Friday, August 14, 2009
In the last few weeks, the current president of the United States has been striving to demonstrate that the crisis is yielding as a result of his efforts to confront the grave problem that the United States and the world inherited from his predecessor.
Nearly all economists are making reference to the economic crisis that began in October 1929. The preceding one came at the end of the 19th century. The highly generalized tendency of U.S. politicians is to believe that as soon as the banks have sufficient dollars to grease the machinery of the productive apparatus, everything will march toward an idyllic and never-dreamed of world.
The differences between the so-called economic crisis of the 30s and the current one are many, but I will confine myself to just one of the most important.
At the end of World War I, the dollar, based on the gold standard, replaced the pound sterling, due to the vast sums in gold that Britain spent on the war. The great economic crisis in the United States came barely 12 years after that war.
Franklin D. Roosevelt, from the Democratic Party, won to a good extent aided by the crisis, as did Obama in the present crisis. Following the Keynes theory, the former injected money into circulation, constructed public works such as highways, dams and others of unquestionable benefit, which increased spending, demand for products, employment and the GDP for years, but he did not obtain the funding by printing dollar bills. He obtained it from taxes and with part of the monies deposited in banks. He sold U.S. bonds with guaranteed interest, which made them attractive to buyers.
The price of gold, which stood at 20 dollars per troy ounce in 1929, was raised by Roosevelt to 35 dollars as an internal guarantee of U.S. dollar bills.
On the basis of that guarantee in physical gold, the Bretton Woods agreement emerged in 1944, giving the powerful country the privilege of printing hard currency at a time when the rest of the world was bankrupt. The United States possessed more than 80% of the world’s gold.
I do not need to recall what came afterward, from the dropping of the atom bombs on Hiroshima and Nagasaki – the 64th anniversary of that act of genocide has just passed – to the coup d’état in Honduras and the seven military bases that the government of the United States proposes to install in Colombia. The real fact is that, in 1971, under the Nixon administration, the gold standard was eliminated and the unlimited printing of dollars turned into the greatest fraud of humanity. In virtue of the Bretton Woods privilege, by unilaterally suppressing convertibility, the United States is paying with paper for the goods and services that it acquires in the world. It is true that, in exchange for dollars it also provides goods and services, but it is also a fact that, since the elimination of the gold standard, that country’s dollar bill, quoted at $35 per troy ounce, has lost almost 30 times its value and 48 times the value that it had in 1929. The rest of the countries of the world have suffered those losses, their natural resources and money have financed rearmament and, to a large extent, underwritten the empire’s wars. Suffice it to note that, according to conservative calculations, the quantity of bonds supplied to other countries are in excess of $3 trillion, and the public debt, which continues growing, is in excess of $11 trillion.
While competing amongst themselves, the empire and its capitalist allies have made people believe that the anti-crisis measures constitute formulas of redemption. But Europe, Russia, Japan, Korea, China and India are raising funds not by selling Treasury bonds or printing money, but by applying other formulas to defend their currencies and their markets, sometimes with great austerity for their populations. The overwhelming majority of the developing countries in Asia, Africa and Latin America are the ones who are paying for the broken dishes, by supplying non-renewable natural resources, sweat and human lives.
The North American Free Trade Agreement (NAFTA) is the clearest example of what can happen to a developing country in the jaws of the wolf: in the most recent summit, Mexico was unable to obtain solutions for its immigrants in the United States, nor permission to travel to Canada without a visa.
However, under the crisis, full force is being acquired by the largest FTA [Free Trade Agreement] on a world level: the World Trade Organization, which grew under the triumphant notes of neoliberalism to the lofty heights of world finances and idyllic dreams.
On the other hand, BBC Mundo reported yesterday, August 11, that 1,000 UN officials, meeting in Bonn, Germany, announced that they are trying to prepare the way for an agreement on climate change in December of this year, but that time is running out.
Ivo de Boer, the highest-ranking UN official on climate change, stated that the summit is only 119 days away and that "we have an enormous number of divergent interests, scant time for discussion, a complicated document on the table (200 pages) and funding problems…"
"The developing nations are insisting that the greatest volume of gases producing the greenhouse effect originate in the industrialized world."
The developing world is affirming its need for financial aid to do battle with climatic effects. Ban Ki-moon, UN secretary general, stated: "If urgent measures are not taken to combat climate change, they could lead to violence and mass disturbances throughout the planet." Climate change will intensify droughts, floods and other natural disasters."
"The scarcity of water will affect hundreds of millions of people. Malnutrition is going to lay waste to a large part of the developing countries."
A New York Times article on August 9 explained that "The changing global climate will pose profound strategic challenges to the United States in the coming decades, raising the prospect of military intervention to deal with the effects of violent storms, drought, mass migration and pandemics, military and intelligence analysts say.
"Such climate-induced crises could topple governments, feed terrorist movements or destabilize entire regions, say the analysts, experts at the Pentagon and intelligence agencies who for the first time are taking a serious look at the national security implications of climate change."
"‘It gets real complicated real quickly,’ said Amanda J. Dory, the deputy assistant secretary of defense for strategy, who is working with a Pentagon group assigned to incorporate climate change into national security strategy planning."
One can deduce from The New York Times article that not everyone in the Senate is as yet convinced that it is a real problem, one that has been totally ignored by the U.S. government to date since it was approved 10 years ago in Kyoto.
Some people are saying that the economic crisis is the end of imperialism; perhaps that should be proposed if it doesn’t signify something worse for our species.
In my judgment, it will always be best to have a just cause to defend and the hope of moving forward.
Fidel Castro Ruz August 12, 2009 9:12 p.m.
Translated by Granma International
* From: http://www.truthdig.com/eartotheground/print/20090813_castro_issues_critique_of_us_economic_policy/
Posted on Aug 13, 2009
|AP / Franklin Reyes|
Just in time for his 83rd birthday, former Cuban President Fidel Castro made his presence known once again, by signaling his displeasure with the United States’ handling of the recent financial catastrophe. He spoke out in an Op-Ed article published Thursday in Cuba’s government-run newspapers. —KA
AFP via Google News:
“The quite general tendency of US politicians is to believe that as soon as the banks free-up enough dollars to grease the machinery of the productive apparatus, everything will march on to an idyllic and not-yet- dreamed-of world,” Castro said.
“Some people talk about the economic crisis being the end of imperialism, maybe one could ask whether it does not mean something worse for our species,” he added.
Subscribe to Posts [Atom]