How Indeed?

From Michael Lebowitz:

Thus, a growing circle — a spiral of growing alienated production, growing needs and growing consumption. But how long can that continue? Everyone knows that the high levels of consumption achieved in certain parts of the world cannot be copied in the parts of the world which capital has newly incorporated into the world capitalist economy. Very simply, the Earth cannot sustain this — as we can already see with the clear evidence of global warming and the growing shortages which reflect rising demands for particular products in the new capitalist centers. Sooner or later, that circle will reach its limits. Its ultimate limit is given by the limits of nature, the limits of the Earth to sustain more and more consumption of commodities, more and more consumption of the Earth’s resources.

But well before we reach the ultimate limits of the vicious circle of capitalism, there inevitably will arise the question of who is entitled to command those increasingly limited resources. To whom will go the oil, the metals, the water — all those requirements of modern life? Will it be the currently rich countries of capitalism, those that have been able to develop because others have not? In other words, will they be able to maintain the vast advantages they have in terms of consumption of things and resources — and to use their power to grab the resources located in other countries? Will newly emerging capitalist countries (and, indeed, those not emerging at all) be able to capture a “fair share’’? Will the impoverished producers of the world — producers well aware of the standards of consumption elsewhere as the result of the mass media — accept that they are not entitled to the fruits of civilisation? How will this be resolved?

Read the whole article here

Thank You William Kleinknecht

At last, a US writer takes down Ronald Reagan at whose feet he lays America’s present economic decline.  I think it’s deeper than Reagan but it’s fine by me if we start there.  And about time too.  From Allen Barra at Truthdig:

In a fiery and lucid introduction he writes, “This book is born of annoyance: a great bewilderment over the myth that continues to surround the presidency of Ronald Reagan. It gives voice to a vast swath of psychically disenfranchised Americans, millions of them, lumped most thickly in the urban areas on either coast, who never understood Reagan’s appeal.” Kleinknecht’s thesis is nothing less than that Reagan was the “obvious enemy of the common people he claimed to represent, this empty suit who believed in flying saucers and allowed an astrologer to guide his presidential scheduling. …” The great conundrum “is this: none of [the] unmistakable harbingers of American decline is being laid where it belongs—at the door of Ronald Reagan” [emphasis Kleinknecht’s].

In the tradition of most previous Reagan critics, Kleinknecht doesn’t try to draw a bead on Reagan from an ivory tower. He goes after Reagan from the blue collar on up: “He enacted policies that helped wipe out the high-paying jobs for the working class that were the real backbone of the country. … His legacy—mergers, deregulation, tax cuts for the wealthy, privatization, globalization—helped weaken the family and eradicate small-town life and sense of community.”

Reaganomics did create fortunes, but mostly for those at the top of the economic ladder; it also brought “a reversal in the slow gains that the working class and the poor had made in the previous two decades.”

Read the rest of the review here and buy the book here

Canada’s Foreign Policy

I’m no nationalist.  Still, I’ve had moments of being proud to be a Canadian because, in the past, we have tended to represent the voice of reason and compassion in foreign affairs and have often been on the side of peace.  The position my country took at the UN this week with respect to the resolution on Israel and Gaza shocked me into paying greater attention to the path Canadian foreign policy has taken in recent years.

Todd Gordon puts all this in perspective.  He says, in part, this:

Canada’s stance on Israel shouldn’t be taken in isolation. It needs to be situated within Canada’s overall foreign policy, which is becoming more belligerent.

Since the early 1990s, Canadian corporate investments have spread at a considerable pace around the globe and into the developing world. Canada ranked eighth among the top foreign investor nations in the world in 2007, and has consistently ranked in the top ten in the last several years. Controlled for the size of its economy, Canada is the second largest investor among G7 nations in the global South. And income earned by Canadian multinationals off of their developing world investments has increased steadily over the last few decades, rising by 535 per cent from 1980 to 2007, for a total of $23.6 billion in earnings in the latter year.

