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Volume 7 Issue 2…Dedicated to the Dialogue on Race…January 16, 2004
By John Burl Smith
George Monbiot, author of The Age of Consent: A Manifesto for a New World Order (Flamingo Press), revived the notion in the New Statesman (June 9, 2003) of Chartism as a solution to world economic problems. Chartists, 19th century English reformers, advocated better social and industrial conditions for the working class. Questioning whether the present world order can deliver on its promises of freedom and democracy through globalism, Monbiot proposes an international government. Examining the United Nations model, he finds it wanting and suggests reform would be far more productive than the stop gap role it presently plays as a hedge against total domination by powerful governments and multinational corporations.
Monbiot believes Presidents Franklin Roosevelt and Harry Truman designed the UN to be a global political system that guaranteed US hegemony, while manipulating the world's governing elite into "active compliance." Roosevelt demanded a US veto to block any decisions made by the UN Security Council. As part of the governing elite, the Soviet Union, United Kingdom, China and France were given veto power as permanent Security Council members.
The Bretton Woods Conference imposed the International Monetary Fund (IMF) and the World Bank on global banking and finance. These two bodies, more than any others, sustain US global financial power by requiring that both institutions have an 85% majority to pass resolutions with the US controlling 17% of IMF votes and 18 % in the World Bank. The ruling elite felt there was more to be gained by accepting their small share of power than to upset the status quo and incur the wrath of the US. Hence, we have Prime Minister Tony Blair and "the coalition of the willing" invading Iraq.
Originally, the International Trade Organization was formed to provide protection for infant industries in less developed countries, transfer technology to poorer nations and prevent corporations from forming global monopolies. Replaced by the World Trade Organization (WTO), the international trade regime has become the very instrument by which global monopolies exploit poorer nations. Today, the US is the pre-eminent global power as Roosevelt and Truman planned. However, in this new mix of high speed communications, mobile capital and mechanized production, what is the role of the American worker and consumer with jobs moving overseas and "open door" immigration for Mexico?
With US jobs disappearing down the black hold of globalism and Mexicans voting with their feet for so-called low wage "undesirable" US jobs, Monbiot's basic premise of Chartism is untenable or null and void. US citizens are being voted out of the marketplace before election day. Monbiot points to the UN as the problem and solution; his modified world government is problematic both in conceptualization and practicality. As with the creation of the UN, only those in power are capable of such grandiose action. Once accomplished, what will prevent or be their incentive to behave differently from George W. Bush on jobs, education, choice, Kyoto, nuclear power, oil, world trade, immigration, preemption and rebuilding Iraq? "Power corrupts and absolute power corrupts absolutely." See www.monbiot.com for Monbiot's complete essay.
The Dark Knight-Batman/White Ninja/Zorro is a video game fiend. He is also a television fanatic, although it is often just background noise as he engages in other pursuits. When his grades slipped and his aggression and selfishness rose, he was informed television and video games rot the brains. Reasonable restrictions were imposed. When queried for comments, the Dark One/Ninja/Zorro whined, "May I please play the game?"
David Ricardo (1772-1823)
"Classical economist" David Ricardo was born into a prosperous Jewish family on April 19, 1772 in London. Educated in England and the Netherlands, where his father, a member of the Stock Exchange, was born, Ricardo entered his father's business at age 14. His marriage and conversion to Christianity (1793) alienated his family. A member of the Stock Exchange, he was sufficiently wealthy by 1797 to turn his attention to scientific questions about banking and finance.
Ricardo's initial contributions on the subject were letters published in the Morning Chronicle (1809). Three pamphlets contain his main ideas. (1) The High Price of Bullion, a Proof of the Depreciation of Bank Notes (1810) explores the value of paper money and the power of the Bank of England to regulate its supply. The House of Commons' Bullion Committee agreed with Ricardo that excessive issues by the Bank of England led to currency depreciation. (2) Proposals for an Economical and Secure Currency (1816) explained the quantity theory and value of a metallic standard. (3) A Plea for a National Bank (1824) criticized banking methods, particularly the issuance of paper money.
On Britain's protectionist Corn Laws, Ricardo published Essay on the Influence of a Low Price of Corn on the Profits of Stock (1815), which argued against barriers to international trade. When goods flow freely across borders, all nations benefit, if countries specialize by producing commodities in which they possesses an absolute advantage, i.e., lowest production cost.
Ricardo's Principles of Political Economy and Taxation (1817) pioneered the use of theoretical models to analyze the distribution of wealth between the factors of production, i.e., land, labor and capital. Ricardo saw labor as an instrument in the hands of capitalists. He theorized the demand for food determined the margin of cultivation, which in turn determined rent. The amount necessary to maintain the laborer determined wages, and the difference between the amount produced by labor at the margin and the wages paid labor determined profit.
