happiness’ have become debased. Fed to the masses, happiness has been confused with excessive individualism and the never-ending pursuit of material goods. It became hijacked by the likes of Bernays. With his knowledge of psycho-analysis (Sigmund Freud was his uncle), he knew it was relatively easy to manipulate desires and get people hooked on indulging in certain behaviour, even if ultimately they don’t really want or need those consumer products, those ‘false needs’, they strive to acquire. Getting them hooked is what really counts.
You have no time to think about the disillusionment because you are all too busy buying the next quick-fix for happiness product. It’s called retail ‘therapy’ for good reason. A therapy that has no long-term benefit. It’s a feel-bad, feel-good then feel bad again spiral.
But who needs this form of ‘happiness’, this type of ‘liberty’, ultimately underpinned by an Albright-esque view of life and death? No one. Yet the masses are encouraged to swallow the lies. The propaganda is pervasive.
Look no further than all those feel-good Hollywood trash films, passed off as ‘blockbusters’, that gloss over or usually ignore all the mundane, miserable aspects of life in working class ‘America’. Little wonder half the world seems to want to live in the US. The need to portray a bogus notion of happiness has served to kick reality into touch. The Hollywood propaganda machine has seen to that.
The ‘wealth creators’ and their crimes against humanity
The great ‘American Dream’ was built on craving and propaganda. It was built on stripping the environment bare, on the unsustainable raping of nature to fuel profits, perpetual war and misery and suffering. The sociologist C.Wright Mills noted the existence of a post-war power elite in the US back in 1956. An integrated power elite of big corporations, the military and the political establishment. Fast forward 57 years and it is responsible for a body count of ten million dead and counting (1), a statistic, a dirty secret that Hollywood will never tell. Ten million slaughtered in US-backed wars and by death squads, covert ops and destabilisations (2). Drug-running and the exporting of terror and murder, glorified by countless Hollywood icons, commentators and politicians under the banner of championing freedom and democracy.
The system in place exists to benefit not the majority, but small a minority of just 6,000 to 7,000 people (3). These are the extremely wealthy of the world who have cemented their position on the back of their ancestors and hundreds of years of capitalism. These are the people setting the globalisation and war agendas at the G8, G20, NATO, the World Bank, and the WTO. They are from the highest levels of finance capital and transnational corporations (4,5). These billionaires, this transnational capitalist class, dictate global economic policies and decide on who lives and who dies and which wars are fought and inflicted on which people. Although they are having a bit of difficulty in kick-starting it right now, with their see-through lies and hypocrisy, Syria is a case in point.
Their crimes against humanity are never mentioned as such. Instead, these people are called ‘wealth creators’. They are the self anointed role models and captains of industry. The high flyers who have stolen ordinary people’s wealth, who have stashed it away in tax havens, who have bankrupted economies because of their reckless gambling and greed and who have imposed a form of globalisation that results in devastating destruction and war for those who attempt to remain independent from them, or structurally adjusted violence via privatisation and economic neo-liberalism for millions in countries that have acquiesced.
Little wonder then that attempts to redress the balance, to snatch control away from this criminal class, have been brutally suppressed over the decades. From democratic leftist organisations to any government pursuing a socialist alternative, this class has used intelligence agencies or military might to attempt to subvert or annihilate any opposition.
From El Salvador and Chile to Egypt and India’s tribal belt, ordinary folk across the world have been subjected to policies that have resulted in oppression, poverty and conflict. But this is all passed off by politicians and the corrupt mainstream media as the way things must be. And anyone who stands up to this lie is ridiculed at best or spied upon, tortured and killed at worst in order to prevent the truth from emerging. And that truth is that many of us know what ‘happiness’ really is, the type of society necessary to establish it - based on communality and economic equality - and that the immensely wealthy people who stand in its way do all things necessary to prevent us from having it. Socialism is not a dirty word.
Various well-being surveys indicate that happier societies invest heavily in health, welfare and education, are more equal and live within the limits imposed by the environment. Many less wealthy countries (and wealthy) do well in such surveys because cultural priority is placed on family and friends, on social capital rather than financial capital, on social equity rather than corporate power. It’s no coincidence that people in places like Britain and the US appear to be less happy than they were 40 years ago (6).
Karl Marx knew that self actualisation was to be truly achieved in a society that makes it possible for someone to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as he has a mind. Being ‘happy’ is state of being, a state of worthwhile endeavour freely chosen and not imposed. It is not achieved through the pursuit of an ultimate unattainable elusive goal on a never ending treadmill of drudgery, a never ending treadmill of control. Not a fixed end point to be achieved by possessing a hundred latest, cutting edge consumer gadgets and indulging in the individualised competition of conspicuous consumption that proclaims ‘look at me, I’m better than you, I’m elevated from the crowd’. And by elevating oneself in such a way, the gregarious human animal is cut off from the wider group and may ultimately become rather unhappy.
