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CHINA'S GREAT LEAP BACKWARDS
Peter Kwong
gives us the "New China" without illusions: from the
"millionaires' fair" in Shanghai, with $60,000 diamond-studded dog leashes
to one
of the most savagely repressed working class and peasantry on
the planet. How China's
leaders swapped Marx and Mao for Milton Friedman. Alexander Cockburn
on What's wrong with the U.S. left.
They're sitting in darkened rooms weaving conspiracy fantasies
about 9/11; they're blogging; they're confusing a medium with
a movement; they're not doing enough to stop the war in Iraq.
John Ross
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How
Mr. and Mrs. Gates Should Dispense Warren Buffett's Billions
Temple
of Mammon, Planet of Doom
By ALEXANDER COCKBURN
When Frank Gehry gets around to designing
America's answer to the Sistine Chapel, I trust this postmodern
Temple of Mammon on Las Vegas Boulevard will have a ceiling fresco
depicting Warren Buffett's consignment of $31 billion to Bill
and Melinda Gates. As the older billionaire sits on his pillow
of cloud, his outthrust hand with its bag of securities is grasped
by Gates--the Adam of Software Commerce--while seraphs and cherubs
muse delightedly over the IRS regulations governing the sheltering
of Buffett's swag in tax-exempt nonprofit foundations.
Let us not waste too much time
here advising Mr. and Mrs. Gates how to spend Buffett's money.
At the moment it seems that the Gates couple's core focus is
the war on AIDS and malaria, both ravaging Africa. How to improve
the Dark Continent's overall well-being? America's senators and
representatives can be bought for bargain-basement sums. A modest
disbursement by the Gates Foundation-let us say $50,000 for each
senator and $20,000 for each rep-would most certainly buy enough
votes to end the current government subsidy, $4.5 billion for
2004, to cotton growers. The entire crop that year, the last
for which figures are available, was worth $5.9 billion and the
subsidy en-ables US growers to export three-quarters of their
harvest and control about 40 percent of world trade, thus destroying
the farm economies of countries like Mozambique, Benin and Mali.
The WTO found the United States in violation this spring, but
the ten largest cotton growers here-virtuous Jeffersonian toilers
such as Kelley Enterprises (Tennessee) and JG Boswell (California)-have
the necessary political clout to keep the subsidies coming. From1995 to 2004, JG Boswell Co of California received $16,808,427
in cotton subsidies from the US government, while Kelley Enterprises
received $8,694,643.
With overthrow of the cotton
subsidy as a pilot program, Gates could launch a wider onslaught
on the subsidies doled out to large wheat, rice and corn growers.
Economists are slightly more costly than politicians, but generous
Gates "scholarships" to prominent neoliberal economists
would be contingent on these economists' swift revision of their
foolish theories, currently ravaging rural India.
In Vidharbha, a cotton-growing
area of the state of Maharashtra, journalist P. Sainath has reported
in The Hindu that 540 suicides of ruined cotton farmers
occurred between June 2005 and May 2006. As many as 325 farmers
have killed themselves since January. May saw nearly eighty farmers
taking their own lives, ten of them doing so on a single day.
Some weeks, Sainath reports, there have been suicides every eight
hours, usually by the ingestion of pesticide.
The reason for this catastrophe
is the neoliberal onslaught on India's peasantry, which has been
advancing without remit for more than the past decade, promoted
by the World Bank and executed by India's federal and state governments.
The traditional NGO approach-ecstatic boasts in grant applications
and annual reports, zero benefits for the farmers-has been futile.
It should be the job of the Gates Foundation to turn the tide
inside the ivory towers generating the economic nonsense that
has wrought such a dreadful toll.
One particularly delightful
aspect of Buffett's $31 billion transfer was its stately mime
of the Great American Pageant. Here was no twitchy trader but
Buffett the wise investor, cherishing his favored stocks over
decades, ambling around his headquarters in homely Omaha. And
here was the younger entrepreneur, no longer the ruthless Master
of Micro-soft but the Third World's Santa Claus.
Could America desire any more
potent evocation of virtuous capitalism at work? Surely not.
And is this not a good time to evoke such virtues? It surely
is, because it's clear, as we head into the summer of 2006, that
the world capitalist system is out of control. Literally so.
In the older order of things, international bodies such as the
International Monetary Fund, the central banks and kindred bodies
could claim to have some purchase on the overall situation. Not
anymore. The major players these days are thousands of managers
of private equity funds-traders in shares, bonds, derivatives
and other instruments of a complexity that would require the
genius of the late Stanislaw Lem to evoke, as he did the planet
of Solaris.
It's virtually impossible now
to penetrate, let alone oversee, this vast Solaris of speculative
recycling of financial instruments such as credit derivatives.
As the historian Gabriel Kolko recently remarked in an
essay here on the looming crisis, "The credit derivative
market was almost nonexistent in 2001, grew fairly slowly until
2004 and then went into the stratosphere, reaching $17.3 trillion
by the end of 2005. Banks simply do not understand the chain
of exposure and who owns what. Senior financial regulators and
bankers now admit as much. The Long-Term Capital Management hedge
fund meltdown in 1998, which involved only about $5 billion in
equity, revealed this. The financial structure is now infinitely
more complex and far larger. The top 10 hedge funds alone in
March 2006 had $157 billion in assets."
The Bank for International
Settlements is no circus-tent Cassandra shrieking about the onrush
of Doom. Bankers don't shriek. But here's the BIS, trembling
before its crystal ball and talking, in its most recent annual
report, about "planning for the worst. Consider first a
discrete event which, if it occurred, would disrupt financial
markets. What might be done in advance to prepare for such an
eventuality? One important step would be to ensure the integrity
of domestic lines of communication among core financial firms,
their supervisors, the central bank and the operators of systemically
critical parts of the financial infrastructure. Another would
be to ensure similar openness at the international level. Stress
testing is now almost universal in financial firms, which is
highly desirable. Yet stress tests are based on simplifying assumptions
that necessarily fail to match the complexity of real world events."
That's a banker's way of saying, "The show could blow up
tomorrow, and there may not be any way to stop it." Steve
Wynn should get Gehry to work on the Temple of Mammon sooner
rather than later.
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