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Dean's new economic proposal (pg. 4)
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| occrider |
| quote: | Originally posted by MisterOpus1
True, but you're not implying that companies like Bechtel and Halliburton didn't get special treatments and were not awarded no-bid contracts were you? Because they did. Yes, they got scrutinized for it, but they got their/our money regardless.
http://www.washingtonpost.com/ac2/w...7¬Found=true
http://www.sundayherald.com/33079
Plenty of cronyism to go around for other companies over there as well.
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Now why would I say that there is no evidence of cronyism ocurring when I posted this thread a month ago?
http://www.tranceaddict.com/forums/...counting+office
I wasn't so much arguing that there is no cronyism happening as I was arguing against rupert's blanket statement that the entire institution of defense spending was to transfer money from taxpayers (the largest proportion of taxes coming from the wealthy) to the wealthy vis-a-vis corporations. That being said, I don't really know for certain if the administration is guilty of cronyism, although I suspect it. Simply put, you or I really know nothing about how military contracts such as these are procurred. Is it being done any differentely now than it has been under Clinton? Halliburton has been a long time contractor for the US army corp of engineers for the past six decades or so. Why was the issue of cronyism not raised under the past 6 decades of administrations? Could it be that the US army simply has long standing ties with Halliburton and as one of the largest companies in this industry they alone have the logistical capabilities and track record to take on this massive undertaking? Even officials from past administrations state that:
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William Reinsch, president of the National Foreign Trade Council in Washington, is a Democrat who served under Clinton as undersecretary of commerce. He said he disagrees with most of the Bush administration's policies, but thinks the Halliburton controversy is overblown.
"Halliburton has a distinguished track record," he said. "They do business in some 120 countries. This is a group of people who know what they're doing in a difficult business. It's a particularly difficult business when people are shooting at you. ... I don't think we went to war because we thought it would help selected American companies."
http://www.newsobserver.com/news/q/...p-2685910c.html
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So at any rate, I shall reserve my judgment until after those who actually KNOW how these processes work investigate the issue ... essentially I'm waiting for the GAO report to come out. Until then, I refuse to subscribe to the "hunt the boeing" mentality (those who raised doubt about a plane crashing into the pentagon based on what they "saw" in photos ... who were then revealed to be idiots when actual engineers who knew what they were talking about explained the crash, why the pentagon wasn't obliterated, etc.).
And the poor/middle class find their way around taxes as well ...
http://www.msnbc.com/news/986952.asp
I simply don't understand why people continue to stereotype the rich as if they're any different from the poor/middle class. Wealth does not define a person's ethics/character. The fact of the matter remains that the majority of tax revenue is shouldered by the wealthy. Whether it is enough/not enough is a different debate altogether, however, clearly the rich DO pay taxes otherwise there would hardly be any tax money. Hell if they even took some taxes directed towards the rich, such as the estate tax, called it what it really was, a death tax, and applied it to all income levels, you would see rioting on the streets.
I can't access the commondreams site, but I'll fathom its content and state that tax cuts will always favor those who pay the taxes?
I shall comment on the IMF/World Bank/WTO debate after I have more time to do research ... I'm rather busy at work for once. |
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| occrider |
| quote: | Originally posted by MisterOpus1
Yes, it is their fiscal responsibility. But how responsible is it when the policies of the World Bank is to literally bankrupt and turn the country upside down first:
http://www.alternet.org/print.html?StoryID=12652
Or when those countries simply can't pay off the interest fee hikes given to them, coupled with meager attempts to match their currency with the American dollar?:
http://observer.guardian.co.uk/busi...,535462,00.html
Or how about Equador? Borrowed $1.5 billion, but had a few "rules" it had to follow in order to get it's money, as well as privatize all utilities (which occurs in every IMF loan to poor countries):
http://www.hartford-hwp.com/archives/25/087.html
Or how about Rio and the wonderful world of privatization?:
http://www.guardian.co.uk/Archive/A...3846389,00.html
And some more on Argentina:
http://www.americas.org/News/Featur...esOnlyMemos.htm
Now admittedly, Palast is pretty far to the left. Still, his research on the IMF and World Bank is pretty descent stuff.
