Showing posts with label David Harvey. Show all posts
Showing posts with label David Harvey. Show all posts
Wednesday, March 02, 2011
Sunday, February 27, 2011
Abu Atris: A Revolution Against Neoliberalism?
[Thivai: Excellent short essay -- discusses neoliberalism here and abroad, through the lenses of David Harvey, Timothy Mitchell and Naomi Klein. Would be a great intro for people that are not familiar with neoliberalism or political economy or broader global interconnections or problems with free market/privatization in a real world setting.]
A revolution against neoliberalism? If rebellion results in a retrenchment of neoliberalism, millions will feel cheated.
by Abu Atris
Al Jazeera
...
Rhetoric vs. reality
Two observations about Egypt’s history as a neoliberal state are in order. First, Mubarak’s Egypt was considered to be at the forefront of instituting neoliberal policies in the Middle East (not un-coincidentally, so was Ben Ali’s Tunisia). Secondly, the reality of Egypt’s political economy during the Mubarak era was very different than the rhetoric, as was the case in every other neoliberal state from Chile to Indonesia. Political scientist Timothy Mitchell published a revealing essay about Egypt’s brand of neoliberalism in his book Rule of Experts (the chapter titled "Dreamland" — named after a housing development built by Ahmad Bahgat, one of the Mubarak cronies now discredited by the fall of the regime). The gist of Mitchell’s portrait of Egyptian neoliberalism was that while Egypt was lauded by institutions such as the International Monetary Fund as a beacon of free-market success, the standard tools for measuring economies gave a grossly inadequate picture of the Egyptian economy. In reality the unfettering of markets and agenda of privatization were applied unevenly at best.
The only people for whom Egyptian neoliberalism worked "by the book" were the most vulnerable members of society, and their experience with neoliberalism was not a pretty picture. Organised labor was fiercely suppressed. The public education and the health care systems were gutted by a combination of neglect and privatization. Much of the population suffered stagnant or falling wages relative to inflation. Official unemployment was estimated at approximately 9.4% last year (and much higher for the youth who spearheaded the January 25th Revolution), and about 20% of the population is said to live below a poverty line defined as $2 per day per person.
For the wealthy, the rules were very different. Egypt did not so much shrink its public sector, as neoliberal doctrine would have it, as it reallocated public resources for the benefit of a small and already affluent elite. Privatization provided windfalls for politically well-connected individuals who could purchase state-owned assets for much less than their market value, or monopolise rents from such diverse sources as tourism and foreign aid. Huge proportions of the profits made by companies that supplied basic construction materials like steel and cement came from government contracts, a proportion of which in turn were related to aid from foreign governments.
Most importantly, the very limited function for the state recommended by neoliberal doctrine in the abstract was turned on its head in reality. In Mubarak’s Egypt business and government were so tightly intertwined that it was often difficult for an outside observer to tease them apart. Since political connections were the surest route to astronomical profits, businessmen had powerful incentives to buy political office in the phony elections run by the ruling National Democratic Party. Whatever competition there was for seats in the Peoples’ Assembly and Consultative Council took place mainly within the NDP. Non-NDP representation in parliament by opposition parties was strictly a matter of the political calculations made for a given elections: let in a few independent candidates known to be affiliated with the Muslim Brotherhood in 2005 (and set off tremors of fear in Washington); dictate total NDP domination in 2010 (and clear the path for an expected new round of distributing public assets to "private" investors).
Parallels with America
The political economy of the Mubarak regime was shaped by many currents in Egypt’s own history, but its broad outlines were by no means unique. Similar stories can be told throughout the rest of the Middle East, Latin America, Asia, Europe and Africa. Everywhere neoliberalism has been tried, the results are similar: living up to the utopian ideal is impossible; formal measures of economic activity mask huge disparities in the fortunes of the rich and poor; elites become "masters of the universe," using force to defend their prerogatives, and manipulating the economy to their advantage, but never living in anything resembling the heavily marketised worlds that are imposed on the poor.
