23 August 2009

Your Money or Your Life!

John Maxwell

Like an eighteenth century highwayman the world financial system has levelled a gun at Jamaica's head and told us to "Stand and Deliver" – 'hand over your valuables or else!'
The Fitch Ratings Agency has told the government: Accept whatever conditionalities the IMF imposes or we will make it impossible for you to borrow money and you will default on your debts.
Since there is no Chapter 11 bankruptcy protection for countries it is my view and has been for years that we should default, divert the interest payments from Cayman and Zurich to the Consolidated Fund and start making ourselves economically autonomous. At astroke we could double or triple the money available for government expenditure.
What will the usurers do? Seize King's House?
In the old uncensored versions of the highwayman stories, the first bandit stops the stage coach, instructs the women to tie up the men and then each other. Then, at his leisure, he and his band would go through everyone's pockets and purses. In the old tales sometimes the highwayman would ride off with his loot, leaving his victims helpless until a second highwayman – a confederate – would come upon the scene and 'realising' there was no loot to be had, would avail himself of the pleasures offered by the helpless women and girls while their husbands or brothers or fathers watched, helpless to intervene.
Something very like that is now happening in Haiti and will soon begin to happen here. The criminal consequences of globalisation are beginning to be felt and not the least of them is loss of autonomy and sovereignty, the enslavement of the economy and the expropriation of the country's wealth.
Over the last forty years the decolonisation of Empires has left hundreds of millions of people exposed to new, sophisticated buccaneers and freebooters, sporting Thatcher/Reagan/Ayn Rand letters of marque, giving them the authority to loot and plunder using techniques which would have astonished Sir Henry Morgan, Blackbeard and Lollonais, not to mention King Leopold of Belgium, Sir Basil Zaharoff and even J.P. Morgan and John D Rockefeller.
IN one of the strange paradoxes of capitalist development it is the most resource-rich of the former colonies that are the deepest in misery. Africa, particularly in Nigeria, the Congo, Angola and South Africa are producing rivers of wealth for a few people in Zurich, New York and London. AS in Brazil, Mexico, Venezuela, Bolivia and Colombia, and as in Iraq, Saudia Arabia and that neighbourhood, the native populations watch open-mouthed as learned theoreticians attempt to develop theories to explain their poverty and misery as money is exported by the tanker load from their countries and sympathetic statesmen confide that, next year, or the year after, they will be in a position to help with a little alms. The World Bank says it is dedicated to eradicating poverty and the IMF is supposedly a collaborator in that effort. Yet, it seems fairly clear that Third World poverty will end only when Third World resources are exhausted and the globalisers go home, sometime late in the next millennium.
As Fidel Castro pointed out to the Group of 77 summit in Havana in 2000:
"Economic failure is evident. Under the neoliberal policies, the world experienced a global growth between 1975 and 1998 which hardly amounted to half of that attained between 1945 and 1975 with Keynesian market policies and the state's active participation in the economy."
Castro said that was also true in Latin America where doctrinaire neoliberalism was applied.
"After World War II Latin America ha no debt but today [2000] we owe almost one trillion dollars. This is the region with the highest per capita debt in the world and also the greatest income differences between the rich and the poor.>
There are more poor, unemployed and hungry people in Latin America now than at any other time in history".
The recent implosion of the world financial system exposed almost infinite levels of criminal complicity between various elements of the system. A conservative critic of the system, Martin Wolf of the Financial Times said:
" A fundamental lesson concerns the way the financial system works. Outsiders were aware it had become a gigantic black box. But they were prepared to assume that those inside the box at least knew what was going on. This can hardly be true now. Worse, the institutions that prospered on the upside expect rescue on the downside. They are, alas, only too right to expect this. But this can hardly be a tolerable bargain between financial insiders and wider society. Is such mayhem the best we can expect? If so, how does one sustain broad public support for what appears so one-sided a game?"(Banque de France • International Symposium: Globalisation, inflation and monetary policy • March 2008)
