RAVE: Quotes by John Kenneth Galbraith

I am always on the lookout for anything or anyone that undermines the laissez-faire, neo-liberal and fundamentalist Friedmanite economics that continues to plague the world. The economics that espouses a 'free market', slashed (or non-existent) social services and privatization/ wide open markets as if it were the only economic belief system worth holding on to.

It is the belief system of Friedmanite pillars like the Washington Consensus, which includes the IMF and World Bank, not to mention the WTO, Rand Corporation and every other 'free market' money-obsessed whore monger and apologist on the planet. And the infamous Chicago School of Economics, of course.

A belief system that has made the world an ugly, selfish, poverty-stricken place, and a belief system that is the antithesis of what I stand for, never mind that it is unsustainable for people and planet alike.

Enter John Kenneth Galbraith. This Canadian-born economist was one of the most celebrated economists of the 20th century. A devout Keynesian (which instantly makes him someone I can respect, because Keynesian economics is what it should be about), he was strong believer in the potential harm that could be caused due to the growing link between economics, the 'political economy' and the rise of self-interested corporations.



I need to read more about his work, beliefs and life. This was clearly a man with vision, a man whose words and intellectual thinking are even more relevant today that ever before.

Just a few of his brilliant quotes are testament to that:

"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."

“In all life one should comfort the afflicted, but verily, also, one should afflict the comfortable, and especially when they are comfortably, contentedly, even happily wrong.”

"There's no question that this is a time when corporations have taken over the basic process of governing."

Milton Friedman hated the man. Isn't that reason enough to think highly of John Kenneth Galbraith?

Do you get my point?

RANT: Austerity & Other Nonsense

There is so much talk these days about austerity, austerity, austerity. Governments worldwide are brandishing this word around like financial sabres, ready to cut and thrust at everything and everybody in their wake.

It's been all the talk, nay, all the rage at the G-20 talks in Toronto.

It's all about cut, cut, cut.

And why? Because of the current global financial crisis (read: meltdown), of course. We're all told again and again and again in the media about how bad many developed countries' public finances are and how it is so necessary for austerity measures to be introduced so that the 'deficits' can be brought under control.

It all sounds so utterly convincing - if one hears it enough times (and, boy, don't we just). After all, the finances of a country need to be 'balanced', right?

Wrong.

This current obsession with 'balancing the books' of countries so that debt levels can be somehow 'stabilized' is NOT the only solution to governments around the world. Yet, the way many leaders and 'economic experts' (now there's perhaps the biggest oxymoron of our times...) speak, one would believe that only by slashing away at any public spending are governments going to get out of their current debt spiral.

This austerity obsession, deliriously manic in its 'all-or-nothing' worldview, has taken its grip. And it will not let go. Thus the need to dissect just what all this austerity will actually mean:

• slashed public (read: government) spending on health
• slashed public spending on education
• slashed public spending on infrastructure
• slashed public spending on social services
• slashed public spending on social upliftment programmes
• slashed public spending on single mothers
• slashed public spending on poor children
• slashed public spending on the poor - period
• slashed everything that creates any semblance of a welfare, communitarian state

But there's more. Inevitably, without exception, these austerity measures also mean:

• more selling of public (government-owned) assets
• more privatization, including of public utilities
• more 'open markets' (i.e. to foreign, cheaper imports)
• less trade barriers of any kind - whatsoever
• diminished unionization and union powers
• 'liberalization' of labour laws (as if workers being protected and having minimum rights somehow needs to be 'liberated')
• less restrictions on banks and other financial institutions

Hey, hold on a moment - this all sounds terribly familiar. This sounds just like the type of painful, nation-destroying program (obliquely referred to as 'structural adjustment') that is ALWAYS imposed by the IMF whenever it grants a loan to a country, right? Absolutely. And aren't the IMF and its other Evil Twin, the World Bank, nothing more than the international bank and finance versions of the so-called 'Washington Consensus' - i.e. the wholesale embrace of the Chicago School of Economics and its architect, that most vile economist, Milton Friedman?

Friedman is thankfully dead, but his nihilistic vision of economics is alive and well, i.e. the market always 'knows best', the market should be left completely unregulated, there should be no government interference in the market, etc. That magic 'market' that knows best and will make all of our lives so much better. You know - all that utter neoconservative economic crap that got us into this whole mess in the first place...

The very antithesis of Friedmanite economics is that of the Keynesians, the economic theory that dominated world economics and public financing from the 1930s until Friedman started to rear his ugly, perverse head in the 1970s.

We can thank the brilliant British economist John Maynard Keynes (in the photo) for his brand of 'caring capitalism' economics. Brilliant because the Americans stuck in the nightmare of the Great Depression in the early 1930s can thank Keynes for getting them out of it. The New Deal anyone? Where the hell do people think Franklin D. Roosevelt got the idea to pump money into the American economy with huge public works, thereby creating jobs and new prosperity?

The post-World War II Marshall Plan, not to mention the social welfare-based market economies of Western Europe from 1945 to the 1980s, were entirely Keynesian in theory and practice.

