Since World War II scores of front rank politicians, business leaders, and economists have championed globalization. John Foster Dulles, Robert McNamara, Henry Kissinger, George Shultz and Robert Rubin are some of the American cabinet secretaries who have promoted the transnational economic rights of capital. Bush 41 deserves a special mention for his role in advancing globalization. Perhaps the leading drum major for the march to globalization over the years has been banker and oil fortune heir David Rockefeller. Of course, all these folks have insisted that capitalism, local and global, is a great boon to mankind and is freeing from want hundreds of millions; billions of people.
That's one way to look at it. State of the World Forum President Jim Garrison has an alternative view. He is quoted in Perkins' Confessions of an Economic Hit Man (pp. 199-200):
Taken cumulatively, the integration of the world as a whole, particularly in terms of economic globalization and the mythic qualities of "free market" capitalism, represents a veritable "empire" in its own right...
No nation on earth has been able to resist the compelling magnetism of globalization. Few have been able to escape the "structural adjustments" and "conditionalities" of the World Bank, the International Monetary Fund, or the arbitrations of the World Trade Organization, those international financial institutions that, however inadequate, still determine what economic globalization means, what the rules are, and who is rewarded for submission and punished for infractions.
Such is the power of globalization that within our lifetime we are likely to see the integration, even if unevenly, of all national economies in the world into a single global, free market system.
Perkins explains the World Bank makes loans to developing nations with the monies going directly to transnational corporations to carry out gargantuan infrastructure projects. The developing nations are thereby both integrated into the world economy and hopelessly buried in debt, thereafter to be subject to the edicts of the IMF.
The IMF then requires the governments of those debt ridden countries to adopt severe austerity policies including the suspension of social welfare expenditures and the selling off of their resources for pennies on the market value dollar. Of course, that could never happen here in the U. S. of A.. I mean centrist economists would be giving us a heads up about that for sure, right?
I'm from the IMF and I'm here to help.
IMF Finally Knocks on Uncle Sam's DoorWe're becoming colonials once again, this time accepting of "taxation without representation."
June 30, 2008
Der Spiegel wrote that the IMF had "informed" Federal Reserve chairman Ben Bernanke of plans that would have been unheard of in the past: a general examination of the US financial system. The IMF's board of directors has ruled that a so-called Financial Sector Assessment Program is to be carried out in the US.
Der Spiegel reports that the IMF is threatening to seriously study the accounts of America, something President George Bush is determined to prevent at least while he is in the White House, informing the IMF that it can begin its investigation but cannot complete it until he leaves office.
Under its by-laws, the IMF is charged with the supervision of the international monetary system. About two-thirds of IMF members - but never the US - have already endured this painful procedure...
Dr. Ravi Batra, who has predicted imminent economic calamity several times during the last twenty years, is in "I told you so" mode these days.
Business journalist Gretchen Morgenson has warned for years about the ethical conflicts of financial analysts associated with brokerage houses, the senselessness of some of those large compensation packages, and episodes of the break down of responsible corporate board governance from the pages of the New York Times.
In her recent article about the unfolding Fannie Mae; Freddie Mac crisis, Morgenson explains those two publicly traded, government-sponsored enterprises (GSE) have asset portfolios of $5 trillion and reminds the reader both were fined for accounting irregularities in recent years (Fannie to the tune of $400 million in 2004 and Freddie for the bargain sanction of $125 million in 2003). Morgenson cites a Bridgewater Associates estimate that losses from the eighteen month old economy wide "credit crisis" are growing and "might amount to $1.6 trillion when all is said and done."
Then there are our serious academics, centrists like Brad DeLong who remain unshaken in their belief that the road to recovery is but a few regulatory tweaks and maybe a health care program away. Centrist economists hold onto a few basic assumptions; that the equities market is fairly priced not just in a definitional sense but because prices are determined by the combined wisdom of hundreds of thousands of investors; that a brilliant employee can create great wealth for a company but might not, what, muster the energy to do so for a mere million or two dollars a year; that what ails the American economy is, in part, a mid thirty percent top income tax bracket that should be nearer to the forty percent level; and that our workers need more education and training (though it is not clear what it would be economically useful for them to learn). Understanding the big picture as they do, tenured centrist academics adjudge that the costs of globalization being borne by working class Americans are being compensated in full by the gains being made by the deserving workers in the developing world and by the international good will global trade creates.
DeLong warns against making sweeping changes to our economic system because such changes lead to unpredictable consequences likely to leave us worse off; better that any changes be made incrementally.
He is willing to "carry water" for the latest Treasury Secretary from Goldman Sachs and the current Fed Chairman because they are quite expert at their jobs. (Alan Greenspan also was seen as quite the expert while he was serving as Fed Chairman -- looking back, some of his mistakes are starting to glare.)
Secretary Paulson and Chairman Bernanke are crisis management specialists who plan in secret and speak without too much clarity. Paulson came up through the ranks at Goldman Sachs as an innovator and quick thinking trader of financial instruments. Bernanke is an academic who has made a study of the monetary causes of The '29 Crash and The Great Depression. They both know how to keep things going...one calendar quarter at a time; on recent occasions, one weekend at a time. They exude a confidence that says, if left to their own designs, they will keep most of the trains running.
Of course, there are more profound critics of the system than the pessimistic market watchers mentioned earlier in this piece. Their criticism is not about an inevitable boom-bust cycle. Rather, in a post-Keynesian world they are concerned about the status quo the capitalist class is trying create. Noam Chomsky, "economic hit man" John Perkins and Canadians Naomi Klein and Joel Bakan, a law professor and author of "The Corporation," are four commentators who make their own observations along these lines. (Batra is too much of a market watcher to fit in here.) They see modern day corporatism as relentlessly anti-democratic and anti-humanitarian.
Air America's anti-globalist Thom Hartmann supports tariffs based on wage differentials, strong unions, trial lawyers, and single payer health care. MSNBC's anti-globalist Pat Buchanan explicitly supports Ravi Batra's version of protectionism and the sometimes primary season presidential candidate has warmed up to labor unions over the years. Buchanan still opposes those trial lawyers and government paid health care.