My personal view on the steel tariffs is the WTO simply had no choice - what the U.S. and Bush was doing was simply illegial, period. And they simply just couldn't work around it. My point, however, is that when a country owns 51% of the World Bank (the U.S. Treasury), I think they will tend to have a great influence on their policies. And they do, to come as no surprise.
As to the rest of your writings, I got no beef with. But when it comes to WTO and IMF, I think their failures speak loudly for themselves. |
Ahhh ok I managed to a free up a little time. First, we should examine what the IMF really is ... it isn't your friendly neighborhood bank that's giving you a loan to buy that new car that you wanted which can be paid off in low-interest monthly payments. The IMF is the absolute lender of LAST resort. The IMF is only called in at last resort when a company has serious problems. Serious enough problems such that the private sector is completely unwilling to lend to that economy ... meaning that the private sector has no hopes that that country can solve its economic problems. How do you think all those regulated utilities were so cheap for its citizens to begin with? You think those governments were so wonderfully efficient and effective in providing its citizens the goods that they needed before the IMF reduced that to a capitalistic hell? Ha, of course not, they were subsidizing the costs with unsustainable spending and borrowing to the point where they had no more people to borrow from. The role of the IMF is therefore to give that country the bitter medicine it needs to regain its economic foothold. This bitter medicine involves a lot of unwanted political costs (the reasons the politicians never gave this medicine before) such as expensive utilities, loss of jobs, etc. The IMF is not going to issue a loan to a country that has been abandoned by every other lender without instituting changes to assure that it will get back its loans. The politician can then state that they "have" to make those changes in order to satisfy the IMF and lay the blame directly on the feet of the IMF. But has the IMF made mistakes in the past? Yes of course. Economics is not an exact science. There have been notable failures, but then again, what economic policies are a sure thing? The IMF has been lending to a whole crap load of countries who have managed to pull out of their crises. If these countries thought they could do without the IMF than they could have ... all the way until they undergo a complete economic collapse.
What's interesting is that in a recent poll, most leaders who have dealt with the world bank/imf have regarded it as having a positive influence.
http://www.worldbank.org/transition...03/pgs20-21.htm
As for the wto, the US has lost a whole slew of trade disputes ... furthermore, congress is investigating whether the WTO is biased against the US:
http://www.atimes.com/atimes/Global...y/ED18Dj01.html |
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| MisterOpus1 |
Whatever, Dick. You think I'd get off my lazy ass to actually do a search once in a while. You need to stop drastically overestimating me like that. Lower your expectations a few levels, then you can play ball with me!
(Great comeback, huh?)
| quote: | | I wasn't so much arguing that there is no cronyism happening as I was arguing against rupert's blanket statement that the entire institution of defense spending was to transfer money from taxpayers (the largest proportion of taxes coming from the wealthy) to the wealthy vis-a-vis corporations. That being said, I don't really know for certain if the administration is guilty of cronyism, although I suspect it. Simply put, you or I really know nothing about how military contracts such as these are procurred. Is it being done any differentely now than it has been under Clinton? Halliburton has been a long time contractor for the US army corp of engineers for the past six decades or so. Why was the issue of cronyism not raised under the past 6 decades of administrations? Could it be that the US army simply has long standing ties with Halliburton and as one of the largest companies in this industry they alone have the logistical capabilities and track record to take on this massive undertaking? Even officials from past administrations state that: |
Oh sure, Halliburton is definitely an extremely successful business, as is Bechtel and the others often mentioned. Obviously they wouldn't be where they were at unless they had some success (although the Boston highway thingy Bechtel worked on seemed to have given them a little egg on their face). I was just pointing out the obvious connections to this administration to these given businesses. They were given sweet deals, and it seems like legalized cronyism. But I don't think we're in disagreement here.
| quote: | So at any rate, I shall reserve my judgment until after those who actually KNOW how these processes work investigate the issue ... essentially I'm waiting for the GAO report to come out. Until then, I refuse to subscribe to the "hunt the boeing" mentality (those who raised doubt about a plane crashing into the pentagon based on what they "saw" in photos ... who were then revealed to be idiots when actual engineers who knew what they were talking about explained the crash, why the pentagon wasn't obliterated, etc.).
