FacebookTwitterGoogle+RedditEmail

The Debt Looters

by GREG MOSES

It wasn’t the housing bubble exactly.  It was more the way the bubble was blown.

In the official language of the International Monetary Fund report for April 2009, “the crisis was largely caused by weak risk management in large institutions at the core of the global financial system combined with failures in financial regulation and supervision.”

After “the crisis” was caused, the weak risk managers along with their failed regulators and supervisors came back to loot the national debt.
In essence, the mortgage of the American Worker has been preyed upon to inflate the wealth and power of financiers.  Twice.

From the IMF point of view, more debt looting or “fiscal adjustment” will be necessary to keep the world economy from worse channels of trouble.  And so long as the money makes genuine entry into the credit system at lenient rates (if not terms), then it seems like sensible advice.  I believe the IMF when it claims that worse trouble is possible.

Says the IMF: “Key transmission routes [of worse trouble] include deep corrections in national housing markets, especially but not exclusively in advanced economies; corporate stress, especially but not exclusively in emerging economies; deflation risks, mainly in advanced economies; and increasing vulnerabilities in public sector balance sheets, especially but not only in emerging economies.”

Sure as sewage runs downhill, downside risks remain.

And yet, behaving like crash victims who climb from wrecks and run around for awhile, whole classes of boosters may be seen doing double flips of joy because they think they feel the world bouncing off its bottom.

There are many gloomy charts in the IMF report on the global economy, but the one that chills me most shows how each economic region of the globe is expected to contribute to the world recovery that  (we hope) will begin later this year.

When it comes to the crucial turning point for that recovery, the US is the only portion of the global economy that completely disappears from the bar graph.  The US will make zero contribution to global growth in the 4th quarter of 2009, then a bit of a negative contribution in the 1st quarter of 2010, before slacking to zero again in the 2nd quarter of 2010.

As for “other advanced countries,” you will find them colored in dark blue below the line of recovery, indicating that they will be worse than no help.  Above the line of positive Purchasing Power Parity, all the heaving lifting at the beginning of the second decade of the 21st Century will be upon the shoulders of China and the “rest of the world.”

This, my friends, is how you win a cold war without knowing the least reason why.

Along with my favorite storm watcher these days, Larry Kudlow, I also have faith that democracy and capital will figure out how to keep each other alive through this deluge, but I disagree with his forecast model.
For the past several decades capital has taken advantage of weakened democracy in the US.  It is now time for democracy to return the favor.  As US capital returns from subzero on the IMF recovery scale, democracy has to insist on new parameters.

If the Chinese can lead global growth in 2010, what happens to the claim that big governments must be incapable?

Therefore, health care coverage for all people, cap and trade for all creatures, a path to citizenship for every neighbor in the neighborhood, and a genuine national youth program, all of these things will elevate the US to a place we should have been 30 years ago.

When we voted for change last November we weren’t talking about pennies on the dollar.  Bankers of the world, untie!

GREG MOSES is editor of TexasWorker.org.  He can be reached at gmosesx@gmail.com.

 

Greg Moses writes about peace and Texas, but not always at the same time. He is author of Revolution of Conscience: Martin Luther King Jr. and the Philosophy of Nonviolence. As editor of the Texas Civil Rights Review he has written about racism faced by Black agriculturalists in Texas. He can be reached at gmosesx@gmail.com

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

March 30, 2017
William R. Polk
What Must be Done in the Time of Trump
Howard Lisnoff
Enough of Russia! There’s an Epidemic of Despair in the US
Ralph Nader
Crash of Trumpcare Opens Door to Full Medicare for All
Carol Polsgrove
Gorsuch and the Power of the Executive: Behind the Congressional Stage, a Legal Drama Unfolds
Michael J. Sainato
Fox News Should Finally Dump Bill O’Reilly
Kenneth Surin
Former NC Governor Pat McCory’s Job Search Not Going Well
Binoy Kampmark
The Price of Liberation: Slaughtering Civilians in Mosul
Bruce Lesnick
Good Morning America!
William Binney and Ray McGovern
The Surveillance State Behind Russia-gate: Will Trump Take on the Spooks?
Jill Richardson
Gutting Climate Protections Won’t Bring Back Coal Jobs
Robert Pillsbury
Maybe It’s Time for Russia to Send Us a Wake-Up Call
Prudence Crowther
Swamp Rats Sue Trump
March 29, 2017
Jeffrey Sommers
Donald Trump and Steve Bannon: Real Threats More Serious Than Fake News Trafficked by Media
David Kowalski
Does Washington Want to Start a New War in the Balkans?
Patrick Cockburn
Bloodbath in West Mosul: Civilians Being Shot by Both ISIS and Iraqi Troops
Ron Forthofer
War and Propaganda
Matthew Stevenson
Letter From Phnom Penh
James Bovard
Peanuts Prove Congress is Incorrigible
Thomas Knapp
Presidential Golf Breaks: Good For America
Binoy Kampmark
Disaster as Joy: Cyclone Debbie Strikes
Peter Tatchell
Human Rights are Animal Rights!
George Wuerthner
Livestock Grazing vs. the Sage Grouse
Jesse Jackson
Trump Should Form a Bipartisan Coalition to Get Real Reforms
Thomas Mountain
Rwanda Indicts French Generals for 1994 Genocide
Clancy Sigal
President of Pain
Andrew Stewart
President Gina Raimondo?
Lawrence Wittner
Can Our Social Institutions Catch Up with Advances in Science and Technology?
March 28, 2017
Mike Whitney
Ending Syria’s Nightmare will Take Pressure From Below 
Mark Kernan
Memory Against Forgetting: the Resonance of Bloody Sunday
John McMurtry
Fake News: the Unravelling of US Empire From Within
Ron Jacobs
Mad Dog, Meet Eris, Queen of Strife
Michael J. Sainato
State Dept. Condemns Attacks on Russian Peaceful Protests, Ignores Those in America
Ted Rall
Five Things the Democrats Could Do to Save Their Party (But Probably Won’t)
Linn Washington Jr.
Judge Neil Gorsuch’s Hiring Practices: Privilege or Prejudice?
Philippe Marlière
Benoît Hamon, the Socialist Presidential Hopeful, is Good News for the French Left
Norman Pollack
Political Cannibalism: Eating America’s Vitals
Bruce Mastron
Obamacare? Trumpcare? Why Not Cubacare?
David Macaray
Hollywood Screen and TV Writers Call for Strike Vote
Christian Sorensen
We’ve Let Capitalism Kill the Planet
Rodolfo Acuna
What We Don’t Want to Know
Binoy Kampmark
The Futility of the Electronics Ban
Andrew Moss
Why ICE Raids Imperil Us All
March 27, 2017
Robert Hunziker
A Record-Setting Climate Going Bonkers
Frank Stricker
Why $15 an Hour Should be the Absolute Minimum Minimum Wage
Melvin Goodman
The Disappearance of Bipartisanship on the Intelligence Committees
FacebookTwitterGoogle+RedditEmail