[Peace-discuss] banking bailouts *are* protectionism! from another fine Dean Baker article

[John W.]

I think it's no secret that Ricky has recently been looking for a "job".
>From where I sit, he has all the makings of a principled professional
political pundit.  His ruminations are some of the best that I read on this
forum, every bit the equal of the so-called "experts".

John Wason



On Tue, Nov 18, 2008 at 10:53 AM, Morton K. Brussel <brussel at illinois.edu>wrote:

This is a fine reflection, Ricky. Publish it!   --Mort
>
> On Nov 15, 2008, at 5:00 PM, Ricky Baldwin wrote:
>
> It's an excellent point, Stuart.  And I think it *is* complicated.
>
> A generation or two, maybe more, have learned to pronounce "protectionism"
> (even "intervention" in the context of the economy) as if synonymous with
> "incest" or "child pornography", "free enterprise" as if synonymous with
> "truth, justice and the American way."  The truth is, capitalism doesn't
> actually *work* without constant intervention, and it can't develop anywhere
> without protection.
>
> It's not just the bailout - we do it *all the time*!  What are copyrights,
> patents, trademarks if not protection?  Big tax breaks, industrial
> development funds, TIFFs - are these "free" enterprise?  Does Wal-Mart move
> in without publicly funded roads, publicly funded extensions of sewer lines
> - in some places water and electric utilities and trash pickup (which ought
> to be public here, too) - and in e.g. Urbana the gift of a new parking lot?
>
> What about all the gov't research - not just pharmaceutical, the internet
> (the whole thing), not to mention TV, and innumerable other 'hard'
> technologies, but also all that business development "research" that
> universities like UIUC charge the taxpayer for and then hand over gratis to
> 'investors'?  And what do *we* get out of it?  That question seems to be
> lost in the cheerleading.
>
> It's not enough, we have to suppose, that capitalism itself is always based
> on theft - land from indigenous peoples, labor from slaves, resources from
> foreign lands whose governments we topple or manipulate with debt or
> military aid or some such drug, or labor again the full value of which the
> bosses never pay because if they did they could never "profit" but only
> trade.  No, that part wasn't exactly easy - it took intensive and extensive
> support from centuries of sympathetic gov'ts willing to fight wars, suppress
> strikes and rebellions, execute "pirates", enforce the return of escaped
> slaves, sign and break treaties, etc., etc. - but we have it all behind us
> now, and more is required.
>
> I personally think we shouldn't be naive.  Most of us are not primativists,
> much as we may respect Earth First! et al.  But if we want a certain kind of
> society, a certain 'level of economic development' (for lack of a better
> term) with high literacy and low infant mortality and so on, OK, there's a
> price.  But that doesn't mean Margaret Thatcher was right with TINA (There
> Is No Alternative).  If 'progress' is what we want, we should go into it
> with open eyes, sober, and say, all right, maybe certain types of technology
> can't develop so well in individual garages and cottage industries.  Or
> maybe there's a way to develop that kind of thing down the road, once we
> make the initial public investments and so on.
>
> And maybe in the current economic web in which we find ourselves, we can't
> allow huge chunks of the web to just collapse and take hundreds of thousands
> of lives along.  The cost - and I mean the human cost - of "letting them go"
> would likely be a humanitarian disaster, though probably not as bas as some
> of the predictions.
>
> But the priorities need to be set socially, I think preferably in some sort
> of democratic way, though most methods will have their drawbacks.  We have
> to do our best.  Investments need to match these social priorities: probably
> something like health, education, sustainable energy, whatever - and I think
> some kind of international relations that don't privilege the military
> solutions.
>
> Of course we're light years from anything like that, at least from a system
> organized primarily along those lines.  Hard to imagine an interview with an
> award-winning economist in the New York Times saying this kind of stuff,
> without the word "satire" or "entertainment" affixed somewhere.
>
> But the funny part is, most people like the sound of it.  Not everybody,
> but most people.  We just don't believe it's possible.   Somewhere in the
> back of our brains millions and millions of heart-of-hearts socialists,
> really believe in TINA, not in the sense of believing in an ideal, but in
> the sense of believing in the law of gravity.  There's an idea that it's
> hard-wired into a supposedly immutable or at least biologically determined
> "human nature" that is willing to entertain ideas of social justice mostly
> as whims and fancies and is basically cutthroat.  It's junk-science, of
> course, but even those of us who haven't fallen into this trap still can't
> muster much hope for the kind of social revolution that could bring about
> such things.
>
> I won't argue that right now - but just point out that it isn't all or
> nothing.   We already *have* massive intervention in the economy by every
> level of government.  What we have to do is pressure the gov't on its
> priorities.  It's actually a very good time to do it, too, confidence in
> capitalism being at a low, expectations of the incoming government being
> high, and so on.  But without the proverbial "heat from below" the system
> promises to recalcify quickly, and intervention is likely to follow the
> model of "socialized risk, privatized profit."
>
> Ricky
>
> "Only those who do nothing make no mistakes." - Peter Kropotkin
>
> ------------------------------
> *From:* Stuart Levy <slevy at ncsa.uiuc.edu>
> *To:* peace-discuss at anti-war.net
> *Sent:* Saturday, November 15, 2008 12:20:27 PM
> *Subject:* [Peace-discuss] banking bailouts *are* protectionism! from
> another fine Dean Baker article
>
> We keep hearing from financial pundits & politicians
> about the need to avoid falling into the sink of
> protectionism.  Keep our markets free, etc.
>
> But Dean Baker's recent article points out that our
> bank bailouts -- which guarantee the stability of US and
> European banks, making them as safe as their governments --
> is exactly that, protectionism, and it puts the banks of
> other countries at an enormous competitive disadvantage:
>
>     http://www.truthout.org/111008D
>     "The G-20 and Biological Warfare", by Dean Baker
>
>
> [...]
>
> The G-20 will no doubt decide to make some aid, presumably through the
> International Monetary Fund, available to the countries being hit by the
> fallout from Wall Street's financial meltdown. But this aid will come with
> strings and likely not be sufficient to make these countries whole.
>
>     There is no easy remedy to this situation. But it should be obvious to
> the
> developing world that the only way that they can protect themselves from
> the
> episodic crises created by the rich countries is to have alternative poles
> of
> financial support. Specifically, if they can establish regional funds, as
> the
> South American countries have begun to do with the Bank of the South, then
> they
> can hope to insulate themselves from the financial dealings and misdealing
> of
> the wealthy countries.
>
>     Building up regional funds will not be easy. Countries will have to
> make
> compromises and surrender some control to allow a regional fund to operate
> effectively. In addition, the wealthy countries will go to considerable
> lengths
> to prevent the creation of effective regional funds. The most obvious route
> will be to invite a few important actors in the developing world to sit
> among
> the wealthy countries as junior partners.
>
>     These tactics may prove successful. However, until the developing
> countries
> can turn to alternative sources of capital, they will be susceptible to
> every
> crisis resulting from the regulatory failures of the wealthy countries,
> even if
> they had been completely responsible in managing their own financial
> affairs.
> It's not fair, but that is the way the world works.
>
>
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