|May the source be with you, but remember the KISS principle ;-)|
|Contents||Bulletin||Scripting in shell and Perl||Network troubleshooting||History||Humor|
|News||Political Economy of Casino Capitalism||Recommended Links||Corruption of Regulators||John Kenneth Galbraith||Hyman Minsky||Recommended Blogs|
|Critique of neoclassical economics||Supply side Lysenkoism||Trickle down economics||Rational expectations scam||Monetarism||Criminal negligence in financial regulation||Financial Sector Induced Systemic Instability|
|Helicopter Ben||Bush||Clinton||Jeffrey Sachs and "shock therapy" racket||Milton Friedman||Phil Gramm||Greenspan: Grey Cardinal of Washington|
|Ronald Reagan: modern prophet of profligacy||Rubinism||Lawrence Summers||Sandy Weill||Martin Feldstein||Financial Humor||Etc|
To say that ... is the lackey of the largest banks is really an understatement.
Economics without Politics is like sex without a partner...
Sachs life achievement is the corrupt sale of Russia's state economy to oligarchs following the collapse of the Soviet Union;
Shock therapy is a form of "disaster capitalism", i.e., introducing radical changes in terms of economic and government policy when a country is in shock (taking advantage of the fact that mass resistance is unlikely at this stage as people are concerned with the survival), is allowing the rise of unchecked multi-national corporations that take advantage of and damage the society in the process.
Neoliberal "shock therapy" has repeatedly been implemented without the consent of the governed by creating and/or taking advantage to multinationals, selling country wealth for penny on a dollar.
In the early years, the primary vehicle of colonization was direct military force
and accompanying fear of arrest, torture, disappearance, or death. Over time, new
organizations such as the IMF and the World Bank were employed instead, using or
creating impossible debt burdens to force governments to accept privatization of
state-owned industries and services, complete removal of trade barriers and tariffs,
forced acceptance of private foreign investment, and widespread layoffs. In case
of the xUSSR region the policies were applied on people too shocked to realize what
was happening until it was too late.
Shock therapy was the "medicine" deemed necessary to convert xUUSR state into new Latin America. Good collection of fact in this venue can be found in Ms. Klein book. She argues her case in convincing detail a long chronological line of historical cases. Each chapter in her book surveys one such situation, from Chile under Pinochet and Argentina under military junta through Nicaragua and Honduras, Bolivia under Goni, post-apartheid South Africa, post-Solidarity Poland, Russia under Yeltsin, China since Tiananmen, reconstruction of Iraq after the U.S. invasion, Sri Lanka after the tsunami, Israel after 9/11, and New Orleans post-Katrina. Along the way, she lets various neoliberal economists and Chicago School practitioners speak for themselves - we hear their "shock therapy" views in their own words. As just one example, this arrogant and self-righteous proclamation from the late Professor Friedman: "Only a crisis - actual or perceived - produce real change...our basic function, to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable."
Ms. Klein argues that from its humble beginnings as an economic philosophy, the neoliberal program has evolved (or perhaps devolved) into a form of corporatism. Particularly in America, government under mostly Republican administrations has hollowed itself out, using private sector contractors for nearly every conceivable task. Companies ranging from Lockheed and Halliburton to ChoicePoint, Blackwater, CH2M Hill, and DynCorp exist almost entirely to secure lucrative government contracts to perform work formerly done by government. They now operate in a world the author describes as "disaster capitalism," waiting and salivating over the profits to be made in the next slate-wiping war or disaster, regardless of the human cost. In an ominous closing discussion, Ms. Klein describes the privatization of government in wealthy Atlanta suburbs, a further step in self-serving and preemptive corporatism guaranteed to hollow out whatever is left of major American cities if it becomes a widespread practice.
January 15, 2009 | NYTimes.com
Sachs has a long history of minimizing the negative side effects of his policy recommendations.
When all else fails, try to refute statistics. It would be useful to see historical trends of trade between Russia and the EU and US over the period compared to similar statistics for the other former Soviet states.
I looked around, but I didn’t find any, perhaps someone who is more of an expert knows where to look.
Poland got massive aid. The Czech Republic was already among the richest of Eastern European countries and Slovenia had most of Yugoslavia’s capital and a standard of living that was comparable to that of Italy.
Meanwhile privitazation in the Soviet Union was handled by Boris Yeltsin, a bumbling alcoholic who hoped to curry favor with the US, which he did not.
But the real meaning of this study is this. Privatization did not create any real wealth or increase efficiency. It just concentrated wealth in the hands of a few Robber Barons and destroyed the social safety net – which in Eastern Europe was linked to the firms.
Which is why the Russians love us so much. I am sure that they have a special place in their hearts for Mr. Sachs.
Maybe he should give a speech in Moscow defending shock therapy?