And the poor/middle class find their way around taxes as well ...
http://www.msnbc.com/news/986952.asp
I simply don't understand why people continue to stereotype the rich as if they're any different from the poor/middle class. Wealth does not define a person's ethics/character. The fact of the matter remains that the majority of tax revenue is shouldered by the wealthy. Whether it is enough/not enough is a different debate altogether, however, clearly the rich DO pay taxes otherwise there would hardly be any tax money. Hell if they even took some taxes directed towards the rich, such as the estate tax, called it what it really was, a death tax, and applied it to all income levels, you would see rioting on the streets. |
Quote from your source:
| quote: | At the top of the income scale, Everson said tax shelter promoters peddle potentially abusive products not just in the United States, but increasingly abroad, both to U.S. subsidiaries and foreign companies, he said.
“People are willing to pay their taxes,” he said. “They recognize that important obligation, but they don’t want to feel like they’re paying when someone else doesn’t have to.”
Doug Shackelford, professor of taxation at the University of North Carolina at Chapel Hill, said taxpayers may be absorbing the examples of corporate tax evasion and starting to wonder whether they should pay their fair share. |
This kind of seems to support my argument about the filthy wealthy utilizing tax shelters (as well as corporations, but that's another argument). The attitude to the middle and lower class, at least to me, doesn't seem too outlandish - they have to pay for their fair share, while the filthy rich (and I'm referring to the top 1%) find ways around paying their fair share. The article I drew on in the NYT shows the approximate value of $800 billion going off into offshore tax shelters. I would be interested in comparing how much is going unaccounted for in the middle/lower class. My guess is it probably isin't as much as the upper class utilizing offshore accounts, but I digress. In any case the result is seen - the middle/lower classes are getting pissed, and don't feel it's fair. So naturally, the IRS responds by cracking down a little harder on the middle/lower class. Do I blame the IRS? Nope - it's understandable. They're merely doing their jobs by catching people breaking the law. It is, however, much easier to catch those in the middle/lower class to break the law than the filthy rich who find the loopholes around tax laws, and carry tax lawyers in their back pockets.
| quote: | | I can't access the commondreams site, but I'll fathom its content and state that tax cuts will always favor those who pay the taxes? |
Ehh, don't bother. It's just a little tidbit about Bush helping out the rich with his recent round of tax cuts. Fairly biased website, often times conspiracy bound, and I try not to refer to it often. Bad google searching on my part. |
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| occrider |
| quote: | Originally posted by MisterOpus1
Whatever, Dick. You think I'd get off my lazy ass to actually do a search once in a while. You need to stop drastically overestimating me like that. Lower your expectations a few levels, then you can play ball with me!
(Great comeback, huh?)
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Lol, I'm framing it in the oval office.
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Oh sure, Halliburton is definitely an extremely successful business, as is Bechtel and the others often mentioned. Obviously they wouldn't be where they were at unless they had some success (although the Boston highway thingy Bechtel worked on seemed to have given them a little egg on their face). I was just pointing out the obvious connections to this administration to these given businesses. They were given sweet deals, and it seems like legalized cronyism. But I don't think we're in disagreement here.
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But these organizations were also used by previous administrations ... even Clinton used Halliburton in Somalia. So what I'm getting at is it a reflection of the administration's connections with the company, or is it simply the customer the US engineering corp always turns to since it's a valued customer? Or is it simply because Halliburton/Bechtel are the only companies capable of doing such a large scale operation such as that? Let's say you own a mid-size construction business in a small town ... in that small town there is a home depot and a small hardware store. For most of your big jobs you go to home depot because they have ALL the materials that you need ... you don't even go to the small hardware store to check prices. Meanwhile they recognize you as a valued customer and give you discounts, or give you dinner coupons or whatever. Is that evidence of some sort of secret conspiracy, or is it common sense? We simply don't know what the circumstances or market conditions under which these contracts were awarded. Therefore, I anxiously await the general accounting office's report.
