Posts tagged Opinion Piece
Posts tagged Opinion Piece
He was once a liberal law professor who campaigned against the Iraq war. Now, according to revelations last week, the US president personally oversees a ‘kill list’ for drone strikes in Yemen and Pakistan. Then there’s the CIA renditions, increased surveillance and a crackdown on whistleblowers. No wonder Washington insiders are likening him to ‘George W Bush on steroids’
Spurring growth will be a huge task
At the G8 in Camp David, the richest countries have agreed to boost growth, particularly in Europe. This requires a radical change in tack from the austerity policies pushed so far. Are the leaders ready?
In 1990 Sweden suffered a severe financial crisis provoked by the bursting of a housing bubble, which was sorted out to some extent by creating a “bad bank” for each entity in difficulty. The government took swift action to rescue troubled banks, whose losses came to 12 percent of GDP. After the financial crisis came a recession that saw real growth (adjusted for inflation) fall by four percent. It would be another four years before the Swedish economy returned to pre-crisis GDP.
History teaches that prosperity cannot be had without a financial system that works normally (generating credit to households and businesses), and that the mere fact of stabilising the financial system is no guarantee of prosperity. What is needed is a rescue plan for the real economy to boost production and create jobs that is at least as intense in its goals as the bailout.
This has been forgotten in Europe over the past two years, with results obvious to everyone: the risk premiums of countries in trouble have not dropped, nor have those states cut their deficits as expected. Almost all of them have increased the public debt and have seen rises in unemployment, in the impoverishment of the middle classes, and in business mortality.
The G-8 Summit at Camp Davis is now trying to stave off total collapse and generate support for banks and for citizens too. Is the intellectual climate of our times truly changing, shifting from austerity to growth? That’s what the final communiqué of the meeting says. It is time to escape the Minsky moment (named after the economist of the same name) in which debtors cannot pay, creditors do not want to pay, and everyone is trying to write off the debt at the same time.
Kirchner’s and Morales’s renationalisation of energy companies has been seen as mere populist demagoguery. But it was a response to toxic speculation
While Europe forces yet more privatisation on Greece and Spain under the Orwellian name of “liberalisation”, Latin America in 2012 is challenging the orthodox view that private always is better than public. On 1 May Bolivia seized the Spanish company that controlled its electricity grid, just after Argentina, on 14 April, effectively renationalised YPF, its main oil company, expropriating 51% owned by Spanish firm Repsol. Both critics and supporters have understood Cristina Fernández Kirchner’s and Evo Morales’s actions in terms of energy nationalism and populist demagoguery. But we should see both instead as responses to the failures of privatisation and its toxic connection to complex forms of financial speculation.
Bolivia and Argentina have both shown that private firms were investing less, not more, than their public predecessors were. Morales noted that only $81m had been invested in Bolivia’s electricity grid since privatisation in 1997. YPF in the 1990s drilled three times as many exploratory wells in Argentina as it did in the 2000s under Repsol. Argentina’s oil and gas output was falling, and new reserves were not being found to replace exploited deposits.
In both cases Spanish multinationals had prioritised the repatriation of dividends over investment. This indirect form of asset stripping was driven by the priorities of bankers in London and New York. Behind the Repsol-YPF affair, in particular, was something very close to the sick capitalism that caused the 2008 crisis: high-yield, high-risk assets, sliced and diced via complex derivatives.
Pictured: President Kirchner holds a sample of the first petroleum extraction in Argentina as she announces that YPF is subject to expropriation. Photograph: Daniel Garcia/AFP/Getty
BOSTON — It was no coincidence last week when Iran’s Supreme Religious leader, Ayatollah Ali Khamenei, praised a 64 percent turnout for parliamentary elections at home as well as President Barack Obama’s words that dampened talk of war against Iran. The elections gave him a commanding authority at home and a freer hand to deal with foreign threats.
In a rhetorical style that was less hostile than usual, Ayatollah Khamenei hailed Obama’s comments as “good words” and called them “an exit from delusion.” Meanwhile, his nuclear negotiator, Ali Asghar Soltanieh, resumed talks in Vienna over Iran’s controversial nuclear program with five western powers including China for the first time in more than a year. He called the talks “a new chapter.”
The EU austerity disaster
BERLIN, Germany — Europe is on the hunt for growth, but has little idea where to find it.
