À procura de textos e pretextos, e dos seus contextos.


Can the Greek People Teach the Central Bankers Economics?

Dean Baker

There is an old maxim that in any bureaucracy people will always rise to the level of their incompetence. This certainly seems to be the case with the European Central Bank (ECB). After totally ignoring the build-up of dangerous housing bubbles in most euro zone countries, as well as the imbalances that supported these bubbles, the ECB now seems intent on punishing the people in many of these countries for its mistakes.
This is the likely result of the policies that it is now pursuing, whether or not this is the intention. The insistence that the heavily indebted countries in the euro zone – Greece, Ireland, Portugal, and Spain – pay off their debt in full will inevitably lead to years of high unemployment in these countries and trillions of dollars of lost output throughout the euro zone as a whole. The budget cuts demanded of these countries will force large reductions in pensions and other social supports at a time when macroeconomic policies ensure that few jobs are available.
It is difficult to see any plausible gain from this pain. If the purpose of the pain is increased respect for fiscal discipline then the guns are pointed in the wrong direction. Ireland, Portugal, and Spain had surpluses or relatively small deficits in the years preceding the crisis. The problems that sank these economies were bad loans in the private sector and the bubbles they fueled.
It is difficult to see what lessons are taught by strangling the public sector. The austerity policies being imposed on these countries are unlikely to put serious dents in the fortunes of those who profited from these speculative bubbles.
Even in the case of Greece, which clearly did have serious fiscal problems, the austerity agenda only deals with half of the problem. Every reckless borrower needs a reckless lender. In this case, the reckless lenders in Germany and France are being bailed out by new loans from the euro zone rescue fund and the International Monetary Fund (IMF). It's not clear what lessons the lenders are learning.
Remarkably, for its larger macroeconomic policy the ECB continues to maintain its fixation on its 2.0 percent inflation target, as though the economic collapse never occurred. This has caused it to already start raising interest rates at a time when more than 15 million people are unemployed throughout the euro zone. (It's worth noting that even at the peak of the crisis the ECB never lowered its overnight rate below 1.0 percent, compared to the near zero rate maintained by the Federal Reserve Board for the last two and a half years.)
The higher interest rate unnecessarily clamps down on badly needed growth throughout the euro zone but its impact on the heavily indebted countries will be especially pernicious. In addition to worsening the employment situation, it is also likely to increase their interest burden as the interest rates paid by these countries will likely rise in step with the ECB rate.
There is a real risk that the ECB's policy may soon make the situation of the governments in the heavily indebted countries untenable. The populations of these countries are clearly willing to endure economic hardship for a period of time, under the belief that this suffering will lead to a better future. However, this prospect is getting more questionable by the day, as the better future gets pushed out ever further in the distance.
The latest projections from the IMF show that Spain's GDP will not recover its pre-crisis peaks until 2013. It will take Ireland until 2015, and Portugal and Greece until 2016. Furthermore, given the consistent patterns of downgrading growth projections over the last few years, it is likely that it will take these countries even longer to regain their lost output on their current policy path.
This raises the possibility that governments of the heavily indebted countries will soon find it impossible to agree to the never-ending demands for austerity coming from the ECB and the IMF. The refusal to come to terms will inevitably lead to a financial crisis, as anyone with assets will seek to withdraw them from the banks of a country facing such a standoff.
In such circumstances, leaving the euro and re-introducing a domestic currency becomes a realistic prospect. No government would ever go this route unless it had no choice, because it is almost inconceivable that it could re-introduce a domestic currency without bringing on a financial crisis. However, if the crisis is already there, then the domestic currency route would suddenly look much more appealing.
Argentina provides the model for this situation. Its government had supposedly created an unbreakable peg between its currency and the dollar in the early '90s. When interest rates in the United States rose in the late '90s, and the value of the dollar rose as well, Argentina's situation became untenable.
After negotiating a series of austerity packages with the IMF, the resulting recession and cutbacks in public services created enough civil unrest that the country could go no further. With the situation spiraling out of control, the government had no choice but to break its unbreakable peg. The resulting financial crisis sent the economy spiraling downward. However, it stabilized after three months, and began leaping forward six months after the break. It continued to have strong growth for the next six years until the world economic crisis brought Argentina's economy to a standstill in 2009.
If the ECB and IMF do not ease up on their conditions, they may push the heavily indebted countries down a similar path. Greece is the most likely candidate, having experienced the sharpest fall in output to date and facing the highest burden of debt to GDP. While there is much about Greece's economy that is badly in need of reform, the current austerity policies are not helping them to accomplish this reform.
If Greece were to leave the euro, there would undoubtedly be considerable short-term pain, but with its own currency it would at least have a route to resume growth in a reasonable period of time. Greece's departure would also pave a path for other countries to follow. This may be the lesson that the ECB needs in order to develop more realistic policies for dealing with the enormous imbalances that it allowed to develop in the last decade. Maybe the ECB bureaucrats can still learn some basic economics before they take Europe's economy even deeper into a hole.


The Militarization of India

Yasmin Qureshi

India is today the world's largest importer of arms. These include fighter jet planes, missiles and radar systems for strategic partnerships and geo-political power. India is also investing in security and surveillance to combat foreign threats and resistance from its own people in places like the Kashmir valley, and the North East and tribal regions of Central India. This provides tremendous opportunity for multi-national corporations to sell and invest in India, a country marching ahead as an economic and military power.
A report from the Stockholm International Peace Research Institute's (SIPRI) March 14, 2011 revealed that India received 9 per cent of the volume of international arms transfers during 2006–10. The international consultancy firm KPMG estimates that India will sign military contracts worth $112 billion by 2016.
This year India increased annual defense spending by about 11.6 percent to $36 billion in order to modernize the armed forces to counter the military inflation and strategic threats posed by China's rapidly expanding military capabilities..
In sharp contrast, allocation for agri culture and allied activities was reduced by 2 percent and allocation of non-plan expenditures on all social services declined by 14 percent from approximately $7.8 billion in 2009-10 to $6.6 billion for 2010-11. The World Bank estimates that 80% of India's population lives on less than $2 a day, comparable to sub-Saharan Africa.