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This kind of seems to support my argument about the filthy wealthy utilizing tax shelters (as well as corporations, but that's another argument). The attitude to the middle and lower class, at least to me, doesn't seem too outlandish - they have to pay for their fair share, while the filthy rich (and I'm referring to the top 1%) find ways around paying their fair share. The article I drew on in the NYT shows the approximate value of $800 billion going off into offshore tax shelters. I would be interested in comparing how much is going unaccounted for in the middle/lower class. My guess is it probably isin't as much as the upper class utilizing offshore accounts, but I digress. In any case the result is seen - the middle/lower classes are getting pissed, and don't feel it's fair. So naturally, the IRS responds by cracking down a little harder on the middle/lower class. Do I blame the IRS? Nope - it's understandable. They're merely doing their jobs by catching people breaking the law. It is, however, much easier to catch those in the middle/lower class to break the law than the filthy rich who find the loopholes around tax laws, and carry tax lawyers in their back pockets.
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And the middle class/poor don't skimp out on some of their taxes because they see that the poor or other middle class people don't pay theirs? Perhaps the rich feel that they shouldn't be bearing a disproportionate burden of the tax load? Either which way, it's a societal problem of enforcement rather than a reflection on social class differences. If you become lax in enforcing taxes upon the middle class they'll skimp out on it too. I would imagine that a lot of people are starting to do this, prompting this IRS warning. However, everybody knows that the IRS primarily goes after rich people because they have a bigger proportion of money to give. I don't worry about an audit because what are they gonna do? Sue me for the $100 I withheld or whatever? (Note to IRS ... I did not withhold any money)
How exactly did we get from dean to this?
Bah, anyway Dean should drop the trade protectionism ... look how much good it's doing Bush.
Btw, did anybody else see GDP getting revised up to 8.2%? |
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| MisterOpus1 |
| quote: | Originally posted by occrider
How exactly did we get from dean to this?
Bah, anyway Dean should drop the trade protectionism ... look how much good it's doing Bush.
Btw, did anybody else see GDP getting revised up to 8.2%? |
Yes, those numbers are fantastic, as are the weekly jobless claims numbers. Tax cuts most certainly contributed. Stimulus tax cuts work in the shorter term, most certainly. Let's see if they do, in fact, spark an upswing, just like supply-siders always say it will (and it usually doesn't last). Perhaps that's why Bush is proposing yet another tax cut stimulus in 2004. Oh goody, more punch to the deficit, more squeeze onto the states, and lo and behold, a rise in interest rates is imminent (as what always occurs when the deficit + lotsa spending accumulates).
I guess I'm still pretty durn skeptical. But time will tell, and I don't mind eatin' a little crow if I'm wrong.
As for Dean's trade protectionism, yeah, that's gotta go. |
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| rupert |
| quote: | | Ahhh ok I managed to a free up a little time. First, we should examine what the IMF really is ... it isn't your friendly neighborhood bank that's giving you a loan to buy that new car that you wanted which can be paid off in low-interest monthly payments. The IMF is the absolute lender of LAST resort. The IMF is only called in at last resort when a company has serious problems. Serious enough problems such that the private sector is completely unwilling to lend to that economy ... meaning that the private sector has no hopes that that country can solve its economic problems. How do you think all those regulated utilities were so cheap for its citizens to begin with? You think those governments were so wonderfully efficient and effective in providing its citizens the goods that they needed before the IMF reduced that to a capitalistic hell? Ha, of course not, they were subsidizing the costs with unsustainable spending and borrowing to the point where they had no more people to borrow from. The role of the IMF is therefore to give that country the bitter medicine it needs to regain its economic foothold. This bitter medicine involves a lot of unwanted political costs (the reasons the politicians never gave this medicine before) such as expensive utilities, loss of jobs, etc. The IMF is not going to issue a loan to a country that has been abandoned by every other lender without instituting changes to assure that it will get back its loans. The politician can then state that they "have" to make those changes in order to satisfy the IMF and lay the blame directly on the feet of the IMF. But has the IMF made mistakes in the past? Yes of course. Economics is not an exact science. There have been notable failures, but then again, what economic policies are a sure thing? The IMF has been lending to a whole crap load of countries who have managed to pull out of their crises. If these countries thought they could do without the IMF than they could have ... all the way until they undergo a complete economic collapse. |
There are a lot of reasons why I hate the IMF but it is merely a symptom of larger systemic faults in the global economy, but I will try and be very brief.