And just like the third world investments of other rich nations, Canada’s are mired in human rights violations and environmental catastrophe. From mining, to oil and gas development, to sweatshop manufacturing, to banking, Canadian companies are systematically engaging in displacement of indigenous peoples from their land, destruction of ecosystems, targeted violence against local resistance to their investments and union busting.

All this is done with the support of the Canadian government, whether headed by Liberals or Tories. The government has facilitated the global expansion of Canadian capital through its aggressive pursuit of structural adjustment policies, one-sided trade and investment agreements and an aid policy designed in large measure to liberalize foreign markets. We also shouldn’t forget Canada’s absolute refusal to establish human rights legislation to govern the foreign activities of its corporations, many of which receive government funding for their predatory activities. Canada has also sought to undermine the UN’s Declaration on the Rights of Indigenous Peoples.

Canada’s view of the world, in other words, is one in which the South is subordinate to the whims and predilections of the North.

Read the whole thing here, at rabble. 

There isn’t much happening with respect to real leadership on the Israel/Gaza issue.  Michael Ignatieff has made it clear that he’s on Israel’s side and the NDP has nothing to be proud of in this regard either.  It makes sense to understand these positions outside of the idea of our leaders having any particular love for Israel.

Books and Blog Writers On The Economy

The Credit Crunch: Housing Bubbles, Globalisation and the Worldwide Economic Crisis by Graham Turner

From Andrew Jackson at Relentlessy Progressive Economists:

This book argues that the current financial turmoil signals a crisis in globalization that will directly challenge the free market economic model. Graham Turner shows that the housing bubbles in the West were deliberately created to mask the damage inflicted by companies shifting production abroad in an attempt to boost profits. As these bubbles burst, economic growth in many developed countries will inevitably tumble. The Japanese crisis of the 1990s shows that banks and governments may struggle to contain the fallout. The problem has not been limited to the US, UK and Europe: housing bubbles have become endemic across wide swathes of emerging market economies. As the West slides, these countries will see an implosion of their credit bubbles too, shaking their faith in the free market.   [more]  

Canadian economist bloggers:  watch the posts on Relentlessly Progressive Economics

Also watch Worthwhile Canadian Initiative and Shock Minus Control

Here’s Nobel prize winning economist Paul Krugman at the NYRB with What To Do

And another book recommendation:  John Maynard Keynes and International Relations, Economic Paths to War and Peace by Donald Markwell

Gender Gap

On Wednesday, the World Economic Forum released the 2008 Global Gender Gap Report - here it is in pdf format.

As reported by The WIP, Time Magazine responded this way to the Report:

It’s not just about equality anymore. A country’s economy, health and productivity increase as its gender gap narrows, according to the authors of this study published by the World Economic Forum, the Swiss non-profit that hosts an annual meeting in Davos of world political and business leaders.

Perhaps it’s a bit sad that the principle of equality on its own won’t make for change.  Not to be overly deterministic, the reality is that most change happens when it’s economically necessary.  I’ve noticed that the economic necessity is referred to more regularly these days when it comes to developing countries.  Maybe something will happen then … other than a steady stream of reports that tell women what we already know.

Congo’s Holocaust

Yes, we’ve all been sitting on our butts here in the West while a holocaust rages in Congo.  5.8 million people dead; untold numbers of women raped, gang-raped, forced into pregnancy, infected with HIV and maimed for life.  When I read the history of WW II, I often come across the question, why did we do nothing to stop the mass killing of Jews?  We can ask the same question now:  why have we done nothing, why are we still doing nothing, to stop the holocaust in Congo?  I thought it was never supposed to happen again.

From Johann Hari at The Independent:

The deadliest war since Adolf Hitler marched across Europe is starting again – and you are almost certainly carrying a blood-soaked chunk of the slaughter in your pocket. When we glance at the holocaust in Congo, with 5.4 million dead, the clichés of Africa reporting tumble out: this is a “tribal conflict” in “the Heart of Darkness”. It isn’t. The United Nations investigation found it was a war led by “armies of business” to seize the metals that make our 21st-century society zing and bling. The war in Congo is a war about you.