Corporate Diplomacy to Secure Arms Deals

With assistance from their governments, arms corporations in countries such as Russia, US, France, Britain, Sweden and Israel are competing to procure million and billion dollar deals with India.
Last year India saw an unprecedented series of diplomatic visits from head of states of nuclear and defense powers. Notably chief executives of major nuclear and defense corporations had escorted the head of states on their visits. British Prime Minister David Cameron's visit to India in July was followed by US President Obama's in November and by French President Nicolas Sarkozy's in December.
A $779 million contract was signed for 57 BAE Systems Hawk advanced jet trainers for the Indian military during Cameron's visit. Engine maker Rolls-Royce clinched a $280 million deal to supply engines for the jet trainers for the Indian air force and navy. Seven agreements in key areas such as defense, space and nuclear energy were signed during Sarkozy's visit.
US President Obama and Secretary of State Hilary Clinton's visits in 2010 were also about strengthening economic and strategic partnerships. Twenty deals totaling nearly $10 billion dollars in U.S. exports were signed during the President's visit. Following that visit, the US reformed its export control regime and removed key Indian defense and civil space entities from U.S. restricted lists to help boost high technology exports and allow for enhanced defense and space cooperation with India.
The close nexus of corporations and governments is evident from the resignation of Timothy J. Roemer as US Ambassador to India on April 28, 2011, soon after the announcement that two US corporations, Boeing and Lockheed Martin had lost the race for procuring a $10 billion contract to supply 126 fighter jets to the Indian Air Force. The US is still hopeful a four billion dollar sale of C17 aircraft will be finalized soon. French company Dassault's Rafale and the Typhoon from the Eurofighter consortium (representing Germany and Spain, Britain's BAE Systems and Italy's Finmeccanica) have been shortlisted.
Speaking at the AmCham Annual General Meeting, New Delhi, then-US Ambassador to India, Timothy J. Roemer said, "On defense, one simply has to look at the growth in defense sales to see how close our two armed forces are becoming. We now have regular exercises across all services that are increasing in size and complexity as our militaries become more familiar with each other," he continued. In October 2009, about 1,000 military personnel from the Indian and US armies participated in one of the largest joint exercises between the two nations. US Stryker combat vehicles, high precision tank killers, and? the Javelin were paired against India's Russian-made T-90 tanks.
The US and European countries are not the only ones building strategic alliances with India. In the last five years India has purchased arms worth nearly $5 billion from Israel, making it Israel's largest arms buyer. The purchases include missiles, radars and drones. Since the establishment of diplomatic relations in 1992, India and Israel have increased cooperation in military and intelligence ventures.
South Asia and the Indian Ocean
South Asia is emerging as an important region both economically and politically. President Obama shifted focus from Iraq to South Asia as soon as he took office in 2008. The strategic alliances in South Asia--with India, China, Pakistan and the US being the key players --are largely to secure control of fossil fuels, minerals, and other natural resources, and the infrastructure such as oil and gas pipelines and ports to import and export them.
The Indian Ocean, a pathway to international trade, is now looked on as part of the inner ring of India's security environment , noted Teresita C. Schaffer in her paper, "Indian Ocean Geostrategic Environment" dated Februrary 2011. She is Senior Advisor with McLarty Associates, a former member of the U.S. Foreign Service and one of the State Department's principal experts on South Asia.
Schaffer wrote, "India imports some 70 percent of its oil and gas, and some two-thirds of this travels through the Indian Ocean." She revealed that the Indian navy accounted for a relatively modest share of Indian military spending of about 18 percent in 2008 but has a significantly larger, 24 percent share of new procurements. Recent investments include Boeing's P-8 Poseidon Anti Submarine Warfare/Maritime Surveillance Aircraft, Israeli UAVs and Scorpene submarines made by French and Spanish companies.
To counter the growing India-US strategic alliances, Pakistan and China are consistently collaborating on the Gwadar Region, a port in Pakistan's Balochistan province, which is bordered on the northwest by Afghanistan and on the southwest by Iran. It is bound by the Persian Gulf in the west and the Gulf of Oman in the southwest.
The deep sea port is strategically located near the Straits of Hormuz, through which 80 percent of the world's energy exports flow. The Gwadar port is vital to give China access to the sea for its western provinces. Given is proximity to Iran, the US considers Gwadar a potential military base. Indian security planners are concerned that it allows Chinese a safe passage to the Arabian Sea fearing it might become a naval outpost of China.
To counter Sino-Pak collaboration, India brought Afghanistan and Iran into an economic and strategic alliance. Iranians are already working on Chabahar port in Sistan-Baluchistan, which will be accessible for Indian imports and exports with road links to Afghanistan and Central Asia. India is helping build a 200-kilometer road that will connect Chabahar with Afghanistan. Once completed, Indians will use this access road to the port for their imports and exports to and from Central Asia.
More Focus on Internal Security and Surveillance
While many of the above deals and strategic alliances are geared towards India's aspirations of being a global power competing with neighboring China, India also relies on armed forces to control many of its own people.

The insurgency in the Kashmir valley in the North and states of Manipur, Nagaland, Assam and Tripura in North-East and the war against the poor in the tribal regions of Central India to capture their mineral-rich land for corporate interests has resulted in increased use of the Armed Forces in Internal Security.
The Kashmir valley with more than 650, 000 military and para-military troops and the North-Eastern states are the most militarized zones in the world, . The military has not been called on to combat the insurgency in the tribal regions so far. Instead, India is relying on the para-military and police and the Central Industrial Security Force (CISF) of more than 100,000 armed forces which normally protect government property and employees. These forces are deployed to guard the iron ore mining facilities of the National Mineral Development Corporation (NMDC).
India is particularly edgy about this summer in the Kashmir valley and is gearing up for an expected 4th successive summer of massive people's protests for the right to self determination. It fears that the Arab revolutions may result in more media attention on protests in the Kashmir valley's this year, which would dent India's image as the largest democracy in the world.
A new set of Standard Operating Procedures (SOPs) encouraging the use of non-lethal weapons for crowd control all across the country have been announced. The new non-lethal weapons include controversial Taser guns, pellets and pepper balls. The US-made Taser guns can discharge a nine-volt current that momentarily immobilizes a protester so that he can be taken into custody without causing any grievous hurt. The pepper balls can discharge highly irritating fumes that will force the mobs to disperse and the Pump Action Gun (PAG) will fire pellets at the protesters, with minimum chances of causing deaths. A recent report also announced India's Special Forces are being equipped with Israeli-made Tavor Assault Rifles.
After taking over as the Home Minister of the Government of India after the November 26, 2008 terrorist strikes in India's financial capital, Mumbai,
P.Chidambaram considerably revamped the counter-terrorism machinery and improved co-ordination on counter-terrorism with India, Israel and the US.

In 2009 India and Israel began a joint defense working group focused on counter-terrorism and intelligence sharing, delivery of weapons and enhancement of cooperation in research and development. A year earlier Indian military officials had visited Israel to discuss joint weapons development projects, additional sales of Israeli equipment to the Indian military, and counter-terrorism strategies.
Back in 2002 The Electronics Corporation of India Ltd (ECIL) signed an MOU with Israel's GM Advanced Fencing and Security Technologies Ltd. (GMAFSTL) for undertaking projects on wide range of electronic & electric security fencing and security systems. ECIL-Rapiscan Ltd., a joint venture of ECIL and Rapiscan of USA, markets and executes the projects in India. The advanced electric perimeter protection system protects threats against airport and defense security installations.
Deccan Herald reported on March 1, 2011 that Israeli Ambassador to New Delhi, Mark Sofer told a group of Indian journalists he identified India and Israel as the two countries who viewed the world with very similar eyes at a luncheon hosted by the US-based Israel Project.'
"We often feel that some of the problems that we are facing are mutual to us both. This was felt by both of us in Mumbai atrocities of 2008," he said referring to the terrorist attacks by the Pakistan-based Lashkar -e-Toiba. "Also our society is free and democratic and perhaps (it is) an island in non-democratic oceans," he said, adding that Israel has one of its most dynamic relationships with India. Sofer cited experts to say that the Indo-Israel trade will triple within four years once a bilateral free trade agreement is signed. "That would bring us to trading about USD 15 billion; which will be of the same size of that with the European Union," he said.
"Israel's homeland security systems are very advanced and India can benefit from your experience. We are friendly countries and strategic partners based on sound fundamental principles. We have to cooperate to the fullest extent to combat the menace of terror," Minister of State for Commerce and Industry, Jyotiraditya Scindia said in February 2010.

