Posts Tagged ‘World Bank’
US government forging the dollar
Posted on: July 26, 2010
International financial institutions, backed by the US government, created vast operations of fraudulent mortgage schemes as witnessed since 1990. First, the Saving and Loans banks were “saved” by Bush Sr. infusing $500 billions with tax payers money. The mortgages were estimated to have 100% probability of losing their entire values. The federal government and the Saving and Loans banks knew what they were doing. The two powers knew that homeowners would never be able to pay the interest. Then, a new scheme was invented called “re-financing”
Those junk mortgages were re-sold on the world market and packaged “as sure as treasury bonds”. This re-packaging scheme was called “derivatives” (as drifting money operations). James Kenneth Galbraith, professor at the university of Texas, labeled these schemes as “identical to forging money, no more no less”
First, the tax payers (the honest hard-working citizens) paid for the saving and Loans banks in 1990, then they re-paid these fraudulent “faked money” mortgages in 1997, and then, after the Big Financial Crash. Over one trillion dollars covered the fraudulent operation under the knowledge and ascent of the successive US Administrations.
The US government have been forging dollars since Nixon uncovered the dollars that was seemingly supported by gold reserves. It is not over. The forging of dollars is going strong and private investors are being scammed every day.
Every time, the US Treasury states that the US economy is strong; when the federal Reserve governor states that the financial state is stable; when the president states during the State of the Union that the US status is strong and secure then, you may say that the government is still forging dollars.
The dollars is disseminated by political pressures; because the US Administration controls the “World bank” and the “International Monetary Fund”; because the US aircrafts carriers roams all oceans and seas.
Wall Street is going strong and hiring. Over new 160,000 jobs were opened by Wall Street that covers 20% of the budget of the State of New York and 12% of the City of New York.
How Globalization can function adequately for the poorer countries?
Globalization is functioning according unilateral “rules of the games” in international institutions. Joseph Stieglitz, Nobel Prize for economics, had written a book in 2002 “The great disillusion” where he critiques the function and ideology of the international institutions such as the World Bank, the International Monetary Fund, and the World Trade Organization. I have already published reviews in two parts of the book.
This post focuses on Stiglitz’s recommendations for the international institutions (supposed to be public institutions) to reform in order to give a chance for Globalization to effectively comes to the rescue of the developing States. Thus, in order for world economy and financial stability be the norm then, three urgent reforms are needed.
First, the international institutions such as the World Bank, the International Monetary Fund, and the World Trade Organization have to focus on collective global problems that require collective participation. For example, when global market economy is not running satisfactorily; when one State harms others and gets away with it (no indemnization procedures) then there are over production of certain commodities and under production of others. We have to tackle defense spending that does not generate any public benefits.
For example, public education sectors must be financed by international institutions since private sectors have failed to consider that urgent facet in states’ economy. For example, we have the environment, oceans, atmosphere, CO2 emissions and the other harmful gases, sanitary challenges and discharges, clean water sources, diffusion of contagious diseases, famine, and natural calamities are becoming global problems that require global resolutions and cooperation. All the global problems are interrelated: poverty leads to degraded environment and deforestation which in return increases poverty. There are financial interventions that are beneficial locally in reducing local pollution.
Second, the mode of governance such as control, management, decision-making and administration of international institutions has to be drastically reformed. The economic and financial interests of developed States have established unilateral set of rules and regulations on how to be applied globally without any serious input from the concerned parties in the developing countries. Developing States were targeted for hegemony behaviors. For example, in the IMF administration it is the finance ministers of the developed States and their central banks governors who are presiding as decision makers. In the World Trade Organization it is the ministers of commerce in the developed countries that run the show: they have particular perspective in matters of global trade. Who has the right of vote in these international institutions? The poor States and the workers have no representatives in these institutions to offer pertinent alternative feedback as to their difficult situations. The voting rules and representation around the table of decision makers have to be reformed drastically. The fact is that the IMF is rich because it is the developing countries that are reimbursing their debts at high interest rates.
At least, reforms in the structures of official direction in the IMF and WB can help in the short-term. For example, African delegates should be allowed to participate and be listened to even if they still cannot vote. Participation in meetings can aid the developing State representatives gather pertinent information and intelligence on world problems may partially fill the gap in intelligence dissemination. The IMF and WB should invest in developing “think tanks” institutions in the developing countries in order for their representative to be at par with ongoing discussions.
Third, transparency within the international institutions administrations have to be made public since they are public. Public pressures should be directed toward greater transparency in management and decision processes; on time data should be available for the concerned parties and not only for the multinationals and the developed State governments. There is urgent need to open the working environment to independent and free press and researchers of developing countries. Transparency is best catalyst to encouraging democratic tendencies in developing States and fair availability of information in a timely fashion.
Thus, favoritism in behavior and focus on the interests of the richer States must be examined and expressed by the public before conditions escalate to global problems. As deliberations in international institutions become accessed directly to larger audiences, instead of being held in closed chambers, then the environmental challenges and the interests of the poorer sections in world societies will be heard and discussed openly. The current decision processes are not critiqued and analyzed by the public on a timely manner: it is generally too late to critique wrong decisions before they are applied. Public access to timely information and intelligence would pressure the IMF and WB to reconsider their debatable economic assumptions and ideology; so far, what is decided is restricted on “what is good to the financial institutions”.
Mass protests in World Forums were mainly targeting the secrecy and opacity of the decision processes. So far, the disseminated information by the current structures of the international institutions is viewed with great suspicion by the poor States; so far, reforms were lukewarm and basically the kind of talked intent for reforms but not effective in practice.
Adonis Diaries 