 

Every day I think about the people I met in the war zones of eastern Congo when I reported from there. The wards were filled with women who had been gang-raped by the militias and shot in the vagina. The battalions of child soldiers – drugged, dazed 13-year-olds who had been made to kill members of their own families so they couldn’t try to escape and go home. But oddly, as I watch the war starting again on CNN, I find myself thinking about a woman I met who had, by Congolese standards, not suffered in extremis.

I was driving back to Goma from a diamond mine one day when my car got a puncture. As I waited for it to be fixed, I stood by the roadside and watched the great trails of women who stagger along every road in eastern Congo, carrying all their belongings on their backs in mighty crippling heaps. I stopped a 27 -year-old woman called Marie-Jean Bisimwa, who had four little children toddling along beside her. She told me she was lucky. Yes, her village had been burned out. Yes, she had lost her husband somewhere in the chaos. Yes, her sister had been raped and gone insane. But she and her kids were alive.

I gave her a lift, and it was only after a few hours of chat along on cratered roads that I noticed there was something strange about Marie-Jean’s children. They were slumped forward, their gazes fixed in front of them. They didn’t look around, or speak, or smile. “I haven’t ever been able to feed them,” she said. “Because of the war.”

Their brains hadn’t developed; they never would now. “Will they get better?” she asked. I left her in a village on the outskirts of Goma, and her kids stumbled after her, expressionless.

There are two stories about how this war began – the official story, and the true story. The official story is that after the Rwandan genocide, the Hutu mass murderers fled across the border into Congo. The Rwandan government chased after them. But it’s a lie. How do we know? The Rwandan government didn’t go to where the Hutu genocidaires were, at least not at first. They went to where Congo’s natural resources were – and began to pillage them. They even told their troops to work with any Hutus they came across. Congo is the richest country in the world for gold, diamonds, coltan, cassiterite, and more. Everybody wanted a slice – so six other countries invaded.

These resources were not being stolen to for use in Africa. They were seized so they could be sold on to us. The more we bought, the more the invaders stole – and slaughtered. The rise of mobile phones caused a surge in deaths, because the coltan they contain is found primarily in Congo. The UN named the international corporations it believed were involved: Anglo-America, Standard Chartered Bank, De Beers and more than 100 others. (They all deny the charges.) But instead of stopping these corporations, our governments demanded that the UN stop criticising them. [emphasis mine]

There were times when the fighting flagged. In 2003, a peace deal was finally brokered by the UN and the international armies withdrew. Many continued to work via proxy militias – but the carnage waned somewhat. Until now. As with the first war, there is a cover-story, and the truth. A Congolese militia leader called Laurent Nkunda – backed by Rwanda – claims he needs to protect the local Tutsi population from the same Hutu genocidaires who have been hiding out in the jungles of eastern Congo since 1994. That’s why he is seizing Congolese military bases and is poised to march on Goma.

It is a lie. François Grignon, Africa Director of the International Crisis Group, tells me the truth: “Nkunda is being funded by Rwandan businessmen so they can retain control of the mines in North Kivu. This is the absolute core of the conflict. What we are seeing now is beneficiaries of the illegal war economy fighting to maintain their right to exploit.”

See the whole thing here

And see Roxanne Stasyszyn at Dissident Voice:

Most every Congolese citizen will agree that the reason for the instability in Congo is the international influence within their borders. Some point their finger at mineral trafficking. Some point to tribal and historical ‘facts’. Others, like Vital Katembo, claim it is obvious that people are doing harm when they are not achieving what they claim to work for—speaking of the humanitarian aid and conservation sectors—especially when they have the needed resources to accomplish their missions.

No matter where you point your finger or for what reason, the DRC is an international playground filled with extremely dangerous toys and irresponsible playmates. Many times, knowing where to point is simply based on how dangerous it is to point that way.

