Feeds:
Posts
Comments

Archive for May, 2010

Neo-Liberalism and the role of Government.

Neo-Liberalism and the role of Government.

When a government abdicates its responsibility in regulating the economy (as did the U.S. government), capitalist greed accompanied by all sorts of illegal amassing of wealth by the few, at the expense of the majority in society takes place. In other words, policies of neo-liberalism compel governments to abandon regulation of the economy, so that only profit- making becomes the law of the land. Society be damned. The citizen is only a consumer. The government is only a facilitator of business exploitation.

A government as a body that has the power to enforce environmental, labor and consumer laws was required by neo-liberal philosophy to abandon its most critical responsibility of social policy to “market forces”. While it is true that Democracy gives ordinary people a significant voice in government, at the end of the day, who makes the policies that the U.S. government pursues, is what matters. When that question is properly answered, then, we will find out who has power in America.

If a government relinquishes its central and essential duty of protecting the poor. If it fails to tackle unemployment, poverty, and income disparity in society, then, who is it working for? When the government makes it its religious duty to propagate privatization and market deregulation, then we see the sleeper hold neo-liberalism has on government. “Under Neo-liberalism everything either is for sale or is plundered for profit”. Giroux.

Explaining the danger of neo-liberalism on society, Henry A. Giroux writes,

“Neo-liberalism has become one of the most pervasive, if not, dangerous ideologies of the 21st century. Its pervasiveness is evident not only by its unparalleled influence on the global economy, but also by its power to redefine the very nature of politics itself. Free market fundamentalism rather than democratic idealism is now the driving force of economics and politics in most of the world”.

Unlike president Reagan who believed that the “government was a problem, not a solution”, President Obama says, “ that the real issue was not whether government ought to be big or small but whether what it did actually worked”. President Obama in his speech on overhauling financial regulation, seems to have understood the failure of neo-liberalism and the economic destruction it has brought on the U.S. in specific, and the world in general. Moreover, he has made the government’s ceding its responsibility as one of the main culprits for the United States’ financial meltdown. Obama said:

“Now, one of the most significant contributors to this recession was a financial crisis as dire as any we’ve known in generations — at least since the ’30s. And that crisis was born of a failure of responsibility — from Wall Street all the way to Washington — that brought down many of the world’s largest financial firms and nearly dragged our economy into a second Great depression. A free market was never meant to be a free license to take whatever you can get, however you can get it. That’s what happened too often in the years leading up to this crisis”. (Neo-Liberalism, Anarcho-Capitalism).

For the first time in the last thirty years, the bankruptcy of neo-liberalism is so obvious that neither sorcery nor religion could save it. According to Naomi Klein, Neo-Liberalism “has been a class war waged by the rich against the poor, and I think that they won. And I think the poor are fighting back. This should be an indictment of an ideology. Ideas have consequences. Wall Street crisis should be for neo-liberalism what fall of Berlin Wall was for Communism”.

Professor Mekonen Haddis.

Read Full Post »

Neo-Liberalism, and the Greek tragedy.

Neo-liberalism, and the Greek tragedy.

The country that gave the world the three most important tragedians, Aeschylus, Sophocles and Euripides is facing a major economic tragedy. While economists the world over have differing views on the root cause of Greece’s economic problem, as a non economist, I have been immensely concerned with anarcho-capitalism, (an economic system that destroys government regulation of the economy, and creates economic anarchy within the global economic system).

The conscious deregulation of the economy that started during the Reagan administration in the U.S. reached its climax during President George W. Bush’s tenure and has brought the global economic chaos the world is in at the moment. Their bankrupt economic theory of the market policing itself, has proven to be as hollow as their dreams of making trillions of dollars without manufacturing anything. (Capitalism without ethics, June, 2009 PSS.WP).

Sadly, Greek is another glaring example of the failure of neo-liberalism. Developing countries beware neo-liberalism is here to destroy you, not to save you. And those politicians that still praise the virtues of neo-liberalism, as Ashley St.Claire would say, they are either dim-witted or have a personal agenda that would personally benefit them at the expense of the interest of their countries.

Neo-liberalism is what Susan Strange calls “Casino Capitalism”. She is one of the first to have for seen the dangers of anarcho-capitalism.  She has linked “casino-capitalism”, in to a number of trends among which are: government’s deregulation of the economy, (based on the fallacy that, the market and the banks would regulate themselves), and commercial banks turning in to investment banks. Susan Strange’s work is an essential contribution in de bunking the dominant doctrine of neo-liberalism.

Recently, the EU and the IMF have agreed to extend $147 billion dollars rescue under a three year agreement. This “rescue” plan actually is intended to rescue French and German banks that are holding a large share of Greece’s bonds. Moreover, the “rescue” is meant to temporarily stop a widening debt crisis in Europe which might include Portugal, Spain and Italy. In all this, the Greeks will be burdened with more debt, and are required to take harsh budget cuts.

In order to comply with the EU and IMF’s “rescue” plan, the Greek government will cut public-sector workers’ pay by 20%, raise the retirement age, increase sales tax to 23%, increase the price of tobacco products, alcohol and gas by 10%, increase taxes on property and businesses, etc. etc. Even if all this drastic measures are instituted according to plan, the actions taken actually would increase Greece’s debt and shrink its economy by 4%. How about a big applause to neo-liberalism?