Israel will sell 50 unmanned spy drones worth $220 m to India, according to an April 4, 2011 article on Defense India. The Heron drones can fly at an altitude of 30,000 feet, are equipped with camera and surveillance technology. They would be put to use carrying out reconnaissance missions on India's mountainous borders with China and Pakistan and along India's long coastal waters.
India is also collaborating with the US on counterterrorism. A five-day Law Enforcement Executive Development Seminar focusing on counterterrorism, crisis response and megacity policing was held on April 22 this year by The U.S. Federal Bureau of Investigation (FBI) in partnership with the Indian Ministry of Home Affairs in Los Angeles, California. Speaking at the seminar, Assistant Director-in-Charge Steven M. Martinez remarked, "Today's global security threats require the fusing of international capabilities to counter existing and emerging threats. Through international exchanges, such as this week's U.S-India Counterterrorism Seminar, we establish first-name relationships with our international police and intelligence partners. And in a time of crisis, that friendship fosters an immediate and effective response."

Many of the policies and expenditures on defense and security are driven by the vested interests of the ruling class instead of the social and economic needs of the majority, surviving on under $2 a day. According to Forbes magazine, the combined wealth of India's 100 richest people in 2009 was $276 billion, almost a quarter of the country's nation al income. As the number of billionaires nearly doubled, from 27 in 2008 to 52 in 2009, 33 percent of the adult population of India suffers from chronic under-nutrition according to The National Nutrition Monitoring Bureau (NNMB).

The disparity in standards of living is leading to a growing market for private security to guard banks, malls and private corporations and hospitals. A report released by the Associated Chambers of Commerce and Industry (Assocham) last year revealed that the private security industry in India employs more than 5.5 million professionals. The industry is estimated at approximately $4.9 billion and has been consistently growing at over 25 percent every year over the past 5 -7 year employing four times the police and armed forces combined.

In an effort to enable the youth of India to gain leadership positions in the fast growing private security industry and to bring the best practices of security intelligence and management to the industry and the nation, the International College for Security Studies (ICSS) and Israeli College for Security and Investigations (ICSI) signed a memorandum of understanding for setting up of a security training and intelligence college at New Delhi in August 2010 according to Homeland Security Newswire.

As India continues to grow as a geo-political power in South Asia, internally it is using well armed and equipped military, police and private armies to curb any resistance challenging its policies and laws favoring certain classes and corporate interests. Joint collaborations and multi-million dollar deals are helping it align strategically with economic and military global powers of the world, cooperating to control and secure resources for a few.

Thanks to M.V. Ramana for encouraging me to write on this topic and to Parvaiz, Balaji, and Charlotte for their constructive critique.


Breakup of the Eurozone?