Unemployment was a major grievance for millions of Egyptian protesters [EPA]
The story should sound familiar to Americans as well. For example, the vast fortunes of Bush era cabinet members Donald Rumsfeld and Dick Cheney, through their involvement with companies like Halliburton and Gilead Sciences, are the product of a political system that allows them — more or less legally — to have one foot planted in "business" and another in "government" to the point that the distinction between them becomes blurred. Politicians move from the office to the boardroom to the lobbying organization and back again.
As neoliberal dogma disallows any legitimate role for government other than guarding the sanctity of free markets, recent American history has been marked by the steady privatization of services and resources formerly supplied or controlled by the government. But it is inevitably those with closest access to the government who are best positioned to profit from government campaigns to sell off the functions it formerly performed. It is not just Republicans who are implicated in this systemic corruption. Clinton-era Secretary of Treasury Robert Rubin’s involvement with Citigroup does not bear close scrutiny. Lawrence Summers gave crucial support for the deregulation of financial derivatives contracts while Secretary of Treasury under Clinton, and profited handsomely from companies involved in the same practices while working for Obama (and of course deregulated derivatives were a key element in the financial crisis that led to a massive Federal bailout of the entire banking industry).
So in Egyptian terms, when General Secretary of the NDP Ahmad Ezz cornered the market on steel and was given contracts to build public-private construction projects, or when former Minister of Parliament Talaat Mustafa purchased vast tracts of land for the upscale Madinaty housing development without having to engage in a competitive bidding process (but with the benefit of state-provided road and utility infrastructure), they may have been practicing corruption logically and morally. But what they were doing was also as American as apple pie, at least within the scope of the past two decades.
However, in the current climate the most important thing is not the depredations of deposed Mubarak regime cronies. It is rather the role of the military in the political system. It is the army that now rules the country, albeit as a transitional power, or so most Egyptians hope. No representatives of the upper echelons of the Egyptian military appear on the various lists of old-regime allies who need to be called to account. For example, the headline of the February 17th edition of Ahrar, the press organ of the Liberal party, was emblazoned with the headline "Financial Reserves of the Corrupt Total 700 Billion Pounds [about $118 billion] in 18 Countries."
A vast economic powerhouse
But the article did not say a single word about the place of the military in this epic theft. The military were nonetheless part of the crony capitalism of the Mubarak era. After relatively short careers in the military high-ranking officers are rewarded with such perks as highly remunerative positions on the management boards of housing projects and shopping malls. Some of these are essentially public-sector companies transferred to the military sector when IMF-mandated structural adjustment programs required reductions in the civilian public sector.
To Read the Rest of the Essay
A revolution against neoliberalism? If rebellion results in a retrenchment of neoliberalism, millions will feel cheated.
by Abu Atris
Al Jazeera
...
Rhetoric vs. reality
Two observations about Egypt’s history as a neoliberal state are in order. First, Mubarak’s Egypt was considered to be at the forefront of instituting neoliberal policies in the Middle East (not un-coincidentally, so was Ben Ali’s Tunisia). Secondly, the reality of Egypt’s political economy during the Mubarak era was very different than the rhetoric, as was the case in every other neoliberal state from Chile to Indonesia. Political scientist Timothy Mitchell published a revealing essay about Egypt’s brand of neoliberalism in his book Rule of Experts (the chapter titled "Dreamland" — named after a housing development built by Ahmad Bahgat, one of the Mubarak cronies now discredited by the fall of the regime). The gist of Mitchell’s portrait of Egyptian neoliberalism was that while Egypt was lauded by institutions such as the International Monetary Fund as a beacon of free-market success, the standard tools for measuring economies gave a grossly inadequate picture of the Egyptian economy. In reality the unfettering of markets and agenda of privatization were applied unevenly at best.
