Three and a Half Economists
Over the last few weeks until today 18 August 2011, several noted economists and financiers have been proposing ideas. Three of these guys stand out:
1. Nouriel Roubini was basically arguing against short-term austerity and for middle-term austerity (meaning probably short-term intelligent stimulous of some kind and austerity by mid-2013)
2. Ha Joon Chang argued for:
a. A UN Ratings Agency
b. Ban on CDS Credit Default Swaps and other complex instruments
c. Ban on ALL tax havens
d. Revising incentives for financial sector workers so as to deincentivise risky trades
e. Creditors to share sovereign debt losses (particularly relevant to the European situation)
3. Today Jeffrey Sachs pitches in. I must confess to disliking the guy, ever since he point blank refused over 6 weeks late 2006 to discuss or even acknowledge my Fraud Proof Voting Project for the Third World. I still dislike and distrust him for that, but must confess that his arguments today largely make sense.
4. His case I set out as follows, since I think that he (like most writers) lacks logic and conciseness:
5. Markets are collapsing in Europe and USA
6. Reason is no economic strategy and zero or weak leadership
7. Problems are global capital markets plus Asian (Chinese) competition
8. Globalisation is the problem
9. Low skilled jobs have moved to low cost areas (mainly China)
10. Most industrial investment has also gone to these same low cost areas
11. USA and UK/Europe housing booms kept unemployment low before bursting. A new housing boom is no solution (will not come and if comes will not have good consequences)
12. We NEEDED –
a. Better skills
b. More exports
c. Public infrastructure investment
d. Public investment in green/low-carbon energy
13. We GOT –
a. Austerity without investment
b. Stimulous which has been consumption oriented only
14. RESULT – no jobs
15. Super-rich have gained from globalisation
a. – they have encouraged and demanded low corporate taxes and have set governments against each other in a race to the bottom
b. They extensively use tax havens and park their money there so as to pay zero or minimal tax
16. We Now NEED –
a. More public investment in education and training
b. More public investment in infrastructure (which can be self-financing with good future pay-back)
c. To greatly reduce and/or eliminate the cost of foreign wars in Iraq, Afghanistan, Libya, Pakistan, Yemen etc..
d. Tax increases for the rich and corporations in the medium term, giving us balanced budgets in the medium term (Weir Note – presumably 2013/2014?)
17. We also need EXPORT-LED Growth, through:
a. Better skills from the education and training
b. Better technology (through R+D?)
c. By financing e.g. Africa to buy our machinery and infrastructure, as the Chinese have done
18. Petty political manoeuvrings and need-to-get-reelected however in USA and also in Europe is messing everything up – the world is in a crisis, and every politician is behaving with narrow national interest or – even worse – narrow political party interest. Instead of behaving like statesmen while the world is in crisis.
End of Sachs’ exposition….
19. Export to whom? (Africa? – do they have any money? – but see the item 2 spaces below…)
20. Why not call for complete ban on tax havens as Chang as done? (very radical stuff!)
21. Why not call for a 40% royalty on all minerals, but especially those extracted in Third World Countries? Along with Fraud-Proof Voting (TOO Radical!) and Universal G2P (Government-to-People payments), and maybe Payment Commissions replacing Finance Ministries in Third World Countries, and maybe an insistence on Kind Capitalism (as opposed to the nearly universal Cruel Capitalism which we are seeing everywhere these days), these measures could turn around the world economy and give us all the boost we need.
I like all 3 contributions, and of those Chang’s are easily the best. But he had to publish in the Guardian, unlike the other 2 who were in the prestigious Financial Times. I guess because Chang called for the total ban on Tax Havens then FT would refuse to publish….
So – I recommend Chang’s 5 point plan plus my stuff as above added in….
Unfortunately, the rich and powerful don’t like these kind of measures….
So – what we need is for the People – en masse – to shake off this Conventional Wisdom that only so-called Economists and so-called Financiers and so-called Financial Experts can judge the quality of measures! Like IT guys, they hide selfish and globally-destructive proposals and decisions behind a smokescreen of jargon.
Seize the Time! Break on Through to the Other Side!
We have nothing to lose but our Poverty and our impending worsening Poverty, and the Poverty of 95% of the World’s People.
Alex Weir, Gaborone, Botswana, Thursday 18 August 2011