Political flaws:
The IMF is answerable to its creditors not the people who are affected by their policies. For an organisation with pretensions towards promoting the greater good this is unacceptable.
Its officials are based in the United States not the countries they are supposed to work with. In other words its officials lack the detailed knowledge to tailor policy solutions.
It is ideologically driven not outcome driven. It has essentially very similar policies solutions for what are often very different circumstances.
It is unaccountable. It is secret and it is undemocratic.
Economic flaws:
Its goal is to protect western creditors and the policies used to prevent capital flight, raising interest rates and fiscal discipline lead to political instability and economic disaster for the people most badly affected.
Privatisation. The IMF follows by and large the Chicago School doctrine of trade liberalisation and deregulation. Privatisation in and of itself can be a good thing and when it has happened in the West by and large it has been a good thing making the corporations more efficient and delivering tangible benefits to consumers. But the third world isnt the West. Privatisation without effective regulation and rule of law will lead to failure. Always. The politicians will sell off the state assets for a fraction of what they are worth to foreign corporations without delivering real gains to the society.
Floating exchange rates. Many third world countries are too small to have open exchange rates. Witness what happened in SE Asia, the devalaution of the Thai baht led to capital flight from countries right across SE Asia. Developing countries should have strict capital controls because they are not strong enough to withstand mass capital flight.
Speculation and panic selling on currencies in the third world has the real potential for finacial meltdown. By bailing out creditors it leads to moral hazard meaning they are more likely to take risks on speculative investments. The global financial system is a house of cards just waiting for another crisis of confidence.
Capital vs Labour. The IMF, WTO and World Bank are by their very nature tools to protect the interest of capital. They have real teeth to get their way and third world countries have very little ability to stand up to them.
The United Nations, and its sister organisations the ILO and WHO have no teeth. The very organisations who can help the working class by addressing wealth inequalities are utterly useless.
And that is why the system will fail. Because already their is a massive oversupply of capacity but not enough consumers to meet that supply. The IMF and the WTO do nothing to fundamentally address wealth inequality and the failure to address wealth inequality is bad both for the workers but also in the end bad for the corporations and their investors. |
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| occrider |
Well I'm not very learned on the imf but here goes ...
| quote: | Originally posted by rupert
There are a lot of reasons why I hate the IMF but it is merely a symptom of larger systemic faults in the global economy, but I will try and be very brief.
Political flaws:
The IMF is answerable to its creditors not the people who are affected by their policies. For an organisation with pretensions towards promoting the greater good this is unacceptable.
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And everyday banks are answerable to its creditors as well ... what's the difference? The goal is not to cause economic collapse ... how are they going to get their money back? The objective is to create a strong economy in order to regain loans.
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Its officials are based in the United States not the countries they are supposed to work with. In other words its officials lack the detailed knowledge to tailor policy solutions.
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Oh really? The EU actually possesses a far greater share and control of the IMF than the US ...
http://www.imf.org/external/np/sec/memdir/eds.htm
Furthermore, granted they are nowhere nearly as strong as the OECD nations, the third/second world nations possess significant shares as well.
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It is ideologically driven not outcome driven. It has essentially very similar policies solutions for what are often very different circumstances.
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I agree with this
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It is unaccountable. It is secret and it is undemocratic.
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Care to elaborate? I haven't researched the IMF all that much, but the WTO is very transparent.
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Economic flaws:
Its goal is to protect western creditors and the policies used to prevent capital flight, raising interest rates and fiscal discipline lead to political instability and economic disaster for the people most badly affected.
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These policies of fiscal discipline leading to the reason WHY these nations are able to recover at all. Come now ... for one who is an advocate for fiscal discilplin in the US which would lead to economic disaster and political instability, your statements are suspect.
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Privatisation. The IMF follows by and large the Chicago School doctrine of trade liberalisation and deregulation. Privatisation in and of itself can be a good thing and when it has happened in the West by and large it has been a good thing making the corporations more efficient and delivering tangible benefits to consumers. But the third world isnt the West. Privatisation without effective regulation and rule of law will lead to failure. Always. The politicians will sell off the state assets for a fraction of what they are worth to foreign corporations without delivering real gains to the society.