The only people for whom Egyptian neoliberalism worked "by the book" were the most vulnerable members of society, and their experience with neoliberalism was not a pretty picture. Organised labor was fiercely suppressed. The public education and the health care systems were gutted by a combination of neglect and privatization. Much of the population suffered stagnant or falling wages relative to inflation. Official unemployment was estimated at approximately 9.4% last year (and much higher for the youth who spearheaded the January 25th Revolution), and about 20% of the population is said to live below a poverty line defined as $2 per day per person.
For the wealthy, the rules were very different. Egypt did not so much shrink its public sector, as neoliberal doctrine would have it, as it reallocated public resources for the benefit of a small and already affluent elite. Privatization provided windfalls for politically well-connected individuals who could purchase state-owned assets for much less than their market value, or monopolise rents from such diverse sources as tourism and foreign aid. Huge proportions of the profits made by companies that supplied basic construction materials like steel and cement came from government contracts, a proportion of which in turn were related to aid from foreign governments.
Most importantly, the very limited function for the state recommended by neoliberal doctrine in the abstract was turned on its head in reality. In Mubarak’s Egypt business and government were so tightly intertwined that it was often difficult for an outside observer to tease them apart. Since political connections were the surest route to astronomical profits, businessmen had powerful incentives to buy political office in the phony elections run by the ruling National Democratic Party. Whatever competition there was for seats in the Peoples’ Assembly and Consultative Council took place mainly within the NDP. Non-NDP representation in parliament by opposition parties was strictly a matter of the political calculations made for a given elections: let in a few independent candidates known to be affiliated with the Muslim Brotherhood in 2005 (and set off tremors of fear in Washington); dictate total NDP domination in 2010 (and clear the path for an expected new round of distributing public assets to "private" investors).
Parallels with America
The political economy of the Mubarak regime was shaped by many currents in Egypt’s own history, but its broad outlines were by no means unique. Similar stories can be told throughout the rest of the Middle East, Latin America, Asia, Europe and Africa. Everywhere neoliberalism has been tried, the results are similar: living up to the utopian ideal is impossible; formal measures of economic activity mask huge disparities in the fortunes of the rich and poor; elites become "masters of the universe," using force to defend their prerogatives, and manipulating the economy to their advantage, but never living in anything resembling the heavily marketised worlds that are imposed on the poor.
Unemployment was a major grievance for millions of Egyptian protesters [EPA]
The story should sound familiar to Americans as well. For example, the vast fortunes of Bush era cabinet members Donald Rumsfeld and Dick Cheney, through their involvement with companies like Halliburton and Gilead Sciences, are the product of a political system that allows them — more or less legally — to have one foot planted in "business" and another in "government" to the point that the distinction between them becomes blurred. Politicians move from the office to the boardroom to the lobbying organization and back again.
As neoliberal dogma disallows any legitimate role for government other than guarding the sanctity of free markets, recent American history has been marked by the steady privatization of services and resources formerly supplied or controlled by the government. But it is inevitably those with closest access to the government who are best positioned to profit from government campaigns to sell off the functions it formerly performed. It is not just Republicans who are implicated in this systemic corruption. Clinton-era Secretary of Treasury Robert Rubin’s involvement with Citigroup does not bear close scrutiny. Lawrence Summers gave crucial support for the deregulation of financial derivatives contracts while Secretary of Treasury under Clinton, and profited handsomely from companies involved in the same practices while working for Obama (and of course deregulated derivatives were a key element in the financial crisis that led to a massive Federal bailout of the entire banking industry).
So in Egyptian terms, when General Secretary of the NDP Ahmad Ezz cornered the market on steel and was given contracts to build public-private construction projects, or when former Minister of Parliament Talaat Mustafa purchased vast tracts of land for the upscale Madinaty housing development without having to engage in a competitive bidding process (but with the benefit of state-provided road and utility infrastructure), they may have been practicing corruption logically and morally. But what they were doing was also as American as apple pie, at least within the scope of the past two decades.