Michael Hudson

Last month Iceland voted against submitting to British and Dutch demands that it compensate their national bank insurance agencies for bailing out their own domestic Icesave depositors. This was the second vote against settlement (by a ratio of 3:2), and Icelandic support for membership in the Eurozone has fallen to just 30 per cent. The feeling is that European politics are being run for the benefit of bankers, not the social democracy that Iceland imagined was the guiding philosophy – as indeed it was when the European Economic Community (Common Market) was formed in 1957.
By permitting Britain and the Netherlands to blackball Iceland to pay for the mistakes of Gordon Brown and his Dutch counterparts, Europe has made Icelandic membership conditional upon imposing financial austerity and poverty on the population – all to pay money that legally it does not owe. The problem is to find an honest court willing to enforce Europe’s own banking laws placing responsibility where it legally lies.
The reason why the EU has fought so hard to make Iceland’s government take responsibility for Icesave debts is what creditors call “contagion.” Ireland and Greece are faced with much larger debts. Europe’s creditor “troika” – the European Central Bank (ECB), European Commission and the IMF – view debt write-downs and progressive taxation to protect their domestic economies as a communicable disease.
Like Greece, Ireland asked for debt relief so that its government would not be forced to slash spending in the face of deepening recession. “The Irish press reported that EU officials ‘hit the roof’ when Irish negotiators talked of broader burden-sharing. The European Central Bank is afraid that any such move would cause instant contagion through the debt markets of southern Europe,” wrote one journalist, warning that the cost of taking reckless public debt onto the national balance sheet threatened to bankrupt the economy.
Europe – in effect, German and Dutch banks – refused to let the government scale back the debts it had taken on (except to smaller and less politically influential depositors). “The comments came just as the EU authorities were ruling out investor ‘haircuts’ in Ireland, making this a condition for the country’s €85bn (£72bn) loan package. Dublin has imposed 80 percent haircuts on the junior debt of Anglo Irish Bank but has not extended this to senior debt, viewed as sacrosanct.” (Ambrose Evans-Pritchard, Daily Telegraph.)
At issue from Europe’s vantage point – at least that of its bankers – is a broad principle: Governments should run their economies on behalf of banks and bondholders. They should bail out at least the senior creditors of banks that fail (that is, the big institutional investors and gamblers) and pay these debts and public debts by selling off enterprises, shifting the tax burden onto labor. To balance their budgets they are to cut back spending programs, lower public employment and wages, and charge more for public services, from medical care to education.
This austerity program (“financial rescue”) has come to a head just one year after Greece was advanced $155 billion bailout package in May 2010. Displeased at how slowly the nation has moved to carve up its economy, the ECB has told Greece to start privatizing up to $70 billion by 2015. The sell-offs are to be headed by prime tourist real estate and the remaining government stakes in the national gambling monopoly OPAP, the Postbank, the Athens and Thessaloniki ports, the Thessaloniki Water and Sewer Company and the telephone monopoly. Jean-Claude Juncker, Luxembourg’s Prime Minister and chairman of the Eurozone’s group of finance ministers, warned that only if Greece agreed to start selling off assets (“consolidating its budget”) would the EU agree to stretch out loan maturities for Greek debt and “save” it from default.
The problem is that privatization and regressive tax shifts raise the cost of living and doing business. This makes economies less competitive, and hence even less able to pay debts that are accruing interest, leading toward a larger ultimate default.
The textbook financial response of turning the economy into a set of tollbooths to sell off is predatory. Third World countries demonstrated its destructive consequences from the 1970s onward under IMF austerity planning. Europe is now repeating the same shrinkage.
Financial power is to achieve what military conquest had done in times past. Pretending to make subject economies more “competitive,” the aim is more short-run: to squeeze out enough payments so that bondholders (and indeed, voters) will not be obliged to confront the reality that many debts are unpayable except at the price of making the economy too debt-ridden, too regressively tax-ridden and too burdened with rising privatized infrastructure charges to be competitive. Spending cutbacks and a regressive tax shift dry up capital investment and productivity the long run. Such economies are run like companies taken over by debt-leveraged raiders on credit, who downsize and outsource their labor force so as to squeeze out enough revenue to pay their own creditors – who take what they can and run. The tactic attack of this financial attack is no longer overt military force as in days of yore, but something less costly because its victims submit more voluntarily.
But the intended victims of predatory finance are fighting back. And instead of the attacker losing their armies and manpower, it is their balance sheets that are threatened – and hence their own webs of solvency. When Greek labor unions (especially in the public enterprises being privatized), the ruling Socialist Party and leading minority parties rejected such sacrifices, Eurozone officials demanded that financial planning be placed above party politics, and demanded “cross-party agreement on any overhaul of the bail-out.”  In other words, Greece should respond to its wave of labor strikes and popular protest by suspending party politics and economic democracy. “The government and the opposition should declare jointly that they commit to the reform agreements with the EU,” Mr. Juncker explained to Der Spiegel.
Criticizing Prime Minister George Papandreou’s delay at even starting to sell state assets, European financial leaders proposed a national privatization agency to act as an intermediary to transfer revenue from these assets to foreign creditors and retire public debt – and to pledge its public assets as collateral to be forfeited in case of default in payments to government bondholders. Suggesting that the government “set up an agency to privatize state assets” along the lines of the German Treuhandanstalt that sold off East German enterprises in the 1990s,” Mr. Juncker thought that “Greece could gain more from privatizations than the €50 billion ($71 billion) it has estimated” (Evans-Pritchard).
European bankers had their eye on the sale as much as $400 billion of Greek assets – enough to pay off all the government debt. Failing payment, the ECB threatened not to accept Greek government bonds as collateral. This would prevent Greek banks from doing business, wrecking its financial system and paralyzing the economy. This threat was supposed to make privatization “democratically” approved – followed by breaking union power and lowering wages (“internal devaluation”). “Jan Kees de Jager, Dutch finance minister, has proposed that any more loans to Greece should come with collateral arrangements, in which European state lenders would take over Greek assets in the event of a sovereign default.” (Peter Spiegel, Financial Times.)
The problem is that ultimate default is inevitable, given the debt corner into which governments have recklessly deregulated the banks and cut property taxes and progressive income taxes. Default will become pressing whenever the ECB may choose to pull the plug.
The ECB makes governments unable to finance their spending
Introduction of the euro in 1999 explicitly prevented the ECB or any national central bank from financing government deficits. This means that no nation has a central bank able to do what those of Britain and the United States were created to do: monetize credit to domestic banks. The public sector has been made dependent on commercial banks and bondholders. This is  a bonanza for them, rolling back three centuries of attempts to create a mixed economy financially and industrially, by privatizing the credit creation monopoly as well as capital investment in public infrastructure monopolies now being pushed onto the sales block for bidders – on credit, with the winner being the one who promises to pay out the most interest to bankers to absorb the access fees (“economic rent”) that can be extracted.
Politics is being financialized while economies are being privatized. The financial strategy was to remove economic planning from democratically elected representatives, centralizing it in the hands of financial managers. What Benito Mussolini called “corporatism” in the 1920s (to give it its polite name) is now being achieved by Europe’s large banks and financial institutions – ironically (but I suppose inevitably) under the euphemism of “free market economics.”
Language is adapting itself to reflect the economic and political transformation (surrender?) now underway. Central bank “independence” was euphemized as the “hallmark of democracy,” not the victory of financial oligarchy. The task of rhetoric is to divert attention from the fact that the financial sector aims not to “free” markets, but to place control in the hands of financial managers – whose logic is to subject economies to austerity and even depression, sell off public land and enterprises, suffer emigration and reduce living standards in the face of a sharply increasing concentration of wealth at the top of the economic pyramid. The idea is to slash government employment, lowering public-sector salaries to lead private sector wages downward, while cutting back social services.
The internal contradiction (as Marxists would say) is that the existing mass of interest-bearing debt must grow, as it receives interest – which is re-invested to earn yet more interest. This is the “magic” or “miracle” of compound interest. The problem is that paying interest diverts revenue away from the circular flow between production and consumption. Say’s Law says that payments by producers (to employees and to producers of capital goods) must be spent, in the agregate, on buying the products that labor and tangible capital produces. Otherwise there is a market glut and business shrinks – with the financial sector’s network of debt claims bearing the brunt.
The financial system intrudes into this circular flow. Income spent to pay creditors is not spent on goods and services; it is re-invested in new loans, or on stocks and bonds (assets in the form of financial and property claims on the economy), or increasingly on “gambling” (the “casino capitalism” of derivatives, the international carry trade (that is, exchange-rate and interest-rate arbitrage) and other financial claims that are independent of the production-and-consumption economy. So as financial assets accrue interest – bolstered by new credit creation on computer keyboards by commercial banks and central banks – the financial rake-off from the “real” economy increases.
The idea of paying debts regardless of social cost is backed by mathematical models as complex as those used by physicists designing atomic reactors. But they have a basic flaw simple enough for a grade-school math student to understand: They assume that economies can pay debts growing exponentially at a higher rate than production or exports are growing. Only by ignoring the ability to pay – by creating an economic surplus over break-even levels – can one believe that debt leveraging can produce enough financial “balance sheet” gains to pay banks, pension funds and other financial institutions that recycle their interest into new loans. Financial engineering is expected to usher in a postindustrial society that make money from money (or rather, from credit) via rising asset prices for real estate, stocks and bonds.
It all seems much easier than earning profit from tangible investment to produce and market goods and services, because banks can fuel asset-price inflation simply by creating credit electronically on their computer keyboards. Until 2008 many families throughout the world saw the price of their home rise by more than they earned in an entire year. This cuts out the troublesome M-C-M’ cycle (using capital to produce commodities to sell at a profit), by M-M’ (buying real estate or assets already in place, or stocks and bonds already issued, and waiting for the central bank to inflate their prices by lowering interest rates and untaxing wealth so that high income investors can increase their demand for property and financial securities).
The problem is that credit is debt, and debt must be paid – with interest. And when an economy pays interest, less revenue is left over to spend on goods and services. So markets shrink, sales decline, profits fall, and there is less cash flow to pay interest and dividends. Unemployment spreads, rents fall, mortgage-holders default, and real estate is thrown onto the market at falling prices.
When asset prices crash, these debts remain in place. As the Bubble Economy turns into a nightmare, politicians are taking private (and often fraudulent) bank losses onto the public balance sheet. This is dividing European politics and even threatening to break up the Eurozone.
Breakup of the Eurozone?
Third World countries from the 1960s through 1990s were told to devalue in order to reduce labor’s purchasing power and hence imports of food, fuel and other consumer goods. But Eurozone members are locked into the euro. This leaves only the option of “internal devaluation” – lowering wage rates as an alternative to scaling back payments to creditors atop Europe’s economic pyramid.
Latvia is cited as the model success story. Its government slashed employment and public sector wages fell by 30 per cent in 2009-10. Private-sector wages followed the decline. This was applauded as a “success story” and “accepting reality.” So now, the government has put forth a “balanced budget amendment,” to go with its flat tax on labor (some 59 percent, with only a 1 percent tax on real estate). Former U.S. neoliberal presidential candidate Steve Forbes would find it an economic paradise.
“Saving the euro” is a euphemism for governments saving the financial class – and with it a debt dynamic that is nearing its end regardless of what they do. The aim is for euro-debts to Germany, the Netherlands, France and financial institutions (now joined by vulture funds) are to preserve their value. (No haircuts for them). The price is to be paid by labor and industry.
Government authority is to lose most of all. Just as the public domain is to be carved up and sold to pay creditors, economic policy is being taken out of the hands of democratically elected representatives and placed in the hands of the ECB, European Commission and IMF.
Spain’s unemployment rate of 20 per cent, just a bit more than in the Baltics, with nearly twice as high an unemployment rate among recent school graduates. But as William Nassau Senior is reported to have said when told that a million Irishmen had died in the potato famine: “It is not enough!”
Can anything be enough – anything that works for more than the short run? What “helping Greece remain solvent” means in practice is to help it avoid taxing wealth (the rich aren’t paying) and help it roll back wages while obliging labor to pay more in taxes while the government (i.e. “taxpayers,” a.k.a. workers) sells off public land and enterprises to bail out foreign banks and bondholders while slashing its social spending, industrial subsidies and public infrastructure investment.
One Greek friend in my age bracket has said that his private pension (from a computing company) was slashed by the government. When his son went to collect his unemployment check, it was cut in half, on the ground that his parents allegedly had the money to support them. The price of the house they bought a few years ago has plunged. They tell me that they are no more eager to remain part of the Eurozone than the Icelandic voters showed themselves last month.
The strikes continue. Anger is rising. When incoming IMF head Christine Lagarde was French trade minister, she suggested that: “France had to revamp its labor code. Labor unions and fellow ministers balked, and Ms. Lagarde backtracked, saying she had expressed a personal opinion.” This opinion is about to become official policy – from the IMF that was acting as “good cop” to the ECB’s “bad cop.”
I suppose that all that really is needed is for people to understand just what dynamics are at work that make these attempts to pay in vain. The creditors know that the game is up. All they can do is take as much as they can, as long as they can, pay themselves bonuses that are “free” from recapture by public prosecutors, and run to their offshore banking centers.