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Agreed. I've always been an advocate FOR privatisization, however, I've been critical of the methods with which privatiizaiton have been carried out.
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Floating exchange rates. Many third world countries are too small to have open exchange rates. Witness what happened in SE Asia, the devalaution of the Thai baht led to capital flight from countries right across SE Asia. Developing countries should have strict capital controls because they are not strong enough to withstand mass capital flight.
Speculation and panic selling on currencies in the third world has the real potential for finacial meltdown. By bailing out creditors it leads to moral hazard meaning they are more likely to take risks on speculative investments. The global financial system is a house of cards just waiting for another crisis of confidence.
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Not an expert on currency valuation ... I'm going to have to come back to you on this one.
| quote: |
Capital vs Labour. The IMF, WTO and World Bank are by their very nature tools to protect the interest of capital. They have real teeth to get their way and third world countries have very little ability to stand up to them.
The United Nations, and its sister organisations the ILO and WHO have no teeth. The very organisations who can help the working class by addressing wealth inequalities are utterly useless.
And that is why the system will fail. Because already their is a massive oversupply of capacity but not enough consumers to meet that supply. The IMF and the WTO do nothing to fundamentally address wealth inequality and the failure to address wealth inequality is bad both for the workers but also in the end bad for the corporations and their investors. |
But wait? I thought that the flight of workers from OECD nations would help developing nations? All the workers are being outsourced correct? This isn't leading to wage improvements at ALL??? That seems somewhat contradictory to economic belief since wages would naturally rise to accomdate increased economic demand. Well if not free trade/labor markets, are we then to argue for labor force trade protectionism? Tarriffs to keep jobs at home and all that jazz? |
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| biznology |
nice post rupert
...i will go into depth on the IMF/WB if time is available, and this discussion hasnt completely changed course by later today| |
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| occrider |
| quote: | Originally posted by biznology
nice post rupert
...i will go into depth on the IMF/WB if time is available, and this discussion hasnt completely changed course by later today| |
I am perpetually perplexed as to why those who lean towards more socialist tendencies are always so opposed to institutions such as the IMF and the World Bank. If ANYBODY should be opposed to it it should be free market capitalists such as myself. Simply think about what would happen to these countries should the imf and teh world bank did not exist ... everybody would be happy in their utopian environments without the influence of greedy capitalists? No, like I stated before the IMF is the lender of last resort stepping in when private markets fail and the economy is at the brink of collaspse. In the absence of the IMF, the country defaults on all its private loans ... which means a complete pullout of capital and investment. Therefore, NO more excessive fiscal spending, NO more cheap utilities, and NO more benefits at all to the citizens who were benefiting off of that nation's irresponsible spending. The next step is that the economy begins to contract and inflation goes through the roof as that administration continues its deficit spending and floods the market with currency. A good case study of that happening is in Zimbabwe right now:
http://news.bbc.co.uk/2/hi/business/3289599.stm
Once the all currency valuation is lost, and the government has no assets, backing, or credibility, the economic structure of the country WILL not be able to provide for the needs of its citizens. The country then descends into strife and civil war as citizens advocating for new leadership fight against the government in power. Therefore, the goal of the IMF is to cause structural reform of that country's economy (because the current leaders obviously were unwilling to do so before ... leading to their financial need for the IMF) and hopefully to encourage sound economic growth coupled with fiscal responsibility. However, even this is looked upon by many economic conservative groups such as CATO, as encouraged fiscal irresponsibility, and that there should be NO safety nets for these governments to fall back on. They argue that global investors do not suffer enough as a result of IMF policies and encourage a departure from free markets. Furthermore, they argue that the IMF are a drain on nations who contribute to the IMF since many of the loans are not recovered from these nations.