However, in the current climate the most important thing is not the depredations of deposed Mubarak regime cronies. It is rather the role of the military in the political system. It is the army that now rules the country, albeit as a transitional power, or so most Egyptians hope. No representatives of the upper echelons of the Egyptian military appear on the various lists of old-regime allies who need to be called to account. For example, the headline of the February 17th edition of Ahrar, the press organ of the Liberal party, was emblazoned with the headline "Financial Reserves of the Corrupt Total 700 Billion Pounds [about $118 billion] in 18 Countries."
A vast economic powerhouse
But the article did not say a single word about the place of the military in this epic theft. The military were nonetheless part of the crony capitalism of the Mubarak era. After relatively short careers in the military high-ranking officers are rewarded with such perks as highly remunerative positions on the management boards of housing projects and shopping malls. Some of these are essentially public-sector companies transferred to the military sector when IMF-mandated structural adjustment programs required reductions in the civilian public sector.
To Read the Rest of the Essay
Tuesday, July 06, 2010
Thursday, April 08, 2010
Crisis and Resistance in the Neoliberal City : A Conversation with David Harvey, Max Rameau, Shiri Pasternak, and Esther Wang
Crisis and Resistance in the Neoliberal City : A Conversation with David Harvey, Max Rameau, Shiri Pasternak, and Esther Wang
Indy Reader
David Harvey: This foreclosure crisis, this financial crisis, has to be thought of as a crisis of the city, a crisis of urbanization – and if it’s a crisis of the city and of urbanization, then the solution has to be a reconfiguration of the city and a redirection of what urbanization is about. The pattern of this crisis is not anything new; and one of the things that happens in the U.S., and on the left in general, is that we seem sometimes to suffer from amnesia as to what has happened in the past. I would like to recall that the last biggest crisis period of capitalism, from around 1973 to 1982, was a deep crisis of urbanization. It began with the collapse of global property markets in the spring of 1973, leading to the bankruptcy of several financial institutions, followed of course by the Arab-Israeli war and the oil price hike (which everybody remembers more than they remember the property market crash). This was followed by a crisis of municipal finance and the disciplining of almost all cities, not only in the U.S., but around the world, to a new regime of financial terror, what I’d also call “neoliberal politics.” Understanding what this regime was about is crucial because it was part of the solution to the crisis of the 1970s, a solution which underpins the nature of the crisis we are currently in. This is a terribly important point to make, because how we come out of this crisis is almost certainly going to define the nature of the next crisis down the road – unless we decide to say, “To hell with capitalist crises! To hell with capitalism!”
In the 1970s it was clear that corporate America was in difficulty, economically and politically. Economically, it decided to try to get out of it by confronting and disciplining labor, big time, and it had a number of means to do that. First, it opened up immigration, for instance the 1965 Immigration Reform Act in this country. It’s very interesting to remember that in the 1960s and the 1970s the Germans were importing people from Turkey, the French were actually subsidizing bringing in immigrants from the Maghreb, Britain was of course accepting people from the ex-empire, and the Swedes were bringing in people from Yugoslavia. Immigration became one of the capitalist class’ main tools to try to solve the “problem” of the power of labor, the scarcity of labor, and the high level of wages. Second, they tried to use technological change to throw people out of work as much as possible, through labor-saving innovations. The third was the invention of interesting politicians with names like Reagan and Thatcher, whose main mission was of course to screw labor and destroy labor organization – they did it democratically while Pinochet did it through military violence in Chile. And finally if this political assault on labor didn’t work you could always offshore production to Mexico or the Philippines or Bangladesh or ultimately even to China.
By all these means, capitalists successfully disciplined labor in the 1970s and early 1980s, such that by the time you get to 1985 the labor question is no longer a serious barrier to capitalist accumulation. What that meant however, was that labor had very little power in the market, and as a result of that, real wages did not increase anywhere in the world, even in the United States, from the 1970s to the present day. We’ve been through 30 years of wage repression, guaranteeing capitalist profits, with a public policy which was actually oriented in that same direction. I always remember that Margaret Thatcher’s economic advisor said in effect, sometime after he left the postion, that he really believed that the fight against inflation was really a cover to bash the workers and create an industrial reserve army so that capitalists could have easy profits ever thereafter.