And yet it is ordinary working class men (and women) who sign up to join the military and support this system on behalf of these immensely wealthy people. Such people have however always been adept in manipulating the masses to rally around flag and nation, evoking an emotive misplaced sense of patriotism to pursue their militarism or justify their exploitation.
In his book ‘A people’s History of England’, The Marxist academic AL Morton documented how ordinary people, over many hundreds of years, set out to challenge these rulers and often paid with their lives. Nothing ever came for free and ordinary working people fought tooth and nail for any rights that they managed to obtain.
Such a travesty then, that today, ordinary people are denied economic opportunities because this class has sold their jobs to the lowest bidder in India, China or elsewhere. This class and its ‘think tanks’ were determined to shatter the post-war Keynesian consensus based on a robust welfare state and government intervention in the economy to help secure full employment. Any notions of ‘fairness’ and the benefits to be derived from the welfare state were to be substituted for positive notions about the free market and individual responsibility in order to justify the real intention of shifting the balance of power towards elite interests.
With workers’ wages having been depressed over a period of decades, demand having thus been propped up by debt and bankers demanding to be bailed out, how convenient that the lie of ‘austerity’ is being used as a battering ram to finish off what the likes of Reagan and Thatcher did in the 80s with their pro-big business, pro-privatisation, anti-union, anti-welfare policies.
And we are supposed to thank ‘them’ for this? To vote for ‘their’ politicians, to join in a media circus to celebrate the birth of another royal parasite, to support their killing in Syria, in Libya, in Afghanistan, in Iraq and elsewhere?
Yes, we are supposed to back them and take in the poisonous lie that ‘we are all in it together’. And ordinary young men (and women) are supposed to sign up to fight their wars.
The working classes, the great, great grandchildren of the cannon-fodder ‘heroes’ sacrificed en masse on the blood-soaked battlefields of countless other wars that have gone before can now join up to fight again. For what? Austerity, powerlessness, imperialism, propping up the US dollar. For whom? Monsanto, Occidental Petroleum, BP, JP Morgan, Black Rock, Boeing and the rest.
The US economy has been hollowed out. Much of manufacturing has been shipped abroad. For those who benefitted, the US can go to hell in a handbasket, and it has. Meanwhile, for them, record profits ensue. It’s the ability to maximise profit by shifting capital around the world that matters to them, whether on the back of distorted free trade agreements (7) which open the gates for plunder, or through coercion and militarism (8) which merely tear them down.
In places like India, it cuts both ways. ‘Free’ trade and a state enforced militarism that both result in countless deaths and the forced removals of hundreds of thousands of the nation’s poorest folk from their lands and villages for the benefit of powerful corporations and a bogus notion of development. “I love my India” well-off ordinary urban dwellers often say. Patriotism has always been a distraction, a tool to be ignited by the oppressors at will among the masses.
As societies become hollowed out, with empty echoes of patriotism ringing out, they increasingly resemble boxes. The only thing inside however is a giant, brutal mechanical hand. There is nothing else apart from it. And it’s only function is to pull the lid shut if anyone ever dares to tear it open and shed light into the box. If successful, they will see the immorality, the lies, the hypocrisies. The social control based on the subversion of life, liberty and happiness.
3) David Rothkopf, SuperClass: The Global Power Elite and the World They are Making (New York: Farrar, Straus, and Giroux, 2008).
4) William I. Robinson, A Theory of Global Capitalism: Production, Class, and State in a Transnational World (Baltimore: John Hopkins University Press, 2004).
5) Peter Philips and Brady Osbourne, Exposing the Financial Core of the Transnational Capitalist Class, Global Research, September 13, 2013.
Democratic global Keynesianism as a way out of crisis? Critical reflections on Heikki PatomÃ¤ki’s...
|Image by EuroCrisisExplained.co.uk|
The real solution for Patomäki, however, lies in the EU becoming part of a democratic global Keynesianism. This would include the re-regulation of financial markets within a setting of new global institutions, perhaps including even a global central bank, with the goal to manage trade deficits and surpluses. ‘Needed are the sorts of global governance mechanisms that can shape the supply of money in the system, balance surpluses and deficits on an equitable basis, and direct the formation, composition and distribution of economic growth’ (P.168). His vision includes a world parliament to ensure the democratic nature of the new system as well as respect for ecological issues. In sum,
Nevertheless, as impressive as Patomäki’s analysis clearly is, and as nice as it would be to have a ‘global Finland’ characterized by equality, democracy and social justice, there are serious flaws in his historical understanding as well as recommendations for the future. Most importantly, it is his (mis-) understanding of the capitalist social relations of production, which causes a number of problems in his analysis. In line with his Keynesian focus on demand levels and related issues of distribution of wealth, he completely overlooks the way exploitation is rooted within the way of how production is organised around wage labour and the private ownership of the means of production as well as the related, fundamental class conflict between labour and capital.
|Photo by Gwydion M. Williams|
|Photo by informatique|
|Photo by Rob Lambert|
How did SIGTUR come into being?
|Members at the founding meeting of SIGTUR, Photo by Rob Lambert|
From this small beginning of two labor movements coming together to create something new, the initiative has grown over the past twenty years and now embraces movements in 35 countries and four continents.
|Photo by Rob Lambert|
They are able to bend governments to their will: undermining laws everywhere, which defend nature and society.