However, if socialists are so eager to abandon their one free-market attutide, I suppose I could compromise and abandon my one socialist opinion and do away with the IMF ... :) |
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| biznology |
| quote: | Originally posted by occrider
I am perpetually perplexed as to why those who lean towards more socialist tendencies are always so opposed to institutions such as the IMF and the World Bank. If ANYBODY should be opposed to it it should be free market capitalists such as myself. Simply think about what would happen to these countries should the imf and teh world bank did not exist ... everybody would be happy in their utopian environments without the influence of greedy capitalists? No, like I stated before the IMF is the lender of last resort stepping in when private markets fail and the economy is at the brink of collaspse. In the absence of the IMF, the country defaults on all its private loans ... which means a complete pullout of capital and investment. Therefore, NO more excessive fiscal spending, NO more cheap utilities, and NO more benefits at all to the citizens who were benefiting off of that nation's irresponsible spending. The next step is that the economy begins to contract and inflation goes through the roof as that administration continues its deficit spending and floods the market with currency. A good case study of that happening is in Zimbabwe right now:
http://news.bbc.co.uk/2/hi/business/3289599.stm
Once the all currency valuation is lost, and the government has no assets, backing, or credibility, the economic structure of the country WILL not be able to provide for the needs of its citizens. The country then descends into strife and civil war as citizens advocating for new leadership fight against the government in power. Therefore, the goal of the IMF is to cause structural reform of that country's economy (because the current leaders obviously were unwilling to do so before ... leading to their financial need for the IMF) and hopefully to encourage sound economic growth coupled with fiscal responsibility. However, even this is looked upon by many economic conservative groups such as CATO, as encouraged fiscal irresponsibility, and that there should be NO safety nets for these governments to fall back on. They argue that global investors do not suffer enough as a result of IMF policies and encourage a departure from free markets. Furthermore, they argue that the IMF are a drain on nations who contribute to the IMF since many of the loans are not recovered from these nations.
However, if socialists are so eager to abandon their one free-market attutide, I suppose I could compromise and abandon my one socialist opinion and do away with the IMF ... :) |
well i didnt post anything, sorry! but i do enjoy being equated with socialism just because i like being the devils advocate...
the point with the IMF has nothing to do with socialism. the main fact is that despite the fact their official matra involves providing credit to developing nations to aid in *development*, they answer to the major Western financial institutions above all. therefore lending is often unnecessary and overkill, and when a country comes close to defaulting, instead of providing it with bankruptcy-like options (of rebuilding its banking infrastructure, captial) the IMF immediately loans more money and requires those countries to pay off the IMF loans before all other loans. when this happens, they also require most countries to remove capital controls, which encourages more risky lending and borrowing because all parties (esp the financial institutions) will feel that a bail out means no risk. 1997 Asian Crisis anyone? Russia soon after?
further issues include the fact that Western and especially US NLG policymakers take the high official positions of the IMF and WB, therefore the institution is more likely to service our needs and would requiring the US or other rich W countries to abide by the same rules as poor developing ones - look at Bush with steel tariffs, or the fact Bush ignored the IMF when they said he was running to high of a trade deficit.
the main issue stems from neoliberal globaization(NLG) itself. and dont take it the wrong way- globalization due to technology and transportation is a way of life now, but the policies that NL policymakers support are flawed. NL strives for *perfect* everything, information, frictionless exchange(captial and labor), total commodification. in a utopian world, all of those details could be satisfied, but in our world:
- while capital might be almost frictionlessly exchanged everyday - labor is not.
- even the US as the main proponent of these types of policies continues holding tariffs on agro, etc. installed to protect home industries.
and since this isnt a perfect world does it make sense to push for *almost utopian* when it is impossible to meet the NL goal entirely? no, in many ways countries are better remaining at least the status quo - rather than searching for an impossible dream that makes Western finance richer| |
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| occrider |
| quote: | Originally posted by biznology
well i didnt post anything, sorry! but i do enjoy being equated with socialism just because i like being the devils advocate...
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Sorry, I was more or less referring to the ultra hippy who show up to protest the world bank and such ...
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the point with the IMF has nothing to do with socialism. the main fact is that despite the fact their official matra involves providing credit to developing nations to aid in *development*, they answer to the major Western financial institutions above all. therefore lending is often unnecessary and overkill, and when a country comes close to defaulting, instead of providing it with bankruptcy-like options (of rebuilding its banking infrastructure, captial) the IMF immediately loans more money and requires those countries to pay off the IMF loans before all other loans. when this happens, they also require most countries to remove capital controls, which encourages more risky lending and borrowing because all parties (esp the financial institutions) will feel that a bail out means no risk. 1997 Asian Crisis anyone? Russia soon after?
