On June 29, Triple Crisis blogger Kevin Gallagher interviewed Andong Zhu of Tsinghua University in Beijing China about China’s worker strikes and growing inequality.
Capital controls: “The new normal” (Part II)
In a recent post, I argued that capital controls have become the new normal. This is welcome news to progressives who have long argued that developing countries should have the right to deploy capital controls. A reasonable question for progressives to ask at this point is why are capital controls breaking out all over?
There are several possible (and no doubt, mutually reinforcing) reasons for the resurgence of controls.
First, on a practical level, they are needed in many countries. Policymakers in the developing economies that are performing well now are using these policies to contain the asset bubbles (and attendant inflationary pressures and currency appreciation) stimulated by the foreign investment that is flooding developing economy markets (itself the consequence of the low interest rates and dim economic prospects of the USA and Europe).
What Can Proponents of a Green New Deal Learn from the German Presidential Election?
As of Friday, July 2, Mr. Wulff became Germany’s new Federal President, the state’s highest office. The election electrified the German public even though the German President has little power and is chosen by the members of the German Parliament and representatives of each of the sixteen states rather than by public vote.
It has been a long time since the German public was as captivated as they were by Mr. Wulff’s opponent, Mr. Gauck. Despite the great enthusiasm for his candidacy, he was, at last, defeated by the conservative majority of electoral delegates. But one can learn a lot from Gauck’s one-month campaign: He was able to inspire people to become politically active. Broad-based activism is needed to transform society and achieve a socially and ecologically sustainable economy.
Capital controls: “The new normal” (Part I)
Like many progressive economists, I’m addicted to economics and business news. These days one phrase is repeated constantly—“The new normal.” Indeed, National Public Radio’s show, “Planet Money” recently featured a story on this omnipresent phrase. The new normal is shorthand for features of a dismal new economic reality to which the (investing) public must adjust. The new realities of our era include lower rates of return on stocks, bonds and real estate; larger government budget deficits which precipitate higher inflation rates; sluggish (and even negative) rates of growth in rich countries; and a shift in economic (and political) power to the world’s dynamic developing countries.
But another new normal has flown in under the pundit’s radar screen. This new normal is the proliferation of capital controls, which are being implemented rather widely across the developing world.
Korea-US trade deal would outlaw capital controls
Following up on Kevin Gallagher’s Triple Crisis post on the proposed US-China investment treaty, Gallagher has outlined in a recent column in The Guardian how the pending Korea-US Free Trade Agreement would prevent the Korean government from doing precisely what it is now doing to manage the financial crisis: control the flow of foreign currencies.
“South Korea will join the growing group of nations that have recently resorted to currency controls in the wake of the global financial crisis. As a rash of new research has shown, such controls are legitimate tools to prevent and mitigate financial crises.
“Yet if the pending South Korea-US free trade agreement that the US just agreed to expedite at the G20 meetings had been ratified by now, South Korea’s actions would be deemed illegal.
“As the Obama administration works to put Bush-era trade policy behind and forge a ’21st century trade policy’ it should fix this flaw that could be fatal to South Korea’s financial stability….”
Read the full Guardian column.
Climate Change: Are People the Problem?
There is no doubt about it: people are changing the Earth’s climate. The evidence for what scientists call “anthropogenic climate change” is overwhelming, notwithstanding the obfuscation efforts of the climate change denial industry kept on life-support with infusions of corporate money.
But to say that our emissions of greenhouse gases are causing climate change is not to say that every extra person automatically multiplies the problem. Nor does it imply that population control is the ultimate solution – a view espoused by some on the Malthusian fringe of the environmental movement.
Offshore Oil Drilling and Hurricane Risks
It’s time to stop blaming BP – alone. At least four other oil companies hired the same firm to write their plans for handling spills in the Gulf of Mexico. They ended up with nearly identical plans, complete with thoughtful concern about impacts on walruses. The CEO of ExxonMobil called it “unfortunate” and “embarrassing” that the plan included walruses, which have not been present in the Gulf region for millions of years.
On the other hand, according to U.S. Rep. Ed Markey, the oil industry’s standard plan for Gulf spills never mentions hurricanes or tropical storms, which do appear in the region on an annual basis. This makes perfect sense under only one interpretation: the oil companies were certain that accidents never happen. If there are no oil spills, your spill response plan can talk about unicorns, and no one will be the wiser.
Gold Fever: Global investor search for “safe haven” makes indigenous Guatemalan communities unsafe
In the indigenous, western highlands of Guatemala, a rebellion is swelling against the forces of global capitalism. Well, at least against its palpable manifestation—an open pit gold and silver mine owned and operated by the Canadian company Goldcorp. The mine is seen as early warning of what could be a storm of foreign mining companies: the Guatemalan government has granted some 300 mining concessions, over 90% of them near indigenous communities. On June 18, some 12,000 indigenous people streamed into Huehuetenango to give a message to a visiting UN Special Rapporteur on Indigenous Rights: “No to mining, yes to life”.
Goldcorp inherited the Marlin mine when it acquired Glamis Gold back in 2006. Since then, Goldcorp has emerged as the industry’s “growth leader” . Its 2009 Annual Report boasts a five-year average return to shareholders of 21.2%–nearly double that of its “senior” competitors.