Stealing Resources in Congo

Stephanie Nolen is a truly great reporter and writer.  Watch her at The Globe for articles like this one in which she explains how Rwandan rebels responsible for the genocide there have become rich at the expense of a million Congolese people killed, raped, maimed, turned into refugees and living without hope that their country will be restored to peace – and how the government of the DRC and multinational companies from Europe, Canada and the US profit from the ongoing war.  Here’s a bit:

A squad of Congolese army soldiers are posted in Luntukulu to, in theory, isolate the Rwandan rebels. In reality, the checkpoint serves as a handy place for the soldiers to collect bribes from those who carry the minerals out of the militia’s territory. “We pay at every checkpoint coming and going: Every person who crosses pays 500 francs [about $1]. It’s not official but the province and district authorities know it,” said Olivier Mugaruka, who travels the rough roads of this region to buy tin, tungsten and coltan.

The soldiers also take a cut out of everything hauled out by legitimate miners such as Mr. Beningabo – an informal tax just like the 10 per cent he must pay to his village chief.

And that’s just small scale. In the next province of North Kivu, the infamous 85th brigade of the Congolese armed forces controls a huge cassiterite mine at Bisie, where it forces the local population to work. Although Congolese civil society organizations and media have repeatedly shown that the brigade controls the mine – and pockets the revenue from it – work continues undisturbed, and the tin is exported through both legal and illegal channels.

“We can only conclude that these activities are sanctioned at the highest levels,” said Patrick Alley, director of the British-based organization Global Witness, which has made extensive study of Congo’s mineral industry.

Read the whole terrible story here

And what has Canada done to assist the UN and the Congolese people?  Nada:

Allan Thompson, a Carleton University journalism professor and head of the Rwanda Initiative at the school, found two instances where Canada was asked by the UN, informally, to lead the Congo mission: 2003 and earlier this year. Canada’s help is seen by many as particularly significant because the country can send officials who speak French, the official language of Congo, and because Canada is well-regarded internationally.

However, Canada has rejected calls to lead the mission. Instead, Ottawa has opted to focus its attention and resources on the Afghanistan mission. The decision is seen by some as perhaps the most significant sign that Canada is moving further away from its internationally recognized role in global peacekeeping.

Read the whole article here

Tax the Rich

Linda McQuaig at The Star:

… a seismic shift could be underway. With the financial crisis exposing Wall Street’s greedy and reckless behaviour, the public may be becoming less deferential to the super-rich. Last weekend, CNN ran a special on Wall Street called Fall of the Fat Cats – a damning take on the nation’s financial elite that would have been inconceivable only a few months ago.

So far, the focus has been mostly on the misbehaviour of “fat cats,” and the need, therefore, for tighter market regulations. But a more profound question lurks beneath the surface: Is extreme inequality itself part of the problem?

Some analysts are now arguing that the extreme concentration of wealth may have contributed to the crisis, just as a similarly extreme concentration of wealth in the 1920s contributed to the crash of 1929 and the Great Depression.

[...]

James Livingston, a historian at Rutgers University, sees strong similarities between then and now.

Livingston points out that in the 1920s there was a massive shift in the distribution of income away from wages toward corporate profits. With consumer demand suppressed by the restraint on wages, corporations had little incentive to invest their hefty profits in expanding production. So they turned to financial speculation.

Since the 1980s, there’s been a similar income shift away from wages toward profits. Livingston argues that, with consumer demand suppressed, George W. Bush’s massive tax cuts for the rich “produced a new tidal wave of surplus capital with no place to go except real estate,” fuelling the housing bubble.

This suggests extreme inequality itself may lead to financial speculation. If so, meaningful solutions may have to go beyond re-regulation, and include a return to higher taxes on the rich.

Of course, the rich – and their think-tanks and media outlets – would insist such measures will stifle economic growth. But in the years between the Great Depression and the 1980s, financial markets were tightly regulated – and the rich were highly taxed. Yet – and this is crucial – those early post-war decades were times of great prosperity and growth.

Progressives have long argued for higher taxes on the wealthy – on grounds of fairness. But now, as the financial meltdown threatens to destroy the real economy, fairness may be secondary. Taxing the rich may boil down to a question of economic survival.