I grew up cold and hungry in the former Soviet republic of Armenia during the shock therapy years of the 90′s; my grandfather was one of the 3 million who died prematurely during those days (incorrect medication and power outages did him in). I would very much like to tie Mr. Jeffrey Sachs to a chair and slowly force-feed him every worthless page of every idiotic policy paper he’s ever written. I believe that would justly mirror the diet that I had to subsist on for a number of years during my childhood and adolescence.
Sachs knows nothing about health and diet and has not earned the right to dismiss findings of qualified researchers. If he wants to do the research to prove that the disasters in Eastern Europe after the adoption of laissez faire (including the obvious: oligarchy and criminal gangs) were not caused by “unfettered capitalism,” he can do the research. His unsubstantiated denials are not worthy of being quoted.
And, while we are at it, what about the failure of “unfettered capitalism” in this country, which has had higher morbidity and lower life expectancy than the rest of the developed and some of the underdeveloped world. And that was before the “market forces are God” nonsense led to the latest disaster.
Jeffrey Sachs was merely the ’90′s propagandistic mouthpiece for this “shock therapy,” whose use is always strictly limited to the poor and defenseless. And he’s certainly no different from any other of the many “free market” court jesters costumed as academics. The corporate court kings told him what to say, he said it in the usual inane and convoluted academy-speak, and he then profited quite handsomely from this same “shock therapy.” Just as some medical doctors seek to prescribe medicine that will raise the value of their stock, Sachs wrote “free market” prescriptions for the masses of the Russian population while knowing he would reap huge profits when his corporate kings forced this population to take this medicine. It’s important to bear in mind, too, that like these doctors, he had no hand in actually making this medicine; his duty was simply to prescribe it widely in his guise as a “professional economist”—when in fact he was a paid corporate shill. Arsen Azizyan’s comment above is no doubt the voice of thousands of others who greatly suffered (or died) from Sach’s “shock therapy” prescriptions.
Alexandre Abbas Rizvi
To Mr Sach’s and his ideological master Milton Friedman’s achievements through shock therapy I would add Chile, Bolivia, and Argentina where suffering of the general populations was similar to the Soviet Union. However, I do not know whether there is any data on the death rates resulting from the shock therapy in South America. I suppose the effect of shock on the general population in the Soviet Union from the social safety net abruptly degrading to a brutal system of dog eat dog was worse than any we can think of.
The editor of The Progressive Manazine (January 2009) discusses Naomi Klein’s take on how the Shock Doctrine affected Russia when Lawrence Summers was chief economist for the World Bank “when it was foisting structural adjustment policies on developing nations.”
From Klein’s book:
“The momentum for Russian reform must be reinvigorated and intensified,” Summers said after the [Russian] parliament had refused to go along. Shortly after that comment, the International Monetary Fund threatened to withhold a $1.5 billion loan. So Boris Yeltsin dissolved and attacked parliament, abolished the constitution, and bowed to the IMF’s and Summers’s demands” for “privatization, stabilization, and liberalization.”
“Russia’s ‘economic reforms’ can claim credit for the impoverishment of seventy-two million people in only eight years.”
The IMF and World Bank have demanded similar “reforms” from many poor countries needing aid. Poverty and LACK OF UNIVERSAL, TAX-SUPPORTED HEALTH CARE both result in a less healthy population and earlier deaths. I believe the study’s analysis to be accurate.
To argue, as Jeffrey Sachs and Nathaniel Knight do, that the increase in death-rates in post-Soviet Russia began long before privatization does not necessarily invalidate the findings of the British researchers. Were the increases in death rates before privatization of the same magnitude as after the collapse of the USSR? Did they stem from the same reasons cited by the British researchers as responsible for increased death rates in general, viz., a worsening of social services, the weakening of and withdrawal from civic life, etc.? Were there increases in death rates elsewhere in eastern Europe in the 1970s and ’80s?
Seems to me that there is a lot of clinging to ideologically-derived shibboleths here. —
In today’s NYT Thomas Friedman makes a persuasive argument for a self imposed shock therapy solution to cure the current economic collapse. Unfortunately there are many unpleasant parallels between the situation in the former Soviet Block in the 1990s and America today. Large numbers of workers have been and will continue to be displaced. There is no medical safety net for those who have been laid off. Banks don’t know how to lend and the economic pillars that support the old model no longer apply. It will be extremely difficult for Americans (particularly the middle aged) to adapt to Mr. Friedman’s flat world.
In the 1990s many wondered how the millions of jobless workers in Russia and Central Europe would adapt to capitalism. There were millions of lost souls wandering the streets of Moscow, Katowice, Kiev and East Berlin. The cynics short answer was those who can’t adapt will have to die off. Now it appears such statements rang true.
These studies highlight the challenges that must be addressed by President Obama’s administration. Is America ready for Shock Therapy?