Careening Toward a Third Depression: Save the Economy, Hike the Deficit!

Michael Hudson

How do you light a fire under Congress? How do you get these guys to do what they're paid to do?
We're 5 years into this slump, millions of people have lost their homes and jobs, 44 million people are on food stamps, the economy is in the tank, and congress won't lift a finger to help. What's that all about? You'd think that the revision in GDP and the uptick in unemployment claims would set off alarms on Capitol Hill. But it hasn't. They just shrug it off and move on. What do they care? They get their fat paycheck one way or another, so what difference does it make to them? Besides, if they play their cards right, they'll nab a 6-figure lobbying job as soon as they retire and spend the rest of their lives working on their chip-shot and swilling single-malt at the club with their moneybags friends. Doesn't that piss you off?
Congress just doesn't seem to "get it". They don't understand what people are going through; how maxed out they are. We're in the middle of a Depression and all they want to do is score points playing political circlejerk by stonewalling the debt ceiling or jacking-around with Medicare. Meanwhile, unemployment is on the rise (Initial claims rose to 424,000 on Thursday), GDP is falling (1Q GDP revised to 1.8%), durable goods are down 3.6 percent in April, the market is topping out, business investment is flat, Europe's on the ropes, Japan is in a historic slump, China is overheating, the output gap is as wide as it was 6 quarters ago, bank balance sheets are bleeding red from falling home prices and non-performing loans, and the housing market is crashing.
Did I miss something?
Oh yeah, and the Fed's goofy QE2 program is winding down, which means that the last drop of monetary stimulus will be wrung-out by the end of June. That ought to be good for stocks.
So, excuse me for asking, Mr. Bigshot Congressman, but would you mind lending a hand? A little stimulus would be nice. You know, just enough so we can get a job and feed the kids. And if you're worried about the deficits; don't be. They're not a problem. That's just more GOP scaremongering. Here's how economics professor Bradford DeLong sums it up:
"The biggest problem generated by this right now is that Washington DC's focus on the Dingbat Kabuki theater of the long-run fiscal stability of America is keeping it from taking any effective steps to use government to boost employment and output now. And things aren't helped by the fact that the way the rescue of the banking system was carried out convinced a lot of people that stimulus policies exist to enrich the top 1% of Americans at the expense of everybody else.
This means that our hopes for economic recovery right now rest not on any government boost to aggregate demand--whether through fiscal, monetary, or banking policy--but rather on the natural equilibrium-restoring full-employment achieving market forces of the economy, especially in the labor market.
And so we are in trouble: right now there are no signs that the economy is crawling up back to anything like full employment on its own. ... The economy will grow, but we won't close the gap between actual and potential output. We will not for a long time to come get back to the 62 to 64% of the adult population having jobs that we thought was normal back in the decades of the 2000.
And that is the depressing overall macroeconomic picture. I wish I could paint a better one....("DeLong: The Economic Outlook as of May 2011", Economist's View)
Deficits aren't the problem, they're the solution. The government needs to increase spending to make up for the loss of activity in the private sector, otherwise, we're back in the soup. But, here's the good part; the government can borrow at rates that are lower than ever. Just look at the bond market. The 10-year is stuck at 3.12. That means that money is cheap because no one is borrowing, because, well, because the economy is dead-in-the-water. It's like Treasuries are yelling, "Wake up, you idiots, we're in a Depression!"
Besides, deficit spending isn't always a bad thing anyway. Just ask a guy who's been out of work for 99 weeks how much he cares about deficits. Not much, I'll bet. All he cares about is getting a job and paying the bills. Here's a clip from economist Mark Thoma who explains how deficits can actually rev up the economy:
"When the economy goes into recession, deficit spending through tax cuts or the purchase of goods and services by the government can stop the downward spiral and help to turn the economy back around. Thus, deficits can help us to stabilize the economy. In addition, as the economy improves due to the deficit spending the outlook for businesses also improves, and this can lead to increased investment, an effect known as crowding in. Deficits also allow us to purchase infrastructure and spread the bills across time similar to the way households finance the purchase of a car or house, or the way local governments finance schools with bond issues." (Government Deficits: The Good, the Bad, and the Ugly, Mark Thoma, CBS Moneywatch)
Deficits are just a way of investing in the future, like student loans. You don't hear anyone crybabying about paying for college, do you? No, because it improves their chances for making more money in the future. Sometimes you have to take on a little debt to create better opportunities for yourself. That's just the way it is. It's the same with the economy, the deficits are a bridge to the next credit expansion. But once things are up-and-running and revenues increase, then the government can throttle-back on spending and balance the budget. That's how we've always done it in the past, until we started listening to the Voodoo crackpots, that is. Besides, if we don't increase the deficits now and put people back to work fast, we're going to be stuck in this "underperforming" funk for a very long time. So, we're just shooting ourselves in the foot.
How did we get to where we are today?
Well, when the financial system crashed, the economy plunged and then reset at a lower level of output. So--while we're no longer in freefall--we're still no where near where we should be. And, guess what, we can't get back to trend when 9% of the workforce (16.5% underemployed) is on the sidelines. We have to put people back to work and get them spending. That's the only way to boost demand and kickstart the economy. Of course, big business doesn't mind the current policy, because more of the profits from productivity go to them during a sluggish recovery. So, they're just fine with the way things are right now. They also like the fact that high unemployment puts more pressure on wages. CEO's love that part.
So, how dire is the situation right now?
Well, consider this: QE2 ends on June 30, right? But according to economist David Rosenberg, there's a "89% correlation between the Fed's balance sheet and the movements in the S&P 500 over the past two years." So when the Fed stops purchasing US Treasuries, then stocks will retreat.
Add that to the fact that the states are cutting costs and laying off state workers at record pace to balance their budgets. That just increases deflationary pressures. When money is drained from the system, activity slows, demand weakens, revenues shrink, deficits bulge, and more people are laid off. It's a vicious circle.
Here's how Paul Krugman breaks it down on his blog this week:
"Last year I warned that we seemed to be heading into the "Third Depression" — by which I meant a prolonged period of economic weakness:
' Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.
We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.'.....
And nobody in power cares! (Third Depression Watch, Paul Krugman, New York Times)
And that's what makes this political burlesque on Capitoll Hill so excruciating to watch, because it's such a waste. Peoples lives are being ruined for nothing, just because Congress doesn't have the courage to do the right thing. Do you think they'd hesitate if they had to pony-up for another multi-billion dollar weapons system, or another bailout for Wall Street, or more tax cuts for their tycoon friends? Of course not. The only time congress worries about red ink is when it might help working people. Then they throw a major hissyfit, waving their hands overhead and babbling hysterically about the free market. Give me a break. The world's not going to end. The truth is, the rest of the world WANTS us to borrow more because they want to maintain strong demand for their exports and keep their workers busy. That's why they're willing to lend us money so cheap.
So, why don't we oblige them? Why don't we borrow enough money to whittle down unemployment to 4 or 5% and get back on track? After all, we know that fiscal stimulus works, because the non-partisan Congressional Budget Office (CBO) released another report on Wednesday saying that Obama's American Recovery and Reinvestment Act (ARRA) was a booming success.
Here's a clip from the report:
"The economic stimulus package passed by Congress in 2009 raised gross domestic product, created jobs and helped lower the country's unemployment rate this year..... the Congressional Budget Office said Wednesday.
The Obama administration and Congressional Democrats said the American Recovery and Reinvestment Act, passed while the U.S. struggled to emerge from a severe recession, would save or create 3.5 million jobs while cutting taxes, investing in roads, bridges and other infrastructure, extending unemployment benefits and expanding aid to states....
The CBO report out Wednesday said the plan increased the number of people employed by between 1.2 million and 3.3 million, and lowered the unemployment rate by between 0.6 and 1.8 percentage points in the first quarter of 2011.
The stimulus package also raised gross domestic product, the broadest measure of economic output, by between 1.1% and 3.1% in the same period...." ("CBO Says Stimulus Boosted Growth, Will Add More to Deficit", Wall Street Journal)
Okay, so ARRA boosted growth by roughly 2% and added about 2 million new jobs to the workforce just like the administration predicted. So, that settles it, right? We now have solid proof that the program worked, so what are we waiting for? Congress needs to push through a second round of stimulus, put people back to work and get the economy firing on all 6 cylinders. No more foot dragging.


