Despite President Barack Obama’s charm offensive in the region, Pacific nations are well-advised to remain wary of the U.S. government’s position on the Trans-Pacific Partnership agreement (TPP).
If U.S. trade negotiators got their way, the Pacific Rim would reap surprisingly few gains — but take on big risk. Until the United States starts to see Asia as a true trading partner, rather than a region to patronize, it is right to hold out on the TPP.
Midway through the largest and most complex electoral process in the world, it is clear that this is a watershed general election for India—though perhaps not quite in the way that is generally perceived.
It would be a mistake to perceive this election along the lines of a U.S. Presidential election, despite the best efforts of the media and the opposition Bharatiya Janata Party (BJP) to convert it into that. It is a vote for a Parliament based on a first-past-the-post system in which several regional parties have key roles in their own states. The major “national” candidates—such as Narendra Modi of the BJP, Rahul Gandhi of the Congress Party, and Arvind Kejriwal of the Aam Aadmi Party (the new kid on the block, born out of the anti-corruption campaign) are not voted for nationally; rather, they are significant to the extent they can inspire voters to vote for their party across the country.
No party will get a clear majority, i.e., 272 seats out of 542. And many other factors intervene in each state and region. Several regional parties are likely to get around 20-30 seats each, which means that post-election alliances (however fragile) are inevitable if a government is to be formed. The main question right now is whether the BJP and its allies in the National Democratic Alliance (NDA) will get enough seats to make some other parties support them. Three women leaders will be important in the post-poll calculus: J. Jayalalitha (Chief Minister of Tamil Nadu), Mamata Banerjee (Chief Minister of West Bengal) and Mayawati (former Chief Minister of Uttar Pradesh).
Uniteed States President Barack Obama will be in Malaysia soon. Among the issues on his agenda will be the current status of the Trans Pacific Partnership Agreement (TPPA).
It is an opportunity to clarify with the President himself what the chances are that the TPPA will be approved by Congress, once a deal is reached.
Of concern is that the Congress will only pass the TPPA if it has a clause disciplining countries that are “currency manipulators.”
This concern is especially serious since a recent influential report cited Malaysia as one of the two TPPA countries that qualified as “currency manipulators.”
Uniteed States President Barack Obama will be in Malaysia soon. Among the issues on his agenda will be the current status of the Trans Pacific Partnership Agreement (TPPA).
It is an opportunity to clarify with the President himself what the chances are that the TPPA will be approved by Congress, once a deal is reached.
Of concern is that the Congress will only pass the TPPA if it has a clause disciplining countries that are “currency manipulators.”
This concern is especially serious since a recent influential report cited Malaysia as one of the two TPPA countries that qualified as “currency manipulators.”
This is the third part of a four-part interview with Costas Lapavitsas, author of Financialised Capitalism: Expansion and Crisis (Maia Ediciones, 2009) and Profiting Without Producing: How Finance Exploits Us All (Verso, 2014). This part considers financialization in relation, first, with industrial and commercial enterprise and, second, with the household. It then turns to the main consequences of financialization, in terms of economic stability, development, and inequality. (See the earlier parts of the interview here and here.)
Costas Lapavitsas, Guest Blogger
Part 3
Dollars & Sense: A striking aspect of your analysis of industrial and commercial enterprises is that, rather than simply becoming more reliant on bank finance, they have taken their own retained profits and begun to behave like financial companies. Rather than plow profits back into investment in their core businesses, they are instead placing bets on lots of different kinds of businesses. What accounts for that change in corporate behavior?
CL: In some ways, again, this is the deepest and most difficult issue with regard to financialization. Let me make one point clear: to capture financialization and to define it, we don’t really have to go into what determines the behavior of firms in this way. Financialization is middle-range theory. If I recognize the changed behavior of the corporation, that’s enough for understanding financialization. It’s good enough for middle-range theory. Now obviously you’re justifiedto ask this question: why are corporations changing their behavior in this way? And, there, I would go back at some point to technologies, labor, and so on—the forces and relations of production.
When President Obama’s fortunes were tanking in the winter of 2010, he needed a way to come out punching at the bankers again in order to gain some more momentum on financial reform—and with the voters. So he turned to an unlikely “populist” symbol—Paul Volcker, former head of the Federal Reserve System from the 1980s, who had been widely reviled, especially on the left, for his anti-inflationary crusade and high interest rate policy at that time. Volcker’s policy raised unemployment to dizzying heights, resulted in thousands of bankruptcies, and ushered in the Third World debt crisis that left much of South America in economic ruin for a decade or more. But as a sign of how crazy U.S. politics had become and how far economic discourse had shifted to the right in the ensuing 30 years, Paul Volcker had become a voice of relative sanity in the fight over financial reform in the wake of the Great Financial Crisis of 2007-2008. Obama called a press conference with Volcker at the front and Timothy Geithner, Obama’s Treasury Secretary who had been very unenthusiastic about significant financial reform, slightly behind and with a scowl on his face. The conference announced Obama’s support for “the Volcker Rule,” which was to be included in the Dodd-Frank Financial Reform bill that was under development and the subject of furious debate in Washington—and that ultimately became law in the summer of 2010.
Shadow banking in China has become an important, closely watched topic. This sector outside of traditional bank loans is relatively large and growing, and there are many risks associated with it, as I have discussed in previous posts (see here, here, and here). However, it is a topic that will soon fade into the background as regulation issues are resolved, the economy declines, shadow banking institutions fail, and financial reform takes place.
When I first began to study this sector in 2006, shadow banking was mainly referred to as informal finance, which encompassed everything in the non-bank financial sector, from pawn shops to private equity firms. Since then, alternative financial institutions have been revived (such as trusts) or have grown in importance (like credit guarantee companies) and begun to overshadow curb lending. China’s economic boom that preceded the global economic crisis was extended by government spending, and increased investment in fixed assets like real estate or plant expansion allowed the boom to continue.
During times of economic growth, financial innovation thrives, in many forms. Loans were extended to real estate developers who were constructing anything from luxury hotels to new cities, to local governments that were building up infrastructure, and to a range of industries. Many funded ventures are now flagging, and the financial sector, particularly the shadow banking sector, is bearing this stress.
“There is nothing called junk food. The problem with obesity lies with children who do not exercise enough. What is needed is for them to run and jump, and to do this they need to consume high-calorie food. So, food high in salt, sugar and fat is good for them.” This is what was argued vehemently and rudely by representatives of the food industry in the committee, set up under directions from the Delhi High Court to frame guidelines for junk food in the country.
On the face of it there was no one from the junk food industry in the committee. In the early meetings, we only knew that there were members of two associations who were representing the food industry in the committee. But as discussions got under way, it became clear that the big junk food industry was present in the meeting. We learnt that the member representing the National Restaurant Association of India was a top official from Coca-Cola—the world’s most powerful beverage company that is at the centre of the junk food debate globally. The other grouping, All India Food Processors Association, was represented by Swiss food giant Nestle, which has commercial interest in instant noodles and other junk food.