What we’ve seen since then is of course a tremendous increase in inequality and a tremendous concentration of wealth in the upper classes. The story we’re told is that the upper classes should have that wealth, after all, they invest, and as they invest they create jobs and aren’t-we-all-grateful-to-them-for-doing-so. The idea that we could actually get jobs by other means is ruled out of the picture, of course. But in fact the capitalist class doesn’t particularly care about creating jobs, it cares about making money. And it soon found, in the 1980s in particular, that it could make money by investing in asset values rather than in production, so it started to invest in the stock market, in property markets, in oil futures and so on. New markets were developed in which you could actually make even more money than you could spending your money on assets through purchasing derivatives of assets – and very soon you could buy on derivatives of insurances of derivatives of assets and so on.
What resulted was a financial asset bubble, rather than at real expansion of production and real jobs. The rest of us were reduced very frequently to service functions, reconfiguring the class structure. We went through deindustrialization in this country, through a reconfiguration of the nature of job structures and also of the kinds of people who can occupy those job structures. This was crucial to fueling the bubble that grew in the 1990s in particular. During that period, if you asked where to put your money, you were told to put it in property markets. It’s important to remember that we’ve had many financial crises over these last thirty years, and many of those crises have been related to urbanization, and have been about property. We had the Savings and Loans crisis in 1987-89, when somewhere around 600 or 800 banks or financial institutions were declared bankrupt, and this was a crisis tied very much to commercial property. In 1992 the Swedish banking system went bankrupt over excessive property development. In 1989 the Japanese economy crashed around land market prices. What we’ve had is a whole series of asset bubbles and we seem to forget what these asset bubbles are about. These asset bubbles are like Ponzi schemes: people put money in the stock market, the stock market rises, and people put more money in the stock market, and it just keeps going like that, the same with property markets, the same with oil futures. And this leads us to a point where, finally, the asset bubble breaks. It breaks big time this time, not like it did in 1987, which was sort of contained, but in a much bigger way, that becomes global immediately, as the 1973-75 crisis was global. That then poses the problem: what exactly are we going to do about this?
Now the answer to this lies in the way we came out of the crisis in the 1970s, when the New York investment banks acquired vast quantities of money from recycling petro dollars. Their big problem was where to invest it–the economy wasn’t doing well, so where do you put your money to make a sufficient rate of return? One of the things they decided on was lending to developing countries–because the good thing about lending to countries is that countries can’t disappear, you know where they are and you know you can go get your money. So in the 1970s they lent to places like Mexico. Then they raised the interest rates and Mexico couldn’t pay, and was going to go bankrupt–which meant that the New York investment banks could go bankrupt. So at that point, the government stepped in, the treasury and the IMF got together, and they bailed out Mexico so that Mexico could bailout the New York banks. But they bailed out Mexico in such a way that the Mexican population suffered a drop in living standards of about 20% in the next two to five years. This is what’s called saving the banks and socking it to the people.
Now I defy you to look at what’s been going on in this country in terms of its public policy and say its anything other than saving the banks and socking it to the people. We’re the ones who are paying, they are the ones who are benefitting. This is a class project, it was a class project back in the 1970s and it continues to be one now. If we come out of this crisis with this class project intact then we are in deep trouble. We have to turn it around in such a way that government policy gets turned into support of the people, not support of the banks. The banks should be nationalized, turned into public utilities which serve people, not capital. And this is something on which we really need to concentrate our ideas on, right now. In particular, the biggest danger of all is that the stimulus package which is being passed is going to be handed out to mayors, handed out to cities, handed out all over the place, in such a way that there is absolutely no control over exactly what’s going to be done with it. So what’s going to be done with it is that people are going to be use it to fund their favorite projects. Mayor Bloomberg’s favorite project is to give $45 million to retrain Wall Street executives, which seems to me an astonishing way in which to spend the money – but that’s the way Mayor Bloomberg thinks. But I think we have different ideas; in New York, together with the some of the social movements who are forming the Right To The City group, we would like to suggest a whole different set of ways the stimulus package could be spent in order to benefit people rather than capital. Along with that, we have the supreme irrationality that you have tent cities arising in California and elsewhere, increasing homelessness, at the same time that you have all these vacant properties around. Is that a rational situation? And it seems that this is a situation where political activism can take very direct action–for instance, Picture the Homeless in NYC tried to commandeer a building last week–and this is the kind of thing we need to be supporting publicly as much as we can.