Read the whole thing here

Chomsky on Economic Crisis

From The Irish Times:

The immediate origins of the current meltdown lie in the collapse of the housing bubble supervised by Federal Reserve chairman Alan Greenspan, which sustained the struggling economy through the Bush years by debt-based consumer spending along with borrowing from abroad. But the roots are deeper. In part they lie in the triumph of financial liberalisation in the past 30 years – that is, freeing the markets as much as possible from government regulation.

These steps predictably increased the frequency and depth of severe reversals, which now threaten to bring about the worst crisis since the Great Depression.

Also predictably, the narrow sectors that reaped enormous profits from liberalisation are calling for massive state intervention to rescue collapsing financial institutions.

Such interventionism is a regular feature of state capitalism, though the scale today is unusual. A study by international economists Winfried Ruigrok and Rob van Tulder 15 years ago found that at least 20 companies in the Fortune 100 would not have survived if they had not been saved by their respective governments, and that many of the rest gained substantially by demanding that governments “socialise their losses,” as in today’s taxpayer-financed bailout. Such government intervention “has been the rule rather than the exception over the past two centuries”, they conclude.

In a functioning democratic society, a political campaign would address such fundamental issues, looking into root causes and cures, and proposing the means by which people suffering the consequences can take effective control.

The financial market “underprices risk” and is “systematically inefficient”, as economists John Eatwell and Lance Taylor wrote a decade ago, warning of the extreme dangers of financial liberalisation and reviewing the substantial costs already incurred – and proposing solutions, which have been ignored. One factor is failure to calculate the costs to those who do not participate in transactions. These “externalities” can be huge. Ignoring systemic risk leads to more risk-taking than would take place in an efficient economy, even by the narrowest measures.

The task of financial institutions is to take risks and, if well-managed, to ensure that potential losses to themselves will be covered. The emphasis is on “to themselves”. Under state capitalist rules, it is not their business to consider the cost to others – the “externalities” of decent survival – if their practices lead to financial crisis, as they regularly do.

Financial liberalization has effects well beyond the economy. It has long been understood that it is a powerful weapon against democracy. Free capital movement creates what some have called a “virtual parliament” of investors and lenders, who closely monitor government programs and “vote” against them if they are considered irrational: for the benefit of people, rather than concentrated private power.

[more here]

Katrina, Gustav, McCain & Obama

From Naomi Klein at The Nation:

The early results are in: Hurricane Gustav has helped John McCain’s bid for the White House. This is nothing short of incredible.

In the combination of New Orleans and hurricanes, we have the most powerful argument possible for the necessity of “change.” It’s all there: gaping inequality, deep racism, crumbling public infrastructure, global warming, rampant corruption, the Blackwater-ization of the public sector. And none of it is in the past tense. In New Orleans whole neighborhoods have gone to seed, Charity Hospital remains shuttered, public housing has been deliberately destroyed–and the levee system is still far from repaired.

Gustav should have been political rat poison for the Republicans, no matter how well it was managed. Yet, as Peter Baker noted in the New York Times, “rather than run away from the hurricane and its political risks, Mr. McCain ran toward it.” If this strategy worked, it was at least partly because Barack Obama has been running away from New Orleans for his entire campaign.

Unlike John Edwards, who started and ended his nomination bid surrounded by the decay of New Orleans’s Ninth Ward, Obama has shied away from the powerful symbolism the city offers. He waited almost a year after Hurricane Katrina to visit New Orleans and spent just half a day there ahead of the Louisiana primary. During the Democratic National Convention, Michelle Obama, Hillary Clinton and Joe Biden made no mention of New Orleans in their keynotes. Bill Clinton spared just two words: “Katrina and cronyism.”

In his Denver speech, Obama did invoke a government “that sits on its hands while a major American city drowns before our eyes.” But that only scratches the surface of what happened to New Orleans’s poorest residents, who were first forcibly relocated and then forced to watch from afar as their homes, schools and hospitals were stolen. As Obama spoke in Denver, families in New Orleans were already packing their bags in anticipation of Gustav, steeling themselves for yet another evacuation. They heard not even a perfunctory “our thoughts and prayers are with you” from the Democratic candidate for President.

Read the rest here