[Peace-discuss] Euro vs. Dollar

[Paul M. King]

Carl,

Thanks for your reply. Just a few comments.

> ...the extraction of surplus value by US corporations
> world-wide is compatible even with a long-term slide of 
> the American economy...

The extent that this is true is what I'm trying to figure out.
The question of compatibility between corporate profits and
the long-term decline of the American economy is where the
real rub is. This can only be considered compatible in a
scenario where American capital has achieved complete global
fluidity; which means it is no longer really /American/ in any
real or concrete sense because it seems that this capital will
gradually cease to create wealth for American workers.

Paul Craig Roberts has made the same point I was trying to
make. It looks as though we are on our way to a third world
economy.

Naomi Klein has pointed out, however, that the corporation of
the future will make nothing. It will merely be a branding
manufacturer for products made elsewhere. Since widgets
(including 'knowledge widgets') can always be made cheaper
elsewhere, this raises the spectre of our country necessarily
becoming the leader in the public relations industry (a.k.a.
propoganda). It seems that, increasingly, our image, our
culture and the 'idea of america' is all we have to offer the
world. I wonder how long this can sustain a third world economy.

..:: paul king



---- Original message ----
>Date: Mon, 21 Mar 2005 17:22:23 -0600
>From: "C. G. Estabrook" <galliher at alexia.lis.uiuc.edu>  
>Subject: Re: [Peace-discuss] Euro vs. Dollar  
>To: "Paul M. King" <pmking at uiuc.edu>
>Cc: Peace-discuss <peace-discuss at lists.chambana.net>
>
>It does seem clear that the USG has been letting the dollar
slide to
>improve the massive current-account deficit (roughly, the
balance of
>trade) by making US goods cheaper and foreign goods more
expensive.  
>Given that corporate America regards as it greatest enemies
neither
>Islamist terrorists nor the world proletariat but rather its
business
>rivals, the EU and northeast Asia (the world's most dynamic
economy) --
>it's clear that the dollar policy is directed against them
(and they know
>it).
>
>So there may be a strategy -- a part of the general US
strategy of
>maintaining its hegemony -- but it's not clear how well it's
working.  
>The dollar rose to a two-week high today against the euro,
apparently on
>the anticipation of Fed rate rise (as you suggest) -- but
perhaps as you
>say only a short-term fix. Nevertheless a column in today's
Financial
>Times reports a study arguing that the dollar's depreciation
over the last
>two years may be enough to stabilize the US economy in spite
of the
>deficit, in part because of US holdings abroad, equal to
about 70% of GDP
>-- about 70% of that held in foreign currencies.  A dollar
devaluation
>appreciates those assets, perhaps enough to balance the trade
deficit. So
>the strategy may work.
>
>What's clear is that it works if at all by the continuous
transfer of
>wealth from the poor to the rich.  The corporate class
internationalizes
>its assets -- the real meaning of globalization -- and makes
itself more
>able to exploit labor worldwide.  It's clear that the role of
the World
>Bank and the IMF has been imperialist in that respect. 
"Structural
>adjustment" redounds to the credit of world-wide capital while
>impoverishing the citizens of the country so adjusted.
Argentina's
>declaration of economic independence is a worrisome model for
world
>capital.
>
>But the extraction of surplus value by US corporations
world-wide is
>compatible even with a long-term slide of the American
economy. There's a
>good account of that ("America's Has-Been Economy") at
Counterpunch.org
>this week by a former Assistant Secretary of the Treasury in
the Reagan
>administration [sic].
>
>I've thought (tentatively) for a while that Bush 2.2 will
shift the focus
>of Bush 2's first administration, away from Neocon imperial
dreams and
>toward enriching what Bush calls "my base" -- very wealthy
Americans.
>Bush's first administration was about killing, this one is
about looting.
>
>Greg Palast argues that that has happened explicitly in a
struggle between
>the major oil companies and the Neocons (Neocons wanting to
privatize
>Iraqi oil and bust OPEC, Big Oil saying that they like the
present
>arrangement), and that the Neocons have lost -- Wolfowitz to
the Bank and
>Bolton to the UN are exiles.  Maybe...
>
>Regards, Carl
>
>PS -- Doug Henwood of the invaluable Left Business Observer
has a piece
>coming out in the Nation this week on the situation of he
dollar, that
>should bear on this argument.
>
>
>On Mon, 21 Mar 2005, Paul M. King wrote:
>
>> As reported by C.G. Estabrook (see below), the dollar has slid
>> against the euro yet again with a rather significant
>> devaluation that has surprised even Greenspan. This is bad,
>> particularly when exacerbated by disastrous fiscal policies
>> such as the dramatic tax cuts. Central banks have been dumping
>> the dollar by eschewing American bonds for their euro
>> counterpart for several years now (since early 2001, I
>> believe), thereby converting large portions of their reserves
>> into the euro.
>> 
>> If we cannot continue selling bonds (due to a poorly
>> performing dollar), we cannot continue to service our
>> obnoxiously monstrous American debt. Raising interest rates
>> will help somewhat in luring international investors back, but
>> this seems like a short-term fix and will probably mark the
>> beginning of a speedy downward spiral...perhaps the beginning
>> of the actual end.
>> 
>> Given these (somewhat uneducated) speculations, what
>> advantages are there for the neocons by appointing Wolfowitz
>> to the World Bank? American capital will indeed be in sore
>> need of the services offered by the World Bank and it's
>> sibling organization, the IMF when our economic house of cards
>> collapses. And as such, the infamous structural readjustment
>> programs proscribed by the IMF and responsible for
>> privatization across the globe could then be fairly levied on
>> U.S. citizens on a large scale, impoverishing many - if not
>> most - of us. This privitization frenzy would undoubtedly
>> greatly enrich the neocon corporatists.
>> 
>> Are they readying themselves for the inevitable demise of the
>> United States of America? Is power ascending like a wisp of
>> vapor from the rubble of the nation-state? Geopolitical
>> boundaries, after all, seem somewhat obsolescent due to
>> well-oiled mechanisms of borderless capital as well as the
>> militaristic stalemate of nuclear proliferation.
>> 
>> Can anyone comment on what the long-term strategy here is? Or
>> am I naive in thinking that one exists?
>> 
>> ..:: Paul King
>> 
>> 
>> -------------------------------------------------------
>> 
>> The US current account deficit reached a record $665.9bn in
>> 2004 -- driven by rising oil imports and consumers' appetite
>> for foreign goods ... the deficit as a percentage of the total
>> economy also set a record, rising to 5.7% from 4.8% in 2003
>> ... the fourth quarter current account deficit had widened
by 13%
>> 
>> The dollar slid against the euro Wednesday on data that
>> showed the U.S. current account deficit soaring more than
>> expected in the fourth quarter and far exceeding its previous
>> record for the full year. Greenspan says, "we were all wrong,"
>> about rosy surplus forecasts he used to support Bush's 2001
>> tax cuts
>> 
>> As the FT predicted two weeks ago, Bush names Paul Wolfowitz
>> World Bank president; "Wolfowitz told reporters he's
>> determined to 'wage war on poverty' [but not] unilaterally.
>> Instead, he will seek out a broad coalition of "Europe and
>> others" before attacking the world's poor people." He's
>> supported by Biden and other NatSecDems -- and by Sen. Leahy
>
>_______________________________________________
>Peace-discuss mailing list
>Peace-discuss at lists.chambana.net
>http://lists.chambana.net/cgi-bin/listinfo/peace-discuss