From Mark Engler at Dollars & Sense on Ha-Joon Chang’s Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism:
“What Korea actually did during [the past four] decades,” Chang explains, “was to nurture certain new industries, selected by the government in consultation with the private sector, through tariff protection, subsidies and other forms of government support.” Blatantly violating the policies regularly prescribed for poor nations, the state also owned all the country’s banks, kept tight control over the flow of foreign currency in the country, and ran its own businesses in key areas where it felt the private sector had invested insufficiently. The country’s leaders moved toward more open trade only when its industries were well prepared to compete internationally.
Korea, as it turns out, is hardly an exception. Chang’s wider point is that “practically all of today’s developed countries, including Britain and the United States, the supposed homes of the free market and free trade, have become rich on the basis of policy recipes that go against the orthodoxy for neoliberal economics.” Drawing on a 1841 quote from German economist Friedrich List, Chang charges that advanced industrial nations are guilty of “kicking away the ladder”—prohibiting developing countries from using the very tactics that allowed them to ascend in the global economy.
From Tiffany Ten Eyck at Monthly Review on GM and Chrysler’s bridge loan:
The bridge loan calls for auto retirees to sink half of their retiree health care fund, the UAW-administered Voluntary Employee Beneficiary Association, into company stock. Auto workers questioned the wisdom of putting the remaining VEBA payments into stock, having watched GM’s stock plunge from $29 a share in February to $2.79 by November.
“It’s not worth the paper it’s printed on,” said Tom Brown, a member of UAW Local 600 who works at the Ford Dearborn Truck Plant. “They’re going to attack the retirees badly on this one.”
The VEBA began as an under-funded vehicle: financial analysts predicted at its outset that General Motors was only willing or able to offer less than $35 billion of the estimated $50 billion that it owes retired workers.
The under-funding could lead to a simple, grim arithmetic: each dollar shortchanged translates into a dollar that can’t be spent on health care premiums, co-pays, deductibles, or quality of care. Under a VEBA, the remaining costs of maintaining health care benefits will have to be shifted back to the workers themselves.
On Republican attempts at union busting:
“Our Southern brothers and sisters don’t get $24 an hour out of the kindness of the auto owners’ hearts,” he said. “If there wasn’t a union in the North they’d be getting $10 an hour.”
From Alan Maas at Znet on Obamanomics:
The real common denominator among the economic team seems to be a relationship with Robert Rubin, the former Treasury Secretary under Bill Clinton and now head of Citigroup, the Wall Street giant that had to be rescued from the brink by a $300 billion federal bailout.
During Clinton’s presidency, Rubin engineered the administration’s adoption of the pro-free market agenda known as neoliberalism–including, for example, deregulation of the banking system that allowed the wild speculation on Wall Street at the heart of the current crisis. Now, though he isn’t in the new administration himself, his acolytes hold top positions.
One is Larry Summers, Rubin’s deputy at the Treasury Department and his successor as treasury secretary toward the end of the Clinton years. He’ll head Obama’s National Economic Council.
Summers was one with Rubin in opposing new financial regulations as the high-risk market in esoteric investments called derivatives began to thrive. Along with Rubin and then-Federal Reserve Chair Alan Greenspan, he was part of the trio dubbed the “Committee to Save the World” by Time magazine for promoting neoliberal policies that helped set the stage for the crisis underway now.
Previously, Summers was chief economist for the World Bank, imposing the gospel of neoliberalism in less developed countries. Summers was notorious for a memo he signed that argued poor countries in Africa were “vastly UNDER-polluted,” and that “the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable.”
Timothy Geithner, Obama’s Treasury Secretary, is also a protégé of Rubin’s, having served as an under-secretary in the Clinton-era Treasury Department. Since 2003, he’s been the head of the Federal Reserve Bank of New York, where he helped engineer the government response to the financial crisis.
Recent Comments