Systematic Violations of Women's Rights - The IMF: Violating Women Since 1945

Christine Ahn, Kavita N. Ramdas

As Dominique Strauss-Kahn, head of the world's most powerful financial institution, the International Monetary Fund (IMF), spends a few nights in Rikers Island prison awaiting a hearing, the world is learning a lot about his history of treating women as expendable sex objects. Strauss-Kahn has been charged with rape and forced imprisonment of a 32-year-old Guinean hotel worker at a $3,000-a-night luxury hotel in New York.
While the media dissects the attempted rape of a young African woman and begins to dig out more information about Strauss-Kahn's past indiscretions, we couldn't help but see this situation through the feminist lens of the "personal is political."
For many in the developing world, the IMF and its draconian policies of structural adjustment have systematically "raped" the earth and the poor and violated the human rights of women. It appears that the personal disregard and disrespect for women demonstrated by the man at the highest levels of leadership within the IMF is quite consistent with the gender bias inherent in the IMF's institutional policies and practice.
Systematic Violation of Women's Human Rights
The IMF and the World Bank were established in the aftermath of World War II to promote international trade and monetary cooperation by giving governments loans in times of severe budget crises. Although 184 countries make up the IMF's membership, only five countries—France, Germany, Japan, Britain, and the United States—control 50 percent of the votes, which are allocated according to each country's contribution.
The IMF has earned its villainous reputation in the Global South because in exchange for loans, governments must accept a range of austerity measures known as structural adjustment programs (SAPs). A typical IMF package encourages export promotion over local production for local consumption. It also pushes for lower tariffs and cuts in government programs such as welfare and education. Instead of reducing poverty, the trillion dollars of loans issued by the IMF have deepened poverty, especially for women who make up 70 percent of the world's poor.
IMF-mandated government cutbacks in social welfare spending have often been achieved by cutting public sector jobs, which disproportionately impact women. Women hold most of the lower-skilled public sector jobs, and they are often the first to be cut. Also, as social programs like caregiving are slashed, women are expected to take on additional domestic responsibilities that further limit their access to education or other jobs.
In exchange for borrowing $5.8 billion from the IMF and World Bank, Tanzania agreed to impose fees for health services, which led to fewer women seeking hospital deliveries or post-natal care and naturally, higher rates of maternal death. In Zambia, the imposition of SAPs led to a significant drop in girls' enrollment in schools and a spike in "survival or subsistence sex" as a way for young women to continue their educations.
But IMF's austerity measures don't just apply to poor African countries. In 1997, South Korea received $57 billion in loans in exchange for IMF conditionalities that forced the government to introduce "labor market flexibility," which outlined steps for the government to compress wages, fire "surplus workers," and cut government spending on programs and infrastructure. When the financial crisis hit, seven Korean women were laid off for every one Korean man. In a sick twist, the Korean government launched a "get your husband energized" campaign encouraging women to support depressed male partners while they cooked, cleaned, and cared for everyone.
Nearly 15 years later, the scenario is grim for South Korean workers, especially women. Of all OECD countries, Koreans work the longest hours: 90% of men and 77% of women work over 40 hours a week. According to economist Martin Hart-Landsberg, in 2000, 40 percent of Korean workers were irregular workers; by 2008, 60 percent worked in the informal economy. The Korean Women Working Academy reports that today 70 percent of Korean women workers are temporary laborers.
Selling Mother Earth
IMF policies have also raped the earth by dictating that governments privatize the natural resources most people depend on for their survival: water, land, forests, and fisheries. SAPs have also forced developing countries to stop growing staple foods for domestic consumption and instead focus on growing cash crops, like cut flowers and coffee for export to volatile global markets. These policies have destroyed the livelihoods of small-scale subsistence farmers, the majority of whom are women.
"IMF adjustment programs forced poor countries to abandon policies that protected their farmers and their agricultural production and markets," says Henk Hobbelink of GRAIN, an international organization that promotes sustainable agriculture and biodiversity. "As a result, many countries became dependent on food imports, as local farmers could not compete with the subsidized products from the North. This is one of the main factors in the current food crisis, for which the IMF is directly to blame."
In the Democratic Republic of Congo (DRC), IMF loans have paved the way for the privatization of the country's mines by transnational corporations and local elites, which has forcibly displaced thousands of Congolese people in a context where women and girls experience obscenely high levels of sexual slavery and rape in the eastern provinces. According to Gender Action, the World Bank and IMF have made loans to the DRC to restructure the mining sector, which translates into laying off tens of thousands of workers, including women and girls who depend on the mining operations for their livelihoods. Furthermore, as the land becomes mined and privatized, women and girls responsible for gathering water and firewood must walk even further, making them more susceptible to violent crimes.
We Are Over It
Women's rights activists around the globe are consistently dumbfounded by how such violations of women's bodies are routinely dismissed as minor transgressions. Strauss-Kahn, one of the world's most powerful politicians whose decisions affected millions across the globe, was known for being a "womanizer" who often forced himself on younger, junior women in subordinate positions where they were vulnerable to his far greater power, influence, and clout. Yet none of his colleagues or fellow Socialist Party members took these reports seriously, colluding in a consensus shared even by his wife that the violation of women's bodily integrity is not in any sense a genuine violation of human rights.
Why else would the world tolerate the unearthly news that 48 Congolese women are raped every hour with deadening inaction? Eve Ensler speaks for us all when she writes, "I am over a world that could allow, has allowed, continues to allow 400,000 women, 2,300 women, or one woman to be raped anywhere, anytime of any day in the Congo. The women of Congo are over it too."
We live in a world where millions of women don't speak their truth, don't tell their dark stories, don't reveal their horror lived every day just because they were born women. They don't do it for the same reasons that the women in the Congo articulate – they are tired of not being heard. They are tired of men like Strauss-Kahn, powerful and in suits, believing that they can rape a black woman in a hotel room, just because they feel like it. They are tired of the police not believing them or arresting them for being sex workers. They are tired of hospitals not having rape kits. They are tired of reporting rape and being charged for adultery in Iran, Pakistan, and Saudi Arabia.
Fighting Back
For each one of them, and for those of us who have spent many years investing in the tenacity of women's movements across the globe, the courage and gumption of the young Guinean immigrant shines like the torch held by Lady Liberty herself. This young woman makes you believe we can change this reality. She refused to be intimidated. She stood up for herself. She fought to free herself—twice—from the violent grip of the man attacking her. She didn't care who he was—she knew she was violated and she reported it straight to the hotel staff, who went straight to the New York police, who went straight to JFK to pluck Strauss-Kahn from his first-class Air France seat.
In a world where it often feels as though wealth and power can buy anything, the courage of a young woman and the people who stood by her took our breath away. These stubborn, ethical acts of working class people in New York City reminded us that women have the right to say "no." It reminded us that "no" does not mean "yes" as the Yale fraternities would have us believe, and, most importantly that no one, regardless of their position or their gender, should be above the law. A wise woman judge further drove home the point about how critically important it is to value women's bodies when she denied Strauss-Kahn bail citing his long history of abusing women.
Strauss-Kahn sits in his Rikers Island cell. It would be a great thing if his trial succeeds in ending the world's tolerance for those who discriminate and abuse women. We cannot tolerate it one second longer. We cannot tolerate it at the personal level, we must refuse to condone it at the professional level, and we must challenge it every time it we see it in the policies of global institutions like the International Monetary Fund.