As the authors of the Lancet study that has provoked this debate, we regret that some commentators have resorted to personal attacks. We wish to stress that we hold Dr Sachs in high regard, not least for his leadership of the Commission on Macroeconomics and Health, even if we disagree with him on this issue. Similarly, we hope that those who criticise our methods and conclusions will read our paper. Papers published in the Lancet undergo an extremely rigorous peer review process so perhaps those commentators who believe that we have got it wrong will help us by identifying specific criticisms, rather than issuing blanket condemnations. Specifically, we find the suggestion that we are unaware that correlation does not equate to causation patronising in the extreme. Turning to the proposed explanations of the post-Soviet mortality crisis, we fear that some commentators fail to understand that death rates in a population reflect factors acting at many levels. In the present study we have focussed on underlying social and economic factors, showing that while unemployment is clearly a factor linking privatisation and mortality, it does not explain all of the association. However, our present study builds on a substantial body of previous research (including over 70 papers published by one of us, in association with colleagues from the former Soviet Union) looking at the immediate factors in the fluctuating mortality post transition as well as the long term problems dating from the 1960s. These show how alcohol, in particular, plays a major role in the former (we might take this opportunity to clarify that the poor diet in this region is indeed a factor in the high overall mortality but not in the fluctuations). We welcome the interest in this region that our study has stimulated but we hope that, in the longer term, it will encourage more people to gain a deeper understanding of what happened in the early 1990s rather than use a superficial reading of our findings to fight other battles.
I can relate and so can everyone in my Russian/Ukrainian community to Arsen Azizyan comment above.
I wonder if these researchers, professors, economists would write the same papers if they actually had lived there, seen it, experienced it on their own hides. In my country we call these types of papers “заказуха” or “zakazuha” meaning that someone placed an “order” for facts or theory and the order was delivered. There are many for hire in the academia.
Thank you Dr.’s thank you for making us understand why so many of our people suffered, died, and are still suffering the consequences of your theories.
HIID eventually collapsed in scandal, when it was revealed that the principals of its Russian project, Andrei Shleifer and Jonathan Hay, along with their wives (who happened to be mutual fund managers), had been buying Russian stocks and dickering for the privilege of getting the country's first mutual fund license, while dispensing advice to the Russian government. (Shleifer was one of the trinity of so-called Harvard Wunderkinder who were to Russia what the Chicago Boys were to Pinochet's Chile; the other two were Lawrence Summers - and Sachs.) The U.S. government sued, and Harvard shuttered the institute. Sachs, who was not involved in the scandal, decamped to Columbia (it's said there was no going-away party from his Harvard colleagues). At Columbia, he was appointed to head its new Earth Institute, an interdisciplinary enterprise that would bring together physical, health, and social scientists to promote sustainable economic development.
Sachs admits to no responsibility for the Russian catastrophe. When I interviewed him in November 2002, I asked him to comment on the (incontrovertible) fact that he's viewed by scores of millions of Russians, as one journalist has put it, as either an emissary of Satan or of the CIA. He answered that he found this question "disgusting," "perverse," and like nothing he's ever been asked before. The global elite leads a very insulated life.
Regrouping, to dissuade him from hanging up, I asked how he justified the tearing apart of the USSR and forcing the country headlong into capitalism when there was little popular support for such a strategy. He responded, illogically, by saying he "wanted to support...the democratization of the Soviet Union." He sung the praises of "transparency and honesty in government," even though the Yeltsin regime he was advising was opaque and corrupt. Asked to comment on published reports that he supported creating an inflation, so as to wipe out the savings of Russians (part of the shock therapists' attempts to start post-Soviet Russia with a clean slate), he bristled further, denouncing the quote as "phony," the question as "indecent," and the interview itself as not being in "good faith."
In his academic work, however, Sachs argued that since China was only very lightly industrialized, it could afford to take its transition slowly. Russia, however, was burdened with the bad inheritance of Soviet industry, which was hopeless and had to go.
...His father, who died in 2001, was a long-time Detroit labor lawyer and general counsel to the Michigan AFL-CIO. That puts his passion to destroy worker power in eastern Europe in an interesting Oedipal light - and might even explain some of the contradictions of Sachs's politics. But that would be speculative psychoanalysis of a suspect sort, so enough of that.
January/February 2000 | FAIR
Harvard's 'Best and Brightest' Aided Russia's Economic Ruin Institute that advised 'reform' fed corruption
A 1992 front-page story in the Boston Globe (9/22/92), "Red Square Turns to Crimson," announced proudly that Harvard experts were advising Russia in its conversion to capitalism. "Privatization stands as the centerpiece of Russia's economic-reform program," wrote the Globe. It was an equation the "best and brightest" from Harvard would drum home again and again to the media: privatization equals reform. The piece quoted the head of the Harvard Russia project, Andrei Shleifer: "Once you work with Russians for two weeks, you become a free-market enthusiast."