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Yes they answer to the western nations that contribute to the IMF fund, however, I think that it would be a surprise to see that western nations actually prosper off of the imf. The majority of Imf loans are never actually paid back and DO limit the effectiveness of a countries redevelopment. But as I posted before, the US has been pushing for more imf grants as opposed to loans which have been resisted by the rest of the imf contingents. However, unlike normal bankrupcty proceedings that you or I would use, things are not so simple with a country. You wouldn't see all these magical changes come to happen once they reach bankruptcy for the simple reason that you never saw any changes during the period that lead up to bankruptcy. The leaders of these nations would likely continue their habits at the expense of their people. Therefore, the IMF has opted to more or less pursuade these leaders that if they wanted loans, they would have to restructure their economy in order to avoid a similar path towards default. Who's going to want to lend to a country that had defaulted on its loans? However, I do agree that the IMF has been idealistic in principle in relaxing a country's capital controls.
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further issues include the fact that Western and especially US NLG policymakers take the high official positions of the IMF and WB, therefore the institution is more likely to service our needs and would requiring the US or other rich W countries to abide by the same rules as poor developing ones - look at Bush with steel tariffs, or the fact Bush ignored the IMF when they said he was running to high of a trade deficit.
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And have you seen the recent ruling against the steel tariffs by the WTO? Also there have been quite a LARGE number of recent rulings against the US by the WTO that has led to congressional inquiries as to possible bias against the US ... I posted the article some posts back. Additionally, I posted the number of votes provided to each nation in the imf to clear up possible confusion as to what degree they answer to creditors. However, with respect to the IMF's warning, Bush is under no obligation to oblige to the IMF's warnings as no country has a mandatory obligation to listen to the IMF ... or the WTO either. They are not institutions that are contractually binding. They are services that a country may choose to utilize for their benefit.
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the main issue stems from neoliberal globaization(NLG) itself. and dont take it the wrong way- globalization due to technology and transportation is a way of life now, but the policies that NL policymakers support are flawed. NL strives for *perfect* everything, information, frictionless exchange(captial and labor), total commodification. in a utopian world, all of those details could be satisfied, but in our world:
- while capital might be almost frictionlessly exchanged everyday - labor is not.
- even the US as the main proponent of these types of policies continues holding tariffs on agro, etc. installed to protect home industries.
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I'll agree with everything except your last part ... the agro tariffs are defensive tariffs in response to the EU. The US was actually pushing for a repeal of agro tariffs at the Cancun DOHA meetings.
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and since this isnt a perfect world does it make sense to push for *almost utopian* when it is impossible to meet the NL goal entirely? no, in many ways countries are better remaining at least the status quo - rather than searching for an impossible dream that makes Western finance richer| |
The problem is is that they can't maintain the status quo. The status quo was unsustainable which is the whole reason why they went to the imf. And again, the majority of imf loans are not repaid ... I think I read somewhere that the money they get back in loans is something like 25%. They consistentely ask for more donations by lender nations and I believe the most recent request was an additional $20 billion from the US. I was never aware that the IMF was such a huge profit making venture. But I understand what you're saying, some of the IMF's rapid privatization strategies are poor decisions. But the IMF is not trying to bleed these nations dry ... they are attempting to stabilize their economies so that they CAN get their loans repaid ... the interest rates on their loans are much better than private lender rates btw. |
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so maybe i mis typed (yah i saw a lot of questionable wording post-posting)
but what about US protection on agro domestically? if small, poor countries cannot afford to have $20k/year payments to their farmers - and then they are required to open up their borders to 'cheaper' US agro products, what is that going to do for their development?
basically i dont understand how an economy can be 'stabilized' by requiring that country to pay off excessive loans to Western banks, and then accept massive tariff free western imports. what will the country regain stability from?
hey, i just had to write a review on Joseph Stiglitz Globalization and Its Discontents Ch. 8 "The IMF's Other Agenda" which is most likely influencing my arguement. whether you subscribe or not, its a good piece to check out - but i dont think its posted on the net| |
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