Mundo - Gregos manifestam-se contra Governo - RTP Noticias, Vídeo

Ministério da Educação paga em duplicado à Parque Escolar

Clara Viana

Para além das escolas, também os serviços centrais do ME estão a pagar rendas à empresa.
O Ministério da Educação está a pagar rendas à empresa pública Parque Escolar pela ocupação dos edifícios da Avenida de 24 de Julho, em Lisboa, que há três anos eram sua propriedade. A Parque Escolar é uma empresa tutelada pelo ME, que foi criada em 2007 para gerir um programa de modernização das escolas secundárias. Este ano, o ministério vai pagar-lhe também cerca de 50 milhões de euros em rendas pelas 103 escolas que já foram objecto de remodelação.

Nem a Parque Escolar, nem o ME revelaram ao PÚBLICO o montante das rendas que estão a ser pagas pelos 18 lotes dos edifícios da 24 de Julho (entre o n.º 134 e o 142) que, em Dezembro de 2010, passaram formalmente para a propriedade da Parque Escolar, uma empresa de capitais exclusivamente públicos. Nestes edifícios estão sediados cinco serviços centrais do ME. A transferência resultou de um negócio que envolveu três entidades públicas: os edifícios foram comprados ao ministério pela empresa pública Estamo, que, por sua vez, os vendeu à Parque Escolar. Nesta operação, a Estamo comprou por 34 milhões de euros e vendeu por 34,3 milhões.

A Estamo é uma empresa do Estado que foi criada para comprar património imobiliário estatal, que depois tenta vender a outras entidades públicas ou privadas. O contrato de promessa de compra e venda dos edifícios da 24 de Julho foi assinado por esta empresa em Dezembro de 2008, mas a escritura da transacção só foi celebrada em Julho do ano passado. Por essa altura já há um ano que a Parque Escolar tinha assinado com a Estamo um contrato de promessa de compra e venda para os mesmos edifícios. A escritura desta transacção foi celebrada em Dezembro passado, também mais de um ano depois de o Ministério da Educação se ter assumido como inquilino da Parque Escolar.

O que aconteceu em Julho de 2009 por via de um despacho da então ministra da Educação, Maria de Lurdes Rodrigues, que entregou a gestão daqueles edifícios à empresa. No relatório e contas relativo a 2009, a Parque Escolar informa que o pagamento das rendas foi adiado para o ano seguinte "por motivos orçamentais". Em 2010, a renda média mensal paga por entidades públicas foi de 10,31 euros por metro quadrado.

Segundo o ME, ao valor das rendas serão acrescidos os encargos com a manutenção e conservação dos edifícios, um montante que se encontra ainda em fase de apuramento. Em resposta a questões do PÚBLICO sobre os imóveis da 24 de Julho, a assessora de imprensa da Parque Escolar fechou assim o que já é um negócio em círculo fechado: "Note-se que, no caso do Ministério da Educação, as rendas dos serviços acabam por reverter como receitas da Parque Escolar, que assim continuam na esfera do Ministério da Educação".

Orçamentos reforçados

Os estatutos da Parque Escolar cingem a sua actividade à gestão e manutenção de escolas públicas. Mas, segundo a empresa, a tutela aprovou em 2008 que a sua acção se estenda à gestão do património do Ministério da Educação, "com vista à sua melhor rentabilização". A Parque Escolar sustenta que a experiência com as escolas secundárias a tornará numa "empresa com elevados parâmetros de serviço na manutenção e conservação do património imobiliário" e que as "mais-valias desta gestão profissional são perfeitamente enquadráveis e de bom senso na gestão de mais alguns edifícios de escritórios que estão hoje ocupados por serviços públicos".

Actualmente, 31 escolas secundárias já passaram formalmente para a propriedade da empresa. Este será o destino das mais de 300 onde a Parque Escolar pretende intervir. Entretanto, 103 já lhe estão a pagar rendas. Para este efeito, o ministério reforçou no mês passado os seus orçamentos. Os pagamentos destinam-se a custear a manutenção e o serviço da dívida da empresa, que ronda os 1,7 mil milhões de euros. Segundo o ME, no próximo ano lectivo não se espera um incremento significativo do valor a pagar, já que grande parte das obras em curso só ficará concluída no segundo semestre de 2012.