Where the Friedmanite (aka monetarists) cultists dictate that in bad times one should switch off the public spending taps, Keynesians believe that governments should spend, spend, spend. Keynesian theory says that in order to create wealth one must spend money to do so. Pump the economy full of cash, even if it creates more initial public debt.

Friedmanites, cultish to the hilt in their governments-out-of-markets-at-all-times hysteria, say this is madness. Debt is debt and debt is bad, they preach. So, it's slash, slash, slash for them.

Oh, but do make sure that the banks and stock markets remain completely unregulated so that they can run riot like the financial terrorists that some of them wish to be...and plunge us into this crisis all over again.

Yeah, the Friedman approach makes perfect sense.

And so we now live in this surreal and schizophrenic world of contemporary global finance and public spending. On the one hand, governments have pumped huge amounts of public money into the economy. That's Keynesian, whichever way you look at it. Except they've thrown all the money at the speculators and at the rogues (i.e. the banks, investment houses, etc), rather than benefiting the savers and those needing work in the economy. Ummmm, Keynes would not have approved.

On the other hand, governments resolutely refuse to really clamp down on banks, financial institutions on the whole, stock markets, etc. It's all been so wimpish, so piecemeal, so ineffective. And, worse still, now plunged into further debt because of bailing out banks, governments all over now insist on slashing public spending so that they can 'control the public debts'...!!! They simply can't seem to get out of the Friedman horror show that has gripped the world's economic imagination since the 1980s.

Hence the current economic schizophrenia.

It's madness. Just yesterday on the Keiser Report on Russia Today TV, Ellen Brown, who has written the critically acclaimed book "Web of Debt" (which I absolutely must read ASAP), spoke of how ridiculous it was that the new British government have been quoted as saying that they will need to slash spending in order to save the welfare state. She stated that warped logic was akin to "starving the patient even more in order to save the patient." In a word - preposterous.

Governments do NOT need to slash public spending in order to jumpstart ailing and debt-ridden economies. On the contrary - more than ever, they need to inject huge amounts of money into protecting those who save and don't merely speculate and, more importantly, making huge investments in job creation, skills development and other socio-economic programs. Yes, a country will get into more debt. A lot more debt even - without a doubt. Initially, that is. But at least the 'stimulus plan' will be effective in the long run - more jobs actually created, more spending power as a result by all citizens, more sustained growth.

The 1930s New Deal anyone?

AND, most importantly, at least public money will be kept in the public domain for the public good and not handed over to the robber barons just so that they can loudly say NO whenever anyone asks to borrow some of 'their' precious money (which is actually the public's, but anyway)...

Austerity is not inevitable. Austerity is not the only way.

Austerity. It's the 'A' word that should be an 'F' word.

Do you get my point?

RANT: The Scam that is 'Sovereign Debt'

'Sovereign debt.' The latest chapter in the mess that is the ongoing financial and economic crisis hitting most of the Western world, and many other countries aside. In short, sovereign debt is supposedly what a country's treasury (i.e. government coffers) has in terms of debt.

And, oh boy, are many countries now on the verge of sovereign debt default, i.e. the inability to pay national debt, whether it to be foreign creditors, pay for social programs at home, raise sufficient capital through treasury bonds issuance, etc. The effect on local economies, not to mention the global economy, if countries start to default on their own national debt, could be quite catastrophic.

Greece is first up.

Greece is on the verge of defaulting on its debt payments. The European Union is freaking out. The Eurozone is freaking out. I mean, countries in Europe don't default on their payments, do they? That's something the likes of Brazil and Argentina and Nigeria did back in the 1980s. Not an EU and euro-based country. Right? Well...no. Greece is on the verge of default. That is fact.

The Greek Prime Minister, George Papandreou, has blamed his country's economic crisis on international speculators (i.e. the likes of Goldman Sachs and their fellow blood-sucking brethren in the international financial world) with their buying up of Greek treasury bonds and, now, dumping of them. Some pooh-pooh that notion (always international financiers or Wall Street apologists, by the way), but don't get analysts like my man, Max Keiser, started on that notion. For him, and many others, the imminent collapse of Greece is entirely the fault of international speculators that are playing havoc with entire national economies.

I, for one, totally believe what Papandreou accuses Wall Street of doing to Greece.

And there are others too who may almost be on the verge of national debt default...

Spain





Ireland





Italy - beautiful land of my ancestors...





Portugal - the other land of my ancestors and a beautiful country I know so well...what a shame...




And don't let's forget about a country that has already defaulted on it's so-called 'debt'...

Yes, Iceland




The land of geysers and volcanoes, the fabled Blue Lagoon, green energy - and, now, the highest debt per capita load on the planet...

Poor Iceland. A canary in the coalmine of what is fundamentally sick - nay, perverted and twisted - about the current global uber-capitalist model.

Sovereign debt is a scam because how can national treasuries be in control of their economies when they are at the mercy of international financial and currency speculators? There's nothing sovereign about this debt any more, hence the total and utter scam thereof.