As more becomes known about the laundering of Russian money in Western banks, many in the United States will likely try to hide behind stories of faraway organized crime. But U.S. policy toward Russia has contributed to that country's sorry conditions--with the Harvard Institute for International Development's Russia project (HIID) playing a major role.
Among those under investigation for criminal activity in both the west and Russia is longtime Yeltsin aide Anatoly B. Chubais, the chief architect of Russia's economic "reforms." In the mid-'90s, Chubais and his clique of political and financial power brokers, known as the "Chubais Clan," were the darlings of the U.S. Treasury and international financial institutions--and of the U.S. establishment press.
HIID, together with the Chubais "dream team," as the Treasury Department's Lawrence H. Summers called it, presided over Russia's economic "reforms," many of them U.S.-funded, including privatization. But the so-called reforms were more about wealth confiscation than wealth creation. Privatization, which had substantial input from U.S.-paid Harvard advisers, fostered the concentration of property in a few Russian hands and opened the door to widespread corruption and funneling of monies to Western banks.
Chubais was briefly on the HIID payroll, and he is currently head of Russia's electricity monopoly. In 1995, the Economist magazine (4/8/95) projected that Chubais would be president of Russia by 2010. But by 1998, the New York Times (3/24/98) conceded that he "may be the most despised man in Russia" since "his early efforts at privatization were widely viewed as vast federal gifts to inside operators at the expense of millions of workers who got nothing but promises they cannot redeem."
HIID was in the unique position of recommending U.S. aid polices in support of market reforms while being a chief recipient of the aid--as well as overseeing other aid contractors, some of whom were HIID's competitors. HIID, Chubais and their associates played a major role in promoting themselves and the "reforms" in the Western media; for example in a 1993 Washington Post piece (5/7/93), Shleifer complained that the Clinton administration was allowing privatization efforts to "fall through the cracks."
A New York Times "Economic Scene" column (4/20/95) led thus:
Is Russia poised for economic takeoff? After three years of on-again, off-again reforms and with the Pyrrhic military victory in Chechnya still fresh in the news, skepticism comes easily. But little by little, wary analysts are abandoning their caution. "Russia is a real market economy now," says Andrei Shleifer, an economist at Harvard who has advised the Russian government on privatization.
Some of those associated with HIID allegedly profited directly from it. HIID helped established Russia's Federal Commission on Securities, roughly the equivalent of the SEC in the U.S. It was officially established by Yeltsin proclamation, and funded by the U.S. government through institutions run by those around the Harvard-Chubais coterie. The first mutual fund licensed by the Commission was headed by Elizabeth Hebert, who was the girlfriend of Jonathan Hay, Harvard's manager and point man in Moscow.
Harvard appears to have benefited from HIID's Russia connection. Harvard Management Company, the university's endowment fund, was allowed to participate in choice auctions of Russian government property, despite the fact that foreign investors were supposed to be excluded under auction rules.
In 1996, the GAO found that U.S. oversight over Harvard was "lax," and, following allegations in 1997 that Shleifer and the other Harvard principals used their positions and inside knowledge as advisers to profit from investments in Russia, the U.S. government canceled the last $14 million earmarked for Harvard. Shleifer, now under investigation by the Justice Department, was dismissed by HIID. (Still, Shleifer, who is a protégé of Treasury Secretary Summers, received the Clark Award from the American Economic Association this year, an award that Summers, who has been the architect of economic policy toward Russia, received in 1993. The association's president-elect, Dale Jorgenson, said Shleifer's scandal "was not even mentioned" in their considerations--New York Times, 4/26/99.)
In Privatizing Russia, co-authored by Shleifer with Chubais associate Maxim Boycko, they acknowledge that "aid can change the political equilibrium--by explicitly helping free-market reformers to defeat their opponents." Richard Morningstar, U.S. aid coordinator for the former Soviet Union, concurred (Collision and Collusion, Wedel):
If we hadn't been there to provide funding to Chubais, could we have won the battle to carry out privatization? Probably not. When you're talking about a few hundred million dollars, you're not going to change the country, but you can provide targeted assistance to help Chubais.
Leonid Krutakov, Russian investigative reporter for the publication Moskovsky Komsolets, noted that throughout the Yeltsin years, "both the foreign and domestic press created a central deception--a false set of 'alternatives.' The idea was pushed on both sides of that Atlantic that if you didn't support Chubais, you were supporting the Communists." Krutakov, who has broken many of the scandal stories, noted (eXile, 10/23/99):
Obviously it's difficult to come into a country blind and just evaluate the situation instantly. You draw your conclusions from people you meet. Western reporters came in and talked to Chubais, and Chubais tossed words around like "market," "profit," "openness"--all the right words. And this was the only view point of view they heard that made sense, as far as they knew.
I'm getting tired of Jeff Sachs acting like he is the only one telling the truth about the economy, the problems are all structural we are told despite considerable evidence to the contrary, and -- surprise!!! -- his "truthtelling" somehow leads him to advocate the same pet projects he's been pushing for years.
