– dollars, dollars everywhere, as if that were unproblematic: no way those wildly printed dollars will not fall much deeper;
– mainly for the International Monetary Fund, with the other Bretton-Woods institutions a major pillar in mal-development;
– with no finger-pointing, "a global crisis demands a global solution", nothing special about Wall Street where the dam burst overflooding many, no naming of the worst banks, nor the worst funds and their masters, not even the precise nature of what went wrong (let Madoff atone for them all), not even naming the tax heavens by name (at Obama’s request, but OECD did);
– no mention of the least hit: say, Islamic banking and the Chinese real economy, estimated to grow 5 percent this year (10 percent on the coast, 0 percent inland – but for other reasons; and what we can learn;
– no detailed, known regulation plan, lest the system flaws become known and easily traceable to identifiable institutions. Putting state bureaucrats on the boards will not help much;
– only one culprit has been identified: protectionism;
– and, in all honesty, a little emergency aid for some victims of the inundation among the poor in the poor countries.
No dam repair. G20 combines the worst of capitalism and the worst of US socialism, taking from the poor giving to the rich, accumulating money on top of sluggish real economies, inviting speculation, not investment, preparing the next and worse crisis.
They start in the wrong end. The real economy has under-production of affordable necessities and over-production of sufficiencies, normalities, for the enormous world middle class. But their buying power and credit are decreasing while the upper classes are in good shape. Unimpeded trade will favor luxuries.
As Oxfam has calculated, one-week interest from the bailout money would make for safe childbirths all over for one year. But that money is unavailable. Learn from the Chinese: let the public and private sectors cooperate to employ the most needed to produce their own necessities, food and housing, health and education, infrastructure including green energy, and combine consuming their homegrown necessities, sustainably so, with more buying power. Add massive Keynesianism on top of this, reaching into the lower middle classes, and there will be a demand that can make the real economy take off. The upper classes can never deliver that alone.
This will cost money that could be taken from the bailout enormities, and from stupid military budgets. People hit by sinking banks should be offered employment, and necessities subsidized by luxury taxes, against a "Washington consensus" long time dead. More important than regulation is (re)constructing decent banks, with solid real economy backing for their financial deals, separating savings and investment (read: speculation) banks, not insuring the latter, and letting regional currencies blossom, not some Chinese formula. We are not ready, and never were, for one global currency and particularly not for giving one country the privilege of paying its debts by printing its own currency.
The Dow Jones will go up in response to G20, at the same time as the IMF predicts only 2 percent world growth, probably much too high. G20 will reproduce the old asynchrony between finance and real economy growth rates. Welcome next economic crisis, made in London.
Then NATO, desperately trying to reinvent itself; in secret talks, probably secret to hide the secret of having no secrets. A very poor choice that Dane. The point was not his insistence on freedom of expression, the point was his lack of understanding of freedom from humiliation and his consistent refusal of dialogue, with Danish Muslims, Arab ambassadors and the Secretary General of the Organization of the Islamic Conference. To have him from now on on top of that enormous military machine pitted against Islam more than anything else is a grave mistake regardless of what kind of bargaining chips were given to Turkey. The symbolic value of not electing him would have been enormous, and positive. The table is set for the next military crisis, made in Strasbourg.
Maybe they should pay attention to a pensive Obama in an interview with words flowing less smoothly, thinking aloud about not assuming any monopoly on truth but engaging in dialogue, not forcing any position on others but listening, negotiating, arriving at compromises. With that mode the divine mandate and exceptionalism are gone, and the US Empire is declining and falling as cultural and political power become more symmetric.
Good, fine, keep going. But there is still economic power to redesign for mutual and equal benefit, not only between countries, but also between elites and people. G20 fell short on that. And there is military power to redesign, and not only by reducing nuclear overkill by a third, or cutting down 761 bases in 158 countries. Time will come for them to join the garbage heaps of history, with capacity to solve conflict in their place. Not at a single point in G-20 and NATO-28 communiqués is there any indication of what a solution acceptable to all parties might look like.
The West is behind. Do not be surprised if the rest of the world is not waiting, but finds its own way.
6 April 2009