In summary, he argued that (1) increased wages do not raise prices, (2) profits can be raised only by a fall in wages and fall only by a rise in wages, (3) profits, in the aggregate, are determined by the cost of the production of the food raised at the greatest expense.
On taxation, Ricardo found a tax is rarely paid by those on whom it is imposed. Raw produce taxes paid by consumers also diminished profits. Landlords paid taxes on rents, but those on houses are divided between landlords and occupiers. Consumers paid taxes on profits, and capitalists paid taxes on wages.
A landed proprietor, Ricardo entered Parliament in 1819. He delivered a number of speeches on trade and domestic economic issues. On the national debt, he argued that nations should defray their expenses, whether ordinary or extraordinary, at the time incurred, instead of providing for them by loans. Ricardo died on September 11, 1823. (Sources: History of Economic Theory: Scope, Methods and Content By H. Landreth)
Disgruntled says:
George W. Bush campaigned as a fiscal conservative. Within days of his installation, he jawboned down the economy to justify huge tax cuts that overwhelmingly favored the wealthy. Determined to win the great game to dominate world oil reserves, he began the endless war on terror. The size of government has exploded with historically high federal budget deficits projected well into the future and a national debt that exceeded $7 trillion in 2003. Like compassionate conservatism, an oxymoron, Bush is fiscally frivolous.
Disgruntled wants to know:
The US public is told thousands of jobs go unfilled because overpaid, highly-skilled US workers do not want them. Supposedly jobs remain vacant as millions of unemployed Americans are so discouraged they stopped looking for work. With foreclosures, homelessness, hunger and poverty up, who has turned down an offer to clean Wal-Mart's toilets?
The Disappearing Dollar
By U.S. Rep. Ron Paul (R-TX)
Those who follow financial markets may be familiar with the term "strong-dollar policy," which is used by Bush administration officials and Federal Reserve Chairman Alan Greenspan. One might assume that such a policy entailed a course of action designed to strengthen the value of the U.S. dollar. However, if we judge Fed policy by Mr. Greenspan's actions rather than his words, it appears we have a weak-dollar policy, a policy that erodes the value of your personal savings.
The "strong-dollar policy" is nothing more than an empty political slogan. The inescapable truth is that the value of the U.S. dollar has fallen over 30% in the past year. There are several reasons for this decline, but the single biggest factor has been Mr. Greenspan's relentless increase of the money supply. There are roughly sixteen trillion dollars in worldwide use today, five trillion more than when Greenspan became Fed chair. The law of supply is immutable: When dollars are abundant they are also cheap.
For much of our history a gold standard imposed dollar policy discipline; every dollar printed theoretically was redeemable in gold. Since the last links between the dollar and gold were severed (1971), the dollar has operated as an article of faith. Christopher Mayer, writing for the Ludwig von Mises Institute, states: "Faith that paper money itself was of any lasting value would have struck our forebears as patently absurd."
The problem is that faith can be shaken, and the precipitous drop in the dollar shows how investors around the globe are very concerned about American deficits and debt. When government policies in a fiat system are the sole measure of a currency's worth, the currency markets act as a reliable barometer of how those policies are viewed around the world.
Politicians often manage to fool the media and voters, but rarely are financial markets fooled over time. When investors lack faith in the dollar, it is a lack of faith in U.S. government policies. The Medicare prescription drug bill provides an example of this phenomenon. The day after it passed, the dollar dropped again. Investors understand the new entitlement will cost trillions over coming decades, trillions that will come from Treasury printing presses and further devalue existing dollars.
Ultra-cautious investor Warren Buffett is trading heavily in foreign currencies for the first time, demonstrating his lack of faith in the dollar. His predicament is simple: He holds billions of dollars, and cannot afford to sit by and watch the value of those dollars drop another 30%. By taking a position against the U.S. dollar, his actions speak volumes.
Unlike Warren Buffett, most Americans are stuck with their dollars. Average people, particularly those who depend on savings or fixed incomes to fund their retirement years, cannot abide the continued devaluation of our currency. A true strong-dollar policy would require constriction of the money supply and higher interest rates, both of which would cause some short-term pain for the American economy. In the long run, however, such a correction is the only alternative to the continued erosion in value of our dollars. (Rep. Paul can be reached at rep.paul@mail.house.gov.)
Disappearing US Jobs
As David Ricardo theorized, a drop in wages leads to an increase in profits, hence the hot performance of US stock markets. While Ricardo made valuable contributions to our understanding of the distribution of wealth, changing economic conditions raise questions about the validity of his free trade assumptions.