El Cid said...
Hey, Sachs knew EXACTLY what to do for Russia as it transitioned from the Soviet Union! He and the Harvard Institute for International Development got everything there PERFECTLY correct, no? And Russia's economy was, like, super-smooth after that! So this guy clearly knows.
I could handle Sachs a lot better if he had come forth with a sincere mea culpa for the significant role he played in spreading neoliberal supply-side pathologies around the globe. It's commendable if he's now trying to help undo some of that damage , but without the confession , he remains a sinner , one entirely lacking in credibility. He's not the only one , however. This page is littered with the names of his co-conspirators , if to lesser degrees. How hard would it be to say : " I was mistaken , badly. I'm sorry. Here's where I went wrong......" ? It would help to legitimize the debate , a lot.
Joe Smith said...
Is that the same Jeffrey Sachs who told the Russians to hand their economy over to organized crime?
Leroy Dumonde said...
I'm mystified as to why anyone is still listening to the man. He many years ago made utterly obvious that he is nothing but a shameless self promoter. Like Bono...
Ever since western colonialists embarked on colonizing the rest of the world, their actions have been based on a ever changing moral Zeitgeist; but the final aim was domination and exploitation of the vulnerable and trusting people of the world.
It was this morality that virtually ethnically cleansed America of the Red Indians. It was this same morality that made it legal to kill an Australian Aborigine until the mid-1950s. Closer to home, it was this same morality that made them cut off the hands of Bengali silk weavers as they were a threat to the Lancashire textile industry.
This is best epitomized by Bernard Shaw who spoke about the actions of the British being based on Principals which justified their actions, but the principals changed as and when necessary!
The Moral Zeitgeist at this moment of time is Democracy, and the vehicle for transfer of wealth is fiat money which President Obama most appropriately called Monopoly Money. It is conducted by the incestuous relationship between the bankers, the corporations and the politicians, supervised by the IMF and the World Bank, the gate keepers of this criminal world economy.
Corruption and this criminal economy work hand-in-glove, be it money laundering of illegal wealth gained by drug dealing or people smuggling. The price is ultimately paid by Humanity for the short term gain of a privileged few. The hidden hand of the beneficiaries is unknown, but what is known is that serious attempts have been made to maintain the status quo in spite of the economic problems in the world. The system has now high-jacked even the minimal benefits that ordinary citizens had with Democracy inherited from the colonialists.
Democracy in its entirety is a collection of various interconnected rights, based mainly in terms of equality pertaining to politics, culture and economics. Economics and corruption seem to be the main drivers of both politics and culture, which is fast creating social unrest in the world.
More and more people are revolting against being marginalized in terms of job opportunities, etc., but hardly ever are people mindful of the real culprit, which is the predatory world economic system. Democracy is the cry falsely implying that it means equality, fair play and morality. What is needed is Genuine Democracy and Human Rights. For that the politicians must be made to be morally accountable and that has to be enforced by the leaders of moral authority, especially the religious leaders and civil society.
Democracy and Globalization
In the present world, be it an Autocracy or a Democracy, there is a wide gap between the rulers and the ruled. Highjack the authority of the rulers by corruption, and you highjack the rights of the people. The Macaulay Syndrome during colonialism adapted to the present world order! In countries where authority cannot be imposed through the economic system, violence is the answer for regime change and obedience to the Neo colonial world economic order, imposed as seen in Iraq and now in Libya, in the name of Morality and safeguarding the rights of the people.
The media of course gets its act together. Shock Therapy in Russia, Regaining Sri Lanka in Sri Lanka, or Reconstruction in Iraq; all planned and organized by the IMF, Bankers, Corporates, and ‘your obedient’ politicians bought by corruption in the world of politics in the so-called moral west. If not, could Blair have taken Britain to war when millions of British had taken to the streets protesting against the war? Recently in Greece and Italy, unelected technocrats were appointed as Prime Ministers under pressure from the European community. A referendum advocated by the Greek Prime Minister was abandoned - a blatant disenfranchisement of the people of Greece.
The hypocrisy is best epitomized by Italy which signed a friendship treaty two months prior to the NATO bombing of Libya, when Berlusconi kissed the hands of Gaddafi. Yet it had no qualms about abandoning a friend to join NATO against Gaddafi and was the first to send its oil companies even before Gaddafi was fully defeated to share the spoils of the oil wealth of that country.
Democracy in the sub-continent
The method of representation is by universal suffrage, hypocritically admired by the west as it is an easier route to the embezzlement of the wealth of a country, using what Obama called Monopoly Money in a virtual world economy. Much better than colonizing and bearing the burden of ruling the country.