Indonesian activists commented,
In 2012, Professsor Seralini of the
Global Systemic Economic Crisis: Devastating Financial Explosion and Social Outburst on a Worldwide Scale
The Great University Gamble — Privatising English Higher Education against the background of global...
The cuts of direct government funding for universities was part of the 2010 Comprehensive Spending Review. Having assumed office with the promise to get national debt under control, cuts across the public sector including Higher Education (HE) were justified by the new coalition government through reference to the fallout of the global economic crisis. In The Great University Gamble, Andrew McGettigan unravels the true objectives underlying this policy. The crisis provided a convenient justification for cuts, he concludes, but it was the opening up of HE to private competition, which was the real purpose of restructuring: ‘new private providers are encouraged to enter the sector, established charitable institutions must become more commercial and more corporate in their governance, new opportunities are created for private equity’ (P.185).
Student loans: smoke and mirrors
In exchange for losing government funding, universities have been allowed since September 2012 to charge students annual fees of up to £9000. It is the risky way in which the related student loans have been organised, which clarifies that financial savings cannot have been the prime motivator of government policy. In the new system, instead of providing direct grants to universities for teaching, the government advances cash to the Student Loans Company, which in turn provides loans to students so that they can cover their tuition fees. Any saving realised through the new regime results from an accounting trick. ‘Grants paid to institutions are expenditure. A £3 billion cut to grants is a £3 billion cut to expenditure. Loans work differently. The money loaned is expected to come back – therefore it is not straight-forwardly expenditure. Initially, only the estimated loss on loans counts as expenditure’ (P.159). Currently, the government operates on the assumption that it will lose 32 per cent of what has been loaned, which if calculated as expenditure, will still imply a reduction of annual spending on education. This accounting practice, however, bears great risks. Student loans have a long re-payment cycle. For years, governments will have to advance billions of pounds of fees without knowing exactly how much will be paid back. ‘Outstanding student debt, money owed to the government, will climb from £35 billion in 2012 to £191 billion by 2046’ (P.165). And while the government calculates with a loss of 32 per cent, other assessments predict 37 per cent, which would result in an additional £680 million per year of costs. In general, ‘these loans are unsecured, there is no asset connected to them that can be cashed in, such as, say, a mortgage backed by property. We have to assume that there are no profound political or economic changes’ (P.48). Why would the government embark on this financial gamble at a time, when it has been proven that gambles of this kind can go horribly wrong?
Privatisation, competition and commodification
The government’s real ambition, McGettigan convincingly argues, is the partial privatisation of HE in order to introduce market competition in the sector and to provide new outlets for private investment. It is the same rationale, which also underlies NHS reforms and the restructuring of primary and secondary education. Public services and their democratic accountability are eroded in favour of the market and private companies. It is the shift to fees, which gives new providers and private equity access to the student loan book, thereby ‘creating new outlets for value extraction’ (P.78). And with private providers entering the market, ‘the majority of universities will need to become more akin to commercial operations, charging for services’ (P.5). In short, the nature of the whole sector is transformed. Private companies such as Pearson/Edexcel have not yet been given Degree Awarding Powers. Nevertheless, throughout the volume McGettigan provides a number of examples of joint ventures in which private companies become directly involved in the organisation of HE in order to make profit.
Resistance and mobilisation
In sum, this book provides an excellent and highly important overview of current restructuring of HE in England and its underlying purpose of privatisation. And yet, for those of us interested in resisting restructuring, it can only be a starting-point. The future of HE in England does not only depend on who has the ‘better’, ‘objective’ arguments about what a ‘good’ HE system should look like. Restructuring is first and foremost also an issue of balance of power between different interests in wider society. As McGettigan makes clear, it is the interests of private equity to find new investment opportunities, which are behind the government’s agenda (P.8). In order to resist these interests, counter power needs to be built up through broader mobilisation within HE and society more widely. In the reminder of this review, I will reflect on several additional aspects relevant to resistance.
What sort of trade union?
Finally, reflecting on resistance to restructuring also requires reflecting on the appropriate type of trade union organisation for this purpose. The University and College Union (UCU), which organises employees across Further and Higher Education in the UK, is at a crossroads. Should it pour further resources in the representation of individual members and transform itself into a kind of service union or should it develop more strongly an image of a campaigning union with the goal of impacting on the shape of HE as a whole? Clearly, it is only the latter strategy which may be able to resist restructuring successfully, while the former can at best ameliorate the situation for individuals without challenging restructuring itself.
[This post was first published in Another education is possible, No.4 (Spring/Summer 2013), pp.5-6.]