Many EU countries are being forced to follow a strict austerity path to slash their debts, but these measures seem to be sapping their ability to grow their economies and create jobs.
Some analysts warn that in the absence of measures to boost growth, more bailouts and debt write-downs could be in the cards.
The latest figures are certainly worrying.
The euro-zone economy contracted by 0.3 percent in the fourth quarter of 2011, the EU’s statistics office Eurostat confirmed on Tuesday, and unemployment reached an average of 10.7 percent in January, the highest since the euro was introduced in 1999.
That figure masks the huge discrepancies within the bloc. For example, while Spain’s unemployment is now at 22.9 percent, Austria’s is only 4 percent.
Pictured: European Trade Union members demonstrate for employment and social justice in front of the EU Council in Brussels, Wednesday Feb. 29, 2012 (Credit: AP Photo/Geert Vanden Wijngaert)
Will Putinism see the end of Putin?
Assassination plots aside, Vladimir Putin expects to be returned to the Kremlin. But who is the man who has ruled the world’s largest country for longer than anyone since Brezhnev?
On a Friday night last November Vladimir Putin was running three hours late. A group of foreign academics, journalists and selected Russian TV cameras were quarantined in a restaurant in an equestrian centre. Deadlines were lapsing and Putin’s guests began asking questions about the odd location. Everything from the oak beams, log fires and snug bars had been rigged. The venue had been constructed for this one meal.
Putin finally emerged wearing a ski jacket. He stopped short in the entrance with his hands down but away from his sides. An unseen hand removed the puffer jacket, another slipped an elegant sports coat onto his shoulders. Putin hardly paused, but in a flash he had changed roles. He emerged on the other side of this catwalk as the tanned chief executive of Russia Inc.
He had just made the biggest mistake of his career. In front of millions of people, he forced his protege, Dmitry Medvedev, to nominate him for another two terms as president. In a spectacular miscalculation of political timing, Putin had destroyed not only Medvedev’s fledgling career as a reformer but severely damaged his own. He had made nonsense of the elections that followed – a parliamentary vote in December and the presidential one this coming Sunday – because everyone already knew the result. This might have worked for the old Russia – passive, fatalistic, offline – but the new, pushy middle class was not buying it.
Four mass demonstrations later, Putin’s campaign is on a knife edge. He has to be elected president on the first round on Sunday. If he succeeds, most political analysts in Russia are agreed that a third term of office as president will be a transitional one. There is unlikely to be a fourth.
Pictured: Vladimir Putin: from KGB agent to prime minister to embelm of an ideology Photograph: Konstantin Zavrazhin/Getty Images
Drive Greece out of the euro, and build a federal Europe behind a protective firewall? Italian columnist Barbara Spinelli warns that this idea, which appears to be gaining ground with a number of European leaders, would not only fail to resolve the crisis but would also put an end to Europe’s common culture.
Originally published in La Repubblica, Rome
Graphic by Beppe Giacobbe
After eleven years of war the Taliban’s public declaration that they will hold talks with the United States in Qatar is a major breakthrough for the political process, for Afghanistan’s internal stability and for the relative peace that will be needed by the US and NATO in 2014 before they can exit Afghanistan in good order and without too much bloodshed.
The year-long clandestine talks brokered by the Germans, fostered by Qatar and eventually ending in direct meetings between US officials and Taliban representatives will hopefully lead to a major reconciliation with the Kabul regime.
The Taliban’s present insistence that they will only talk with the Americans is not realistic in the long term, while Karzai’s recent policy flip-flops and contradictory statements belie the fact that he was kept in the loop every step of the way by the Germans. The talks will go ahead because there is no other alternative to ending the war.
Egypt has seen a resurgence of unrest after last week’s deadly attack on football fans loyal to the revolutionary movement. One eyewitness reports being amazed at how few police were at the match in Port Said. The military has denied it orchestrated the violence — but it stands to gain from the chaos.
This is a novel approach to getting the Greeks to do what the international lenders (aka the Troika) want: tell them that not only can they not choose their own prime minister, but if they don’t get their policies right, the eurozone will put their own commissioner in charge of making the decisions. Or else they won’t get the next tranche of their bail-out money.
Democracy, humanism and diversity have little to do with a “European inheritance”. Yet EU cultural policy instrumentalizes cultural heritage to promote common identity. This narrative bias needs to be challenged, says Erik Hammar.