Elections however cost money; therefore funding of political parties and funding of individual politicians becomes paramount. Corrupting this process allows access to local and foreign corporates to embezzle the wealth of a country. Politics from being a social responsibility for citizens who have the compassion to serve their country is now turned into a business venture. The purpose is to earn money and this ill-gotten wealth is used for acquisition of more personal wealth.
Thuggery and political patronage and purchase of votes are part and parcel of this business plan. It is said that in the Indian Parliament more than 25% are either accused of criminality or are criminals. Unfortunately, large sections of the electorate are completely alienated and discriminated against. The electorate is kept subservient by positions in public service, contracts etc., given by political patronage. The interference in the day to day affairs of citizens has created fear of politicians amongst citizens. The police, the Army and the secret services are maximally used to suppress dissent. Not surprisingly, a majority of officers appointed by political patronage are inefficient and corrupt; this brings the institutions to a virtual standstill.
Corporate politics and disenfranchisement of the people
Under the guidance of IMF and World Bank, the welfare programmes of every modern society have been gradually reduced. Education is the biggest Trojan horse for continuation of the exploitative legacy of the colonialist. Macaulay achieved his programme of slavery of the mind which continues for over a century. An assessment of young Members of Parliament in India shows that 50% are from Political Families. These MPs who were largely educated in the west had closer connections with their friends in the west than with their own constituencies. What a triumph for Macaulay: Robots that do the bidding of the International establishment.
Embezzlement of citizen’s wealth is the name of the game. It comes in many forms – Privatization, Corporate Land Grab, Loans taken pawning future generations, Major infrastructure projects which are overpriced, and Devaluation of currency by printing etc. The ruling classes, Corporates and lumpens embezzle the wealth and the price is paid by hard-working people not only in terms of the unbearable cost of living, stealing of their pension savings, and of course, the ever increasing suppression and loss of freedom.
In addition, these societies are now brought into a system of an inefficient market where they cannot even go to their doctors for a genuine consultation as the consultations are commission-based. The more the investigations, the greater the commissions, and the greater the doctors’ earnings. What they don’t realize is that there is more wastage and could do more harm than good. This inefficient system pervades every aspect of society. It is immoral, inefficient and unsustainable. Without morals no system is sustainable.
Destabilization and Disenfranchisement
To maintain any system, society must be destabilized. Any stable society will question the injustices perpetrated on that society. This is unleashed by the powerful nations on the unsuspecting citizenry by covert action through NGOs, terrorism, etc. The citizenry are blissfully ignorant of the hidden hand perpetrating this on the poor masses to exploit their resources. The direct their anger on fellow citizens whilst the real culprits get away.
1. Terrorism – Minority revolts are encouraged and blatant interference in the internal affairs of sovereign states are a daily occurrence. Having dominated the governments and encouraged an immoral economic system, it is not difficult to find injustices. It is interesting that the injustices perpetrated on the majority communities by this unjust system are ignored. If they do, obviously it is going to be the rallying point against the system.
2. Christianization – There is an active programme of Christianization and evangelism well subsidized by the west. This is well supported by the Catholic Church, which played a major role in the terrorism in Sri Lanka.
3. To a degree, extremism is funded by Saudi Arabia, a well known agent of the establishment.
4. NGOs subsidized from abroad high-jack moral authority to serve the interests of their masters.
5. Where autocracies not subservient to the world order, they are invaded; governments that serve the world order are appointed to exploit their countries’ resources. The repairs of the destruction caused by the invasion are purely on the heads of the invaded.
Debtocracy and Slavery
The world is run on Fiat Money, be it internal or external. Fiat money is essentially money without any value to back it. International trade is carried out by six currencies led by the Dollar. The dollar dominance is mainly due oil prices being denoted in dollars. The valueless Fiat Dollars perpetrated on the societies of the world brings to question the subservience of the world governments and their disingenuous nature. The ruling classes of these countries benefit by commissions and handouts from the system, but the poor and hard-working pay the price. Future generations are pawned by the ruling classes, Corporate land grabs encouraged, and the environment damaged for the personal benefit of the ruling classes and the international world order. This is daylight robbery.
The conduit for transfer of resources to the international fiat money and international world system is the local fiat money. Globalization has transferred manufacturing from the west to certain countries in Asia. With it, environmental damage and pollution has been transferred. The workers in these countries are paid slave wages, whilst the corporate in the west enjoys the profits. So the poor are sold to slavery but also have to bear the costs of pollution and environmental damage etc. Some are also displaced from lands they lived in for generations.
Present World Order and Democracy
The high-jacking of Democracy and embezzlement of wealth now pervades the whole world. It is no longer confined to the third world. Occupying Wall Street is a natural response against this immoral system. Good Governance, compassionate rulers who are accountable with the necessary checks and balances are the need of the hour. Development needs to be reassessed in terms of human well-being and not in terms of GDP.
In a very interesting interview with the former enlightened Finance Minister of Sri Lanka in the 1970s, Dr. N.M. Perera was asked:
Q: Sir, as an old student of the London School of Economics, what do you think is wrong with the World Economy?