To Read the Rest of the Panel Discussion
Indy Reader
David Harvey: This foreclosure crisis, this financial crisis, has to be thought of as a crisis of the city, a crisis of urbanization – and if it’s a crisis of the city and of urbanization, then the solution has to be a reconfiguration of the city and a redirection of what urbanization is about. The pattern of this crisis is not anything new; and one of the things that happens in the U.S., and on the left in general, is that we seem sometimes to suffer from amnesia as to what has happened in the past. I would like to recall that the last biggest crisis period of capitalism, from around 1973 to 1982, was a deep crisis of urbanization. It began with the collapse of global property markets in the spring of 1973, leading to the bankruptcy of several financial institutions, followed of course by the Arab-Israeli war and the oil price hike (which everybody remembers more than they remember the property market crash). This was followed by a crisis of municipal finance and the disciplining of almost all cities, not only in the U.S., but around the world, to a new regime of financial terror, what I’d also call “neoliberal politics.” Understanding what this regime was about is crucial because it was part of the solution to the crisis of the 1970s, a solution which underpins the nature of the crisis we are currently in. This is a terribly important point to make, because how we come out of this crisis is almost certainly going to define the nature of the next crisis down the road – unless we decide to say, “To hell with capitalist crises! To hell with capitalism!”
In the 1970s it was clear that corporate America was in difficulty, economically and politically. Economically, it decided to try to get out of it by confronting and disciplining labor, big time, and it had a number of means to do that. First, it opened up immigration, for instance the 1965 Immigration Reform Act in this country. It’s very interesting to remember that in the 1960s and the 1970s the Germans were importing people from Turkey, the French were actually subsidizing bringing in immigrants from the Maghreb, Britain was of course accepting people from the ex-empire, and the Swedes were bringing in people from Yugoslavia. Immigration became one of the capitalist class’ main tools to try to solve the “problem” of the power of labor, the scarcity of labor, and the high level of wages. Second, they tried to use technological change to throw people out of work as much as possible, through labor-saving innovations. The third was the invention of interesting politicians with names like Reagan and Thatcher, whose main mission was of course to screw labor and destroy labor organization – they did it democratically while Pinochet did it through military violence in Chile. And finally if this political assault on labor didn’t work you could always offshore production to Mexico or the Philippines or Bangladesh or ultimately even to China.
By all these means, capitalists successfully disciplined labor in the 1970s and early 1980s, such that by the time you get to 1985 the labor question is no longer a serious barrier to capitalist accumulation. What that meant however, was that labor had very little power in the market, and as a result of that, real wages did not increase anywhere in the world, even in the United States, from the 1970s to the present day. We’ve been through 30 years of wage repression, guaranteeing capitalist profits, with a public policy which was actually oriented in that same direction. I always remember that Margaret Thatcher’s economic advisor said in effect, sometime after he left the postion, that he really believed that the fight against inflation was really a cover to bash the workers and create an industrial reserve army so that capitalists could have easy profits ever thereafter.
What we’ve seen since then is of course a tremendous increase in inequality and a tremendous concentration of wealth in the upper classes. The story we’re told is that the upper classes should have that wealth, after all, they invest, and as they invest they create jobs and aren’t-we-all-grateful-to-them-for-doing-so. The idea that we could actually get jobs by other means is ruled out of the picture, of course. But in fact the capitalist class doesn’t particularly care about creating jobs, it cares about making money. And it soon found, in the 1980s in particular, that it could make money by investing in asset values rather than in production, so it started to invest in the stock market, in property markets, in oil futures and so on. New markets were developed in which you could actually make even more money than you could spending your money on assets through purchasing derivatives of assets – and very soon you could buy on derivatives of insurances of derivatives of assets and so on.