The ratings agencies and the huge worldwide auditing companies turned out to be an integral part of the scam. Prem Sikka, Professor of Accounting at the University of Essex. ,told the Treasury Committee of the British House of Commons :
"I do not think the Big Four accounting firms are fit to conduct public watchdog functions. In my submission I have highlighted how they have been involved in running cartels, tax evasion, bribery, corruption, many other things; it is difficult to see how such entities can actually deliver the public interest function. Maybe that is one of the reasons why people in the market chose not to believe the unqualified audit report when auditors were saying all is well and the marketplace were saying "We do not believe you because you have a particular kind of a track record."
The problem is compounded by the ratings agencies with their own massive conflicts of interest. Professor Joe Stiglitz says:
The incentive structure of the rating agencies also proved perverse. Agencies such as Moody's and Standard & Poor's are paid by the very people they are supposed to grade. As a result, they've had every reason to give companies high ratings, in a financial version of what college professors know as grade inflation. The rating agencies, like the investment banks that were paying them, believed in financial alchemy—that F-rated toxic mortgages could be converted into products that were safe enough to be held by commercial banks and pension funds."
Yet, these are the people who presume to tell us how to run our country. Fidel Castro has for decades been pointing out the system is not only corrupt, but insane.
"The Third World is forced to immobilize financial resources and grow indebted to keep hard currency reserves in the hope that they can be used to resist the attack of speculators … this leads to the paradox that with their reserves, the poor countries are offering cheap long term financing to the wealthiest and most powerful country in the world while such reserves could be better invested in economic and social development."
When Fitch piously expresses the hope that we can reduce our interest rates from the twenties to the teens it doesn't remark on the fact that ordinary homeowner mortgage borrowers in the US can borrow at less than half that.
While Jamaica has never defaulted, it is treated with much less respect than privateers like Donald Trump, a professional gambler and airhead.. Nearly thirty years ago when the Trump group and the Jamaican government were facing cash flow probems and each owed about 4 billion dollars, Trump was able to make an accommodation with his creditors which allowed him to keep his yacht.
We had to give up free education and food subsidies, among other extravagant public expenditures.
If we default it will be a nine day wonder. It will cause hardship to the rich, to the coupon clippers, but will have hardly any effect on the poor unless of course, they insist on using Pampers and buying Pringles popcorn and ice-cream imported from France.
If we tell the bankers that for the next ten years we will be paying them at normal rates of interest we will save half of the money we export to banks in foreign countries.
We would immediately double the amount available for our budget and we could then begin to do what we really need to do, invest in small farmers, in poor people, particularly in women and children, and we could probably cut the murder rate in half, simply by getting all our children in schools and their fathers growing food and employed in building those schools.
Fitch and Moody's and the rest will curse us, as they have been cursing Cuba for half a century. but Cuba's an infant death rate is lower than the US and its educational and health systems. are superior
What exactly, have we got to lose?

Back home

I returned to Jamaica last Wednesday night after 8 months abroad, being treated for advanced lung cancer. I underwent extensive chemotherapy and radiation treatment with the result that a few weeks ago, a CT-PET SCAN could find no trace of the three tumours which had sent me scuttling for treatment.         
I promise in a few weeks, to give you an account of my treatment and the astonishingly kind professionals who delivered it at the Antoni van Leeuwenhoek Hospital/National Cancer Institute in the Netherlands.
This note is simply a first, brief thank you to the many people who have wished me well, prayed for me and celebrated my recovery. And special thanks to my Jamaican doctors, Dr Richard Gomes, my GP, Dr Abeng-Doonquah, daughter of my old friend and PanAfricanist stalwart, Dr Burchell Douglas Abeng-Doonquah, and Dr Roger Irvine, oncologist. In the Netherlands I owe much to the skill, kindness and professionalism of Dr Peter Kunst and Dr. Josie Belderbos and their unfailingly polite, smiling and competent colleagues, doctors, nurses, technicians and assistants.
More anon.    

Copyright ©2009    John Maxwell

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