A: The London School of Economics.
The present state of the world economy and the environment certainly questions the practice of economics by the western-dominated schools of economics. To us in Asia, westernization is certainly not modernity, but a despicable attempt to enslave our people.
January 16, 2009 | NYTimes.com
On Wednesday a new study reignited the debate over the “shock therapy” economic policies recommended to developing countries by Western economists and institutions during the 1990s.
Joseph Stiglitz, a Nobel-winning professor at Columbia and former chief economist at the World Bank, is perhaps the most famous critic of the those policies, which championed an immediate and rapid transition to capitalism.
In an interview with The Times, he responded to a study by Lancet, a medical journal, that claims that the rapid and widespread privatization of state industries in the former Soviet Union and Eastern bloc countries during the early 1990s led to increased deaths.
Here are excerpts from his response:
Lancet is right that Poland was an example of more gradual policies. A transition of an economy has many dimensions. You have macro policies, political policies. Not all went at the same pace. Poland was an example of gradual policy in many dimensions.
In retrospect I think “shock therapy” was a disastrous economic policy. It was ideology trumping good economic analysis. The comparison between the successes in China and the failures of Russia tell a clear story of how bad “shock therapy” was.
The defenders [of shock therapy] say things like, “We were worried that if we didn’t engage in rapid change, there could be reversals.” The critics of that view said: “If you proceed in this reckless way it will result in alienation, failure and reversals.”
It was a matter of judgment, of course. We hadn’t gone through these experiments. But there were other historical experiments on which we could base judgments. None were identical. More reversals occurred in the shock therapy countries, whereas the countries that proceeded in a more careful way have typically moved to reinforce a more democratic direction.
1990’s RussiaAs the Soviet Union collapsed, Boris Yeltsin gained control of Russia and took on a team of US funded, Harvard-led Chicago Boys, newly labeled 'transition experts.' Jeffrey Sachs, now of immense international fame, was on board as well. Immediately the people's cries for unions, communes and welfare spending were overridden by the lifting of price controls, massive privatization, and the installation of free trade. Though Yeltsin had to seize control with the military after losing the next election, the IMF and the US administration still praised his forward thinking, economic reform, and fight for democracy!
As average income, quality of life and unemployment worsened, in 1993 the international bodies called for MORE shock therapy, more budget cuts and privatization. Suddenly $2 billion dollars a month was being moved off shore as Russian oligarchs worked in collaboration with foreign investors - often spending foreign 'aid' that should have gone to the people - to reap the maximum benefit from the nation's garage sale. As protest mounted under the next administration, Putin started a war with Chechnya, which rapidly distracted the press and quashed any dissenting voices. A Harvard-sponsored advisory team was implicated in a profiteering scandal. All the while, Sach's reputation grew and Russia was praised for its progressive reforms.
As Russia's economy plummeted, Sach's was stunned by the lack of investment and foreign aid. He had advised Russia to privatize and open up with the belief that incoming aid would balance the sale of state assets. Klein attributes the lack of international support to wholly political causes: because the great communist threat of the cold war had fallen, there was no longer a need to intervene in struggling countries with the aim of ensuring their capitalist and democratic development. Russia, especially, was least entitled to aid and support from international bodies that had previously fought against the spread of the red.
Lesson Learned: Internal and international corruption can quite smoothly contribute to free market reforms, especially in a politically turbulent country struggling with new government. Klein goes so far as to say that, insofar as ideologues trust to the free market, individual's greed and corruption are expected corollaries or even a necessity of free market reform. If your focus were on wealth distribution or welfare, in fact, you would be interfering with 'proper' economic transition.
The tragedy of Russia's reforms- market bolshevism against democracy - Google Books Result
Peter Reddaway, Dmitri Glinski - 2001 - Business & Economics - 745 pages
Russian government that they now see the need for a rapid turn toward ... post- 1989 program of shock therapy, masterminded by none other than Jeffrey Sachs, ... now surmised that Russia's disastrous experiment with shock therapy might be ...
March 14th, 2012There is considerable misunderstanding of my role as an economic adviser in Russia in the early 1990s. Therefore, I offer this summary of my personal involvement with Russia’s economic reforms for anyone who might be interested. I begin with some background on my work in Latin America and Central Europe to help explain my approach to economic advising and the nature of the recommendations that I made with regard to Russia’s economic reforms.
My work in Latin America, Eastern Europe, and Russia was in the thick of very intense crises. In Bolivia the inflation in the 12 months before I arrived had hit 24,000 percent. In Poland, the economic and political regime of nearly half a century was (mercifully) collapsing. In Russia, the world’s second superpower was imploding. These crises were among the most intense in modern history. Armchair critics have little conception of the nature of such tumult, and of the challenges of devising policies in such confusion.