What resulted was a financial asset bubble, rather than at real expansion of production and real jobs. The rest of us were reduced very frequently to service functions, reconfiguring the class structure. We went through deindustrialization in this country, through a reconfiguration of the nature of job structures and also of the kinds of people who can occupy those job structures. This was crucial to fueling the bubble that grew in the 1990s in particular. During that period, if you asked where to put your money, you were told to put it in property markets. It’s important to remember that we’ve had many financial crises over these last thirty years, and many of those crises have been related to urbanization, and have been about property. We had the Savings and Loans crisis in 1987-89, when somewhere around 600 or 800 banks or financial institutions were declared bankrupt, and this was a crisis tied very much to commercial property. In 1992 the Swedish banking system went bankrupt over excessive property development. In 1989 the Japanese economy crashed around land market prices. What we’ve had is a whole series of asset bubbles and we seem to forget what these asset bubbles are about. These asset bubbles are like Ponzi schemes: people put money in the stock market, the stock market rises, and people put more money in the stock market, and it just keeps going like that, the same with property markets, the same with oil futures. And this leads us to a point where, finally, the asset bubble breaks. It breaks big time this time, not like it did in 1987, which was sort of contained, but in a much bigger way, that becomes global immediately, as the 1973-75 crisis was global. That then poses the problem: what exactly are we going to do about this?
Now the answer to this lies in the way we came out of the crisis in the 1970s, when the New York investment banks acquired vast quantities of money from recycling petro dollars. Their big problem was where to invest it–the economy wasn’t doing well, so where do you put your money to make a sufficient rate of return? One of the things they decided on was lending to developing countries–because the good thing about lending to countries is that countries can’t disappear, you know where they are and you know you can go get your money. So in the 1970s they lent to places like Mexico. Then they raised the interest rates and Mexico couldn’t pay, and was going to go bankrupt–which meant that the New York investment banks could go bankrupt. So at that point, the government stepped in, the treasury and the IMF got together, and they bailed out Mexico so that Mexico could bailout the New York banks. But they bailed out Mexico in such a way that the Mexican population suffered a drop in living standards of about 20% in the next two to five years. This is what’s called saving the banks and socking it to the people.
Now I defy you to look at what’s been going on in this country in terms of its public policy and say its anything other than saving the banks and socking it to the people. We’re the ones who are paying, they are the ones who are benefitting. This is a class project, it was a class project back in the 1970s and it continues to be one now. If we come out of this crisis with this class project intact then we are in deep trouble. We have to turn it around in such a way that government policy gets turned into support of the people, not support of the banks. The banks should be nationalized, turned into public utilities which serve people, not capital. And this is something on which we really need to concentrate our ideas on, right now. In particular, the biggest danger of all is that the stimulus package which is being passed is going to be handed out to mayors, handed out to cities, handed out all over the place, in such a way that there is absolutely no control over exactly what’s going to be done with it. So what’s going to be done with it is that people are going to be use it to fund their favorite projects. Mayor Bloomberg’s favorite project is to give $45 million to retrain Wall Street executives, which seems to me an astonishing way in which to spend the money – but that’s the way Mayor Bloomberg thinks. But I think we have different ideas; in New York, together with the some of the social movements who are forming the Right To The City group, we would like to suggest a whole different set of ways the stimulus package could be spent in order to benefit people rather than capital. Along with that, we have the supreme irrationality that you have tent cities arising in California and elsewhere, increasing homelessness, at the same time that you have all these vacant properties around. Is that a rational situation? And it seems that this is a situation where political activism can take very direct action–for instance, Picture the Homeless in NYC tried to commandeer a building last week–and this is the kind of thing we need to be supporting publicly as much as we can.
To Read the Rest of the Panel Discussion
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