C’est le système qui fait défaut

François Leclerc 

Devant le tir de barrage de la BCE qui se poursuit, ou bien parce qu’il en partagent ouvertement les objectifs pour leurs raisons propres, comme les Français, les dirigeants européens s’engouffrent vers la seule porte de sortie qu’il leur reste : la vente du patrimoine grec, afin de rembourser un trou financier que personne ne veut combler, chacun convaincu de ses bonnes raisons. Un nouveau prêt complémentaire pourrait alors permettre de rouler la dette restante, pour voir venir.
La confiance, longtemps accordée aux Grecs, quitte à fermer complaisamment les yeux quand il l’a fallu – comme pour d’autres, et non des moindres – n’est plus au rendez-vous, et le temps presse. Il est donc fortement question, en sous-main, de créer une agence chargée de la vente de ces actifs, qui ne serait plus pilotée par les autorités grecques elles-mêmes mais par des experts. Ce qui s’apparente à une pure et simple saisie, suivie d’une vente dans des conditions douteuses, puisque effectuées dans la précipitation. Il va y avoir de bonnes occasions à saisir, la financiarisation va y trouver son compte.
Les artisans de cette brillante idée seront jugés à l’aune de leurs résultats. Mais en attendant, il n’est pas inutile de revenir encore une fois sur le blocage de la BCE, dont les motifs s’éclaircissent peu à peu.
Rappelons les faits : bien que représentant 5% du PIB de la zone euro, les banques grecques, irlandaises et portugaises ont à elles seules emprunté 242 milliards d’euro à la BCE, soit 55% de l’ensemble des liquidités que la BCE a apporté au système bancaire dans toute la zone euro. N’ayant pas le choix, celle-ci n’a pas été toujours regardante sur la qualité des actifs pris en pension à titre de garantie. Il est aussi estimé que 150 milliards d’euros d’actifs détenus par la BCE à titre de collatéral proviennent des banques grecques … munies de la garantie de l’Etat. Enfin, parmi les 75 milliards d’euros d’obligations d’Etat achetés par la BCE, au moins les deux tiers des titres sont grecs.
L’édifice financier est donc fragile, même si JP Morgan Chase a calculé que l’Eurosystème pourrait faire face à une décote de 50% des obligations grecques, disposant de 81 milliards d’euros de fonds propres en totalité. Mais il n’en serait pas de même si l’Irlande et le Portugal s’engageaient dans la même voie, une reconstitution des fonds propres aux frais des Etats étant alors inévitable.
Cette exposition de la BCE est donc devenue problématique ; ne pouvant arrêter la distribution de ses liquidités aux banques des pays de la zone des tempêtes, elle ne peut céder en retour les actifs pris en pension et menacés d’être dévalués. Elle roule la dette de ces banques, en attendant mieux. Le plan de sauvetage portugais, après l’irlandais, comporte certes un financement destiné aux banques de ces pays – venant alors en substitution de celui de la BCE – mais il s’est déjà révélé insuffisant dans le cas de l’Irlande.
L’impasse dans laquelle se trouve la BCE n’est pas uniquement le produit d’un enchaînement fatal, fait de ses mesures d’injection de liquidité et des achats d’obligations souveraines destinés à parer au plus pressé. C’est, pour aller au fond des choses, l’expression de la faillite d’un système financier reposant sur un endettement grandissant ainsi que sur l’étroite interdépendance de tous ses acteurs. Avec comme clé de voûte une banque centrale qui n’est pas outillée pour faire face à ce déséquilibre. Ou, pour le dire autrement, sur le bon fonctionnement d’une machine à produire de la dette sur laquelle reposait une bonne partie de la prospérité du système financier, et qui pour le coup fait défaut dans son ensemble.
Ce que la crise européenne de la dette publique et privée conjointe est en train de démontrer, c’est que ce qui est en priorité à redouter n’est pas la reprise des jeux dans le grand casino, comme on pouvait le dénoncer. C’est la constatation qu’un engrenage et levier essentiel du système est grippé, et qu’il ne peut pas être réparé avec les moyens envisagés. Aux Etats-Unis, le même phénomène prend une autre forme, mais il est similaire. L’Etat n’est pas en mesure de digérer son sauvetage du système financier, sauf à pratiquer des coupes budgétaires qui sanctionneront le déclin du pays et rendront structurelle l’aggravation de la crise sociale.
Il en ressort deux conséquences :
1/ La croissance économique reposant sur l’endettement est pour partie compromise, ne pouvant pas retrouver les sommets atteints. Elle est donc désormais condamnée à rester réduite dans les pays occidentaux. L’équation sur laquelle repose leur désendettement n’a alors plus de solution.
2/ En menaçant la solidité financière des Etats, le système s’est mis lui-même en danger, car il est en train de perdre son point d’appui financier : la dette souveraine dont le remboursement est désormais entaché d’incertitude.
La situation que nous connaissons a un côté fin de fête avec d’une part une monnaie internationale de référence dont les années sont nécessairement comptées, et de l’autre des obligations souveraines qui ne sont plus le roc sur lequel le système pouvait s’appuyer pour faire levier.
Avec une bourse toujours incertaine, des matières premières dont le cours monte et baisse sans crier gare, sans autre raison qu’une spéculation orchestrée par un nombre très réduit d’intervenants, et un marché monétaire sur lequel les possibilités spéculatives du carry trade connaissent de premières menaces avec l’élévation de barrières réglementaires au sein des pays émergents (même l’OCDE l’admet du bout des lèvres), les marchés cherchent où placer leurs gigantesques liquidités, les obligations devenues à leur tour suspectes. Le marché des obligations sécurisées, que les banques émettent en ce moment à tour de bras afin de renforcer leurs fonds propres, n’étant pas en mesure de répondre à l’offre…
Annoncée comme résultant d’une surproduction de biens et de services associée à un chômage structurel grandissant, la crise aboutit à une surproduction de capitaux, également à la recherche de leur emploi en quelque sorte…
Le système financier est donc menacé par une singulière situation dont il est lui-même à l’origine. Il a réussi à conserver la maitrise de ses instruments spéculatifs à fort rendement, mais il a lui même sapé le socle qui lui est nécessaire afin de se reposer sur des actifs de qualité, avec un moindre rendement mais de tout repos. Il est parvenu à largement se défausser de sa dette, mais celle-ci ne peut être comme espéré digérée et menace de se représenter à lui.
Que peut faire dans l’immédiat la BCE ? La stratégie qu’elle défend repose sur trois piliers : éviter que les créanciers privés de la dette publique ne soient atteints par une décote, obtenir que les Etats se substituent à elle pour intervenir sur le marché obligataire (via leur fond de stabilité européen), et parvenir à ce qu’ils adoptent un régime de sanctions automatiques en cas de dépassement de leurs limites de déficit, afin de résorber la dette publique par eux-mêmes. Les plans de sauvetage qu’ils adoptent ayant vocation à financer les banques via les Etats qui en bénéficient afin que la BCE puisse stopper ses injections massives de liquidité sous la forme actuelle.
Ce programme reporte sur les Etats européens la totalité du poids d’une dette que les plus faibles ne parviennent pas à supporter, déjà entrés dans la zone des tempêtes ou pouvant vite y être entraînés. Sa réalisation implique de facto une mutualisation de la dette sous une forme ou sous une autre. Faute de celle-ci, la BCE n’aura comme choix que de laisser éclater la zone euro – aux risques et périls de tous – ou de manger son chapeau.
Dans ce dernier cas, elle affrontera alors la situation que rencontrent déjà la Banque d’Angleterre et la Fed, qui ne s’en dépêtrent pas, bien maigre consolation ! La crise européenne de la dette n’est qu’une version particulière de la crise générale de la dette que connaît le capitalisme financier.

Blog Jorion

Déclassement social, déclassement citoyen

Marc Vasseur

Je vous mets cette étude intéressante que je n’ai pas encore eu le loisir d’approfondir, elle constate que les revenus des « quartiers sensibles » sont largement inférieurs à la moyenne nationale – 1800 euros contre 2900 (revenu du ménage). De là à y voir un lien avec la désespérance citoyenne qui se manifeste par une abstention endémique, c’est un pas que je franchis allègrement.
Il y a quelques mois, une autre étude avait révélé que dans le Nord Pas Calais, 4 villes étaient dans le « top 10″ des villes les plus pauvres.  Cela mériterait quelques heures de débats non ?

Les revenus dans les quartiers sensibles                                                           

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