Focusing only on dollars and cents, what usually is left out is any discussion of the impact of neo-liberalism’s creation of political instabilities around the globe. The main crime of neo-liberalism is its unparalleled focus on greed some would say debauchery and social injustice.

I only hope, the violence in Greece would quickly recede before it destroys a country that is the root of European civilization.

Professor Mekonen Haddis.

Read Full Post »

Out Of Focus

Few years ago, I was teaching this class, which was full of intensely focused young people. They were ambitious, quick witted and hard working. There were few, that wanted to radically change the language of our discourse. They would say, referring to a female as a “hero” is disgraceful. We should refer to a female hero as a “shero”. When we discuss history, we are talking about “his-story” the white man’s version of events. There are no white men, only people who are “melanin challenged”.

I wrote the following poem, ‘Out Of Focus’ , based on my retrospection of my “militant” students.

Out Of focus

Hero- Shero,

Afri-Afro, Black, may be, Negro,

White, Euro,

Chairman, Chair woman,

Why not Chair person?

In a Pentagon staged, modern warfare,

Civilians young and old,

Don’t get killed,

Only, collaterally damaged.

Who needs affirmative action?

In a fair and just nation,

Where a level playing field,

Has been achieved,

Where no one is disadvantaged.

Hide the facts,

Cover the truth with innuendos,

Words that are meaningless.

Bland, unfeeling, uncaring,

Speaking,

Yet, saying nothing.

The more society evades the truth,

As long as it stays out focus,

Cultural decay continues.

Professor Mekonen Haddis

Read Full Post »

The rhetoric and reality of Neo-Liberalism.

The rhetoric and reality of neo-liberalism.

U.S. National debt

$ 12,861,498,793,143.58

The outstanding public debt as of 01 May 2010

The national debt has continued to increase an average of $ 4.07 billion per day since September 28, 2007. (a wonderful result of neo-liberalism)

“Neo-Liberalism is a system of economic thought [ideology] embracing the efficient markets hypothesis, the inherent good of deregulation and the natural impediment of government regulation, the necessity of free trade and globalization, the supremacy of the corporation over the individual person in the social economy.” Lambert.

On this may 1st 2010, news story;

“Athens, the Greek capital, witnessed riots, with police using tear gas to disperse demonstrators who threw firebombs and stones in a large May Day rally against austerity measures needed to secure loans for near-bankrupt Greece.”

We have seen what the “inherent good of deregulation” has done to the U.S. economy, haven’t we? More shining examples of deregulation (anarcho-capitalism) are coming forward. Greece, Portugal, Spain and more to follow. The United States and other Western countries are still rushing to impose this proven failure of a system on third world countries.

Those governments who might be unwilling to open their countries to become a neo liberal heaven of unregulated economy stand to face a coordinated attack as countries that do not honor individual rights and freedom of speech. Actually, according to Arthur Macewan, “By reducing explicit social regulation of private economic activity and ‘leaving things to the market’, neo-liberalism prevents the implementation of programs that would allow people to exercise political control over their economic affairs, involve people in solving their own economic problems, and serve the material needs of the great majority”.

What neo-liberalism has created in the U.S. is a super rich class in the financial sector who made billions of dollars in “profits” by gambling in derivatives, by putting a wager on the failure of the U.S. housing market, by trading in stocks, bonds, and currencies. In the process it killed the creation of “wealth”. In the United States, manufacturing had accounted for about twenty percent of GDP in 1980, and in 2010, manufacturing stands at less than ten percent of the Gross Domestic Product of the U.S. economy.

Ways of imposing neo liberal policies on developing countries:

* Neo liberalism could be imposed on a third world country through brutal means. As in the cases of Chile and Argentina in the 1970s, (military coups by the support of the U.S. and the complicity of local agents).

* Neo liberalism could inject its exploitative venom via

colour revolutions, with the active participation of NGOs, the

VOA, and local agents.

* Neo liberalism could also be imposed by using the financial      prowess of the IMF and the World Bank.

* Neo liberalism could be installed through invasion, like in Iraq. With the exception of oil, neo liberal policy leads to full ownership rights to foreign firms of Iraqi businesses, the opening of Iraqi banks to foreign control, and to full privatization of publicly owned companies.

“America’s financial system failed in its two crucial responsibilities: managing risk and allocating capital. The industry as a whole has not been doing what it should be doing … and it must now face change in its regulatory structures. Regrettably, many of the worst elements of the US financial system … were exported to the rest of the world.” Joseph Stiglitz.

So, one wonders, why does the U.S. want to forcefully shove this system of profit over humanity on the rest of the world?

Could David Harvey have a point? “Beyond the speculative and often fraudulent froth that characterizes much of neo-liberal financial manipulation, there lies a deeper process that entails the springing of ‘the debt trap’ as a primary means of accumulation by dispossession. Crisis creation, management and manipulation on the world stage has evolved into the fine art of deliberative redistribution of wealth from poor countries to the rich.”

Professor Mekonen Haddis.

Read Full Post »