I am very proud for what I was able to do, and of my integrity and perseverance in the face of arduous obstacles. Bolivia and Poland achieved historic gains, and I certainly helped in that. Russia, alas, did much more poorly than I had hoped. This note tries to account for that shortfall in the outcomes of Russia’s early reforms.
Making Reforms in the Midst of Chaos
In Bolivia, Poland, and Russia, my work was like an emergency room doctor. The patient was already in shock: hyperinflation, mass shortages, political instability, a collapsing currency, and pervasive fear. Don’t blame the doctor for the condition of the patient coming into the emergency room.
A successful economic advisor must chart out a feasible course of action that solves the acute economic problems. In all three cases, I viewed my work as a short term, with a time horizon of a few years at most. I was not, and would not become, the long-term advisor to these economies. Long-term choices were for the society, through politics, not through an outside economic advisor. I was there to solve immediate problems.
Let me therefore be very clear, because this is a point of massive confusion about my role.
- In Bolivia I advised on how to end the hyperinflation, not on how to achieve long-term economic development. My work in Bolivia was intensive for roughly 18 months, July 1985 to end 1986.
- In Poland I advised on how to convert to a market economy, not on whether to be free-market like the US or social democratic like Scandinavia; those are choices for society. My work in Poland was intensive from April 1989 to end-1991.
- In Russia I advised on how Russia could emulate the successful transformations underway in Eastern Europe. My work in Russia lasted from December 1991 to December 1993 (and I publicly announced my resignation January 1994).
I stress these points because there is a long-standing narrative that says that I was out to help impose the “Washington Consensus,” a Milton-Friedman-style free-market economy. This is patently false. Yet it is repeated. It should stop being repeated.
There is another narrative that says that I was ruthlessly in favor of a market economy and uninterested in the rule of law, institutions, or social justice. This is even more patently wrongheaded. I have always regarded economic reform, institution building, and social justice to go hand in hand. I have always fought corruption, and resigned from Russia in 1993 because I found corruption to be growing and out of control. I have always paid attention to the plight of the poor, and looked for progressive measures to support macroeconomic objectives (e.g. the end of hyperinflation) in ways that give sustenance and support for the poor. For 27 years, since the start of my work in Bolivia, I have been a consistent champion of debt relief for over-indebted low-and-middle-income countries, precisely to help these countries find the economic and fiscal space to support the poor and the investments needed to end poverty.
Softpanorama hot topic of the month
Amazon.com The Shock Doctrine The Rise of Disaster Capitalism (9780805079838) Naomi Klein Books
Amazon.com Web of Debt The Shocking Truth About Our Money System -- The Sleight of Hand That Has Trapped Us in Debt and How We Can Break Free (9780979560804) Ellen Hodgson Brown BooksFollow the Yellow Brick Road... to comprehend a financial system on the brink of collapse September 16, 2007
I have been researching this topic myself for four or five years now and am familiar
with almost every other book in this genre, and I can unequivocally say that this
is now the definitive work on the world's financial and banking system, the history
of money and power in Western civilization, and the dire prognosis for our economy
and our personal freedoms, in general, as a result. It is vastly superior to "The
Creature from Jekyll Island", to compare it to one other fine book on the subject
that is now outdated, both in terms of its complete historical coverage, as well
as a completely up to date perspective on recent financial history and a deeply
insightful analysis of our current debt crisis, why it was let out of control, and
who would benefit from its ultimate unwinding. Quite frankly, looking back four
to five years from now, this could be the most profound non-fiction work of our
times. Robert Hemphill, Credit Manager for the Federal Reserve Bank in Atlanta,
when speaking on the same topic as this book, stated, "It is the most important
subject intelligent persons can investigate and reflect upon." I couldn't agree
more, and even encourage many unintelligent persons to give it a go. The mechanics
of money and finance have a profound affect on every person's life and well being,
and is inextricably linked to the fabric of our society and our freedom. Yet it
is almost completely ignored and poorly understood by the common man. As Henry Ford
said, "It is well that the people of this nation do not understand our banking and
monetary system, for if they did, I believe there would be revolution before tomorrow
morning." It's time we all started to understand what's been going on and how it
will affect our immediate future.
Ellen Hodgson Brown does a remarkable job at making this subject both easily understandable and richly entertaining while not pulling any of the sordid details or facts. It's impressive in its clarity, fascinating to read, and educational for anyone who might already think they fully understand the system. Unknown to most, The Wizard of Oz was written as a parable for our monetary system. Ms. Brown takes us down that yellow brick road and shows us that the reason L. Frank Baum's timeless story resonates with us so deeply is that our own world works much the same way as the Land of Oz, with a parallel cast of characters. It lies within our power, and in this book, to find our own ruby/silver slippers, thus avoiding the crisis to find our way back home to the real utopia.
Jeffrey Sachs - Wikipedia, the free encyclopedia
What I did in Russia — Jeffrey Sachs
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