It's a farce and just the latest chapter, writ HUGE, that demonstrates just how fundamentally flawed, corrupt and outrageously amoral the current neo-liberal, profit-at-all-costs, unregulated financial markets a la Milton Friedman and the Chicago Boys that is world capitalism. It's sick to the core. Adam Smith and Maynard Keynes must be turning in their graves with just how sick the system has become.

Yet, national governments in Europe must also take the blame (not to mention that of the United States, now in debt to the tune of 14 TRILLION dollars, although that endless warmongering is hardly cheap, now is it?). This is what you get when you bail out banks and financial institutions that were reckless and perverse in how they played the stock markets and economies of the world.

Using public money (i.e. the money of citizens) to bail out, to the tune of billions and billions of dollars and euros, the very crooks and scheisters that got us into the mess, was not only madness, but MORALLY BANKRUPT of all those politicians who allowed this to happen. You bloody bastards, all of you.

So what would I like to see? I would like to see the likes of Greece, Spain, Portgal and Ireland DEFAULT on their so-called sovereign debts. And, better still, give the IMF the biggest middle finger ever seen in financial history by saying 'NO! We will not take your loans!' Because these countries should know these IMF 'loans' will come laden with Friedmanite and Chicagoesque preconditions to 'liberalize' economies, slash public spending, 'open up markets even more', and all the other Friedmanite bullshit that got us into this horrific and amoral mess in the first place.

But, of course, I have better chances of seeing pink elephants having a full-scale Grand Prix in the sky than I do of those countries having the courage and the foresight to do just that.

THIS is the perfect time for a complete review and even overhaul of capitalism as we know it. It has never been more perfect - or more needed. I'm certainly not advocating communism or any other 'ism' for that matter. What I am advocating is that we stop this madness where 0.01% of the richest people in the richest economies can hold entire countries to ransom. And, in the process, destroy the very fabric and social and human rights within those countries. I don't want to see European countries like Greece, Ireland and Spain collapse or relegated to economic basketcase status. I'm funny that way.

Stop this obsession with Friedmanite uber-capitalism and the 'Stock Market is King' economic mentality, like some demented mantra. It is NOT working.

Enough is enough. Basta!

Do you get my point?

SITE OF THE DAY: Renegade Economist

My site for today is Renegade Economist. Please check it out at renegadeeconomist.com, or click on the link in my list of site links in this blog.

This site came to my attention when I was watching Max Keiser's brilliant half-hour show on RTV last night (see my previous post with Max as my Man of the Day). He was interviewing an economist by the name of Fred Harrison (the 'Renegade Economist') who was offering his views on why the current global economic system, especially in the USA and UK, is so geared towards constant 'boom and bust' cycles that average 18 years.

What I especially liked about what Mr. Harrison had to say was his insistence that the system is so bad and so prone to busts because of the way taxation revenue is generated by governments. I'm no economist, but I believe what he said is that the current tax regimes of taxing people's incomes never allows true growth to occur. It suppresses wages, obviously eats into net earnings and allows for less money in the economy. Rather, he argues, taxation should be based solely on the one asset that always values the most over the longer-term, namely land. By taxing land ownership, and not people's incomes, government will, in fact, according to him, generate more income and allow people to fully bear the fruits of their production, i.e. their wages, non-land generated income, etc.

He is convinced that this taxation model (which I'm sure is alot more complex than what I have stated above, and which I need to further understand myself) will be more equitable, be far less onerous on the lower- and middle-classes, and more fairly tax where the money really is, i.e. in land ownership.

He does acknowledge that there is currently no political will whatsoever to overhaul a system that is over a hundred years old but is convinced his system is worth trying out. Let's face it, in my opinion this economic system of constant booms and busts simply cannot be 'the best' solution that there is to the world's economy or even to economies in individual countries.

What I also liked is how he spoke of a 'sustainable' economic system that is not prone to the ridiculous highs and terrible lows of the current system. Sustainability is what I'm about, and a more sustainable, far less erratic (not to mention often grossly skewered) economic system is part of that sustainability for the future.

A free market at all costs is NOT the answer.

In a world commandeered by economists, bankers and politicians who genuflect quasi-religiously and without question to the rightwing, elitist and absolutist tenets of the 'Chicago School' of economics (and its guru, the despicable Milton Friedman), we need to hear the voices and opinions of economists like Fred Harrison.

Below I have taken the liberty of directly quoting from one of the pages on this website. If you like what you read, explore further, okay.

"Fred Harrison is one of a band of renegade thinkers who challenge the misinformation being purveyed by once trusted political and financial institutions.

Governments and central bankers are scrambling to understand how they allowed the global financial crisis to occur. They rationalise these events (to avoid blame being pinned on them) while searching for ways to mitigate the damage inflicted on the global economy.

In 1997 Harrison warned Tony Blair and Gordon Brown that the British economy was heading for disaster. They didn’t listen. He then spent a decade telling politicians and central bankers how to avoid the looming crisis. They didn’t listen.

In 2005 his book Boom Bust: House Prices, Banking and the Depression of 2010 enjoyed substantial public response, which inspired this website. The Renegade Economist exists to challenge the increasingly desperate measures adopted in response to the deepening global depression."