In a New York Times op-ed (Second Thoughts on Free Trade, January 6, 2004) and a C-Span program covering the same topic, US Senator Charles Schumer (D-NY) and several economists discussed outsourcing-- the loss of highly paid skilled US jobs to equally skilled but lower paid overseas workers-- its impact on the US economy and the "free trade" implications.
Ricardo's classical free trade model assumed the unique factors of production, land, labor and capital, of a given country which, in turn, gave it an absolute advantage in the production of certain commodities, could not be moved across international borders. With today's technology, multinational corporations can easily relocate operations to countries with cheaper skilled labor. US workers are rapidly being eliminated from the desirable labor pool mix. As highly skilled well paid jobs move overseas, US workers will be forced to take low wage jobs, which will reduce their standard of living.
As Schumer and other suggest, this is not a "jobless recovery." Jobs are being created outside the US. Schumer has called for a national dialogue about the direction of the US; it is an overdue conversation.
By John Burl Smith
The death of 19 year-old Michael Newby (1/5/04), a Louisville, KY black man, who died in police custody, bears all the telltale signs of an absurd pattern of "dying while black." First, only vague and sketchy details as to what actually happened are available. The black man fled; there was a chase. A scuffle ensued and the officer, this time McKenzie G. Mattingly (undercover drug unit), claimed the suspect tried to get his gun. Fearing for his life, the officer shot the unarmed black several times in the back, killing him for some alleged minor infraction that does not carry the death penalty, even if he had been found guilty. Sparks of outrage ignite a volatile situation of shared distrust from past incidents and denials of racism and police wrongdoing.
Explosive, Phase 2 swings into action as soon as blacks in the community learn of the incident. Outraged people spill into the streets sparking a confrontation between the community and police. Sometimes these situations erupt into violence; other times they are peaceful. Either way, preachers and so-called black leaders plea for blacks to remain calm. White leaders claim to understand black frustration, while supporting police efforts to control crime and violence by lawless youth and people involved in illegal drug activity.
Phase 3 kicks in when the officer is placed on "paid leave" or reassigned until an internal review is completed. The Mayor, this time Jerry Abramson, expresses regret but stands squarely behind police efforts to reduce crime. Then, the Mayor either refers the matter to his "Police Accountability Committee" or appoints some similarly named group to investigate the investigation of the black man's death. Classic!
Community calm, black leaders and preachers return to their "day jobs," the Mayor and white leaders continue to run their cities to benefit white interests and police still profile and kill blacks. Based on Christian belief that blacks are heathen savages, which makes them animals, killing blacks is a part of the Neanderthal "ritual hunt" syndrome. Using deadly force against blacks is residual self-imaging based on rights and attitudes whites developed during bond slavery. Every since the Fugitive Slave Act 1850, 1865-66 black codes and lynchings, those enforcing laws and regulations feel justified using deadly force in classic "while black" situations.
Soft Bigotry?
By Dot
George W. Bush frequently refers to the "soft bigotry of low expectations" in sound bytes about the federal education program euphemistically called "No Child Left Behind." Fifty years after Brown v. Board of Education (1954), which supposedly ended the doctrine of "separate but equal" in public schools, black and Latino children are still not afforded an equal education. All across the nation, in inferior public schools, which operate as holding pens for the criminal justice system, black and Latino children are unwitting victims, mis-educated and profiled as second class citizens.
A confederate flag supporter and advocate of strict construction of the US Constitution, Bush is using the celebration of Dr. Martin Luther King, Jr.'s birthday to justify a political fund-raising swing through Georgia. Local activists see Bush's wreath-laying gesture as the height of hypocrisy. Bush does not share the ideals espoused by Dr. King, who opposed war and bigotry, hallmarks of Bush's personal life and public policies.
Dr. King dreamed one day the US Constitution would reflect the Declaration of Independence, i.e., "all men are created equal. " Since his 1968 assassination, neither the Constitution nor the minds of the ruling elite has changed to reflect Dr. King's wish. Ironically, the very men that voraciously opposed Dr. King in life, claim to share his ideals in death, while pretending no constitutional changes are required. Hypocritically, they advocate a strict construction of the US Constitution, which leaves white supremacy as the law of the land, while insisting no barriers to equality exists. And, of course, if blacks fail to succeed in the land of plenty, home of the brave and free, it is no fault of the system. This is the "soft bigotry of low expectations."
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Email apnnews@msnbc.com The IMF issued a 60-page report warning about the US budget deficit and growing trade imbalance. According to the report, the US' voracious appetite for borrowing could push up global interest rates and slow global investments and economic growth. US Secretary of the Treasury John Snow dismissed IMF's concerns and described the more than $475 billion fiscal 2004 budget deficit, which exceeds 4% of GDP, as "entirely manageable." In response to this statement, the dollar fell and gold and oil prices rose.
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