A commonly heard expression among politicians and newspapers during this economic crisis has been the phrase “too big to fail”. It refers to the basic principle under capitalism that in times of crisis, which capitalism necessarily engenders every now and then, the largest companies and banks cannot be allowed to go bankrupt. Smaller businesses can go bankrupt, millions can become unemployed, but a truly ‘free’ market solution of bankruptcy for all overinvested corporations would so thoroughly destroy any modern advanced economy that it would inevitably lead to revolt and revolution. To stave this off, any amount of tax money and borrowing is therefore justified to save banks and companies of such size that their fall would risk taking everything else with it. As a result, real unemployment in the United States is estimated to be around 16%, yet enormous sums in the billions of dollars have been borrowed by its government to prop up the profitability of its largest banks and insurers, from AIG to Goldman Sachs.(1)
Yet rarely is this expression used for an entire country, even though there is no reason why entire economies should not have the same position within regional wholes. Where Iceland has now gone essentially bankrupt as a result of its ultraliberal banking policies and the subsequent extortion of its debtors by the Netherlands and Great Britain, its small size and relatively one-sided economy prevents this from becoming a major economic problem. The same cannot be said of Greece. Continue reading “Crisis in Greece”
When an earthquake of 7.0 on the Moment scale struck the country of Haiti recently, this led to a total collapse of the government, economy and social institutions of this already plagued country. Some 200.000 people are estimated to have died, on a total population of about 9 million – the proportional equivalent of some 7 million Americans dying at once. It killed also the opposition leader, the Archbishop, and most of the staff of the United Nations mission in Haiti, MINUSTAH. There has subsequently been an outpouring of foreign aid and medical support from many countries around the world. And yet the question about this long-suffering country remains: how come it was so poor and so unprepared? Haiti is not far from the United States, one of the world’s richest countries, and yet it is itself one of the world’s poorest, and has been so for a long time.
To understand Haiti’s history, we must go back to the days of Columbus. Continue reading “Crisis in Haiti”
Two developments from central Asia dominate the news: on the one hand, there is the higher pitch of battle in Afghanistan, where the new ‘surge’ strategy by America and its allies seeks to regain control over the wayward provinces and political stability, and on the other hand there is the nuclearization of Iran during a time of internal strife in that country. Just now, coalition forces together with the hastily drummed up ‘Afghan National Army’ are assaulting a Taliban stronghold in the backward and dangerous province of Helmand, attempting to dislodge the Taliban from the southern provinces and regaining the political initiative. This latter point is relevant because of the fiasco of the recent elections for the Afghan Presidency. These elections were widely suspected to be fraudulent, including by the foreign commission to supervise them, but more importantly perhaps the turnout for them was vastly lower compared to the first elections not long after the defeat of the Taliban. The cynicism which saw Hamid Karzai retain power despite the fraud and the manner in which he managed to call the Americans’ bluff when it came to replacing him over it will do nothing to reinvigorate the flagging Afghan confidence in their new government structures. Karzai in the meantime is attempting to consolidate his now more independent position. He has always been much more favorable to the warlords and more inclined to compromise with the old forces than the West and its supporters in the region enjoyed, but now the Americans have shown themselves unwilling or unable to find an alternative to his rule, he can more safely afford to ignore their political demands in the domestic arena. This is shown in practice by his proposed electoral law changes, which would make candidates for office highly more dependent on external financing (i.e. robbery and drug trade, like the warlords) and reduce the participation of women in national politics, much disliked by the traditionalists whom Karzai persistently seeks to win over.(1)
All of this therefore makes it clear that the Americans and their allies in Afghanistan have to make a good showing on the scene to regain the initiative and the attention of the Afghans. Everything depends on the degree to which the Afghan population overall perceives the current situation, including occupation, as superior to the alternatives. Continue reading “More on Afghanistan, Iran”
The British arms manufacturing giant BAE (British Aerospace) has been fined some 286 million pounds sterling for bribing government officials in Third World countries to place orders with their company.(1) Among other activities, they bribed officials in Tanzania to order an advanced radar system for defense in that country, even though Tanzania is not likely to be at war with anyone and is one of the poorer nations in the world. What makes the case all the more remarkable is the fact that earlier on British prosecutors intended to prosecute over bribery of Saudi officials to the same purpose, but that a combined action from then Prime Minister Tony Blair and the Attorney General, Lord Goldsmith, quashed the case, in order not to offend the Western ‘allies’ in Saudi Arabia. In this manner, they showed that neither rule of law nor combating theocracy mean anything to the gentlemen politicians who rule our countries, but that only strategic maneouvers do. Little seems to have changed since the days of the ‘Great Game’ and the Victorian approach to international relations. Continue reading “BAE and the Arms Trade”