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La Jornada, Mexico

Misguided Economic Priorities in U.S. Endanger Mexico and World


"Instead of invoking a broad consensus to restrain the greed of capital and a reformulation of the economic model, a widely-known decision was made to sacrifice the population and continue with bad pre-crisis habits ... What is urgently needed is a profound reform that puts people - and not capital - at the center of government concern and action."




Translated By Halszka Czarnocka


August 14, 2011


Mexico - La Jornada - Original Article (Spanish)

Former managing director of Goldman Sachs, former U.S. trade representative and current World Bank President Robert Zoellick: It seems, according to him, that many countries have run out of tools to confront an ever-worsening economic situation.


CCTV VIDEO, CHINA [STATE-RUN]: World Bank Chief warns of new danger for U.S. and Europe, August 15, 00:02:37RealVideo

In the best case, warnings by economic specialists about the beginning of a deceleration in the pace of global growth, or, in the worst case, a new recession, are becoming ever more clear and blunt. They range from historian Carlos Marichal, who in an interview with this newspaper spoke of how the world is witnessing "an enormous and unusual global crisis,” to warnings by World Bank President Robert Zoellick, that, "We are at the beginning of a storm new and different - this is not the same as the crisis in 2008.”


In the face of an anticipated set of renewed economic difficulties, just as diverse and troubling are indicators from several governments that have less room to maneuver now then when the financial and economic chaos hit almost three years ago. The recession of 2008-9 has left many countries without resources, has resulted in a dismantling of welfare mechanisms and, as Zoellick himself has noted, means that most developed countries have "depleted their budgetary leeway, and still cannot loosen monetary policy." Moreover, at a time when world economies might pin their hopes on domestic consumption, the level of indebtedness of much of the public and the need to reduce it in the face of a potential rise in interest rates discourages prospects for recovery.  



Confronted with proof of the worsening of a crisis that was never quite dispelled, the failure incurred by many governments after overcoming the initial global recession three years ago has become apparent. Instead of invoking a broad consensus to restrain the greed of capital and reform the economic model still in force in many parts of the world, including in our country, a widely-known decision was made to sacrifice the population and continue with bad pre-crisis habits, and so raise the likelihood of social upheaval. The alleged overcoming of the global crisis was limited to a restructuring of macro-indicators; it didn't touch the intrinsic instability of the current economic model, which generates social inequality, concentrates wealth and favors speculation over productive activity.


Now, with warnings of renewed disaster multiplying, national authorities have no formula other than tired and failed "solutions." An example would be the announcement of a supposed "shielding” of our nation's economy against the ongoing global turmoil. A similar announcement was made at the beginning of the last crisis, which, in the case of our country, resulted in the worst GDP contraction in its history. Moreover, at a time when Mexico requires huge resources to reduce the enormous gap in social equality, build infrastructure, generate jobs, revive the domestic economy and restore welfare mechanisms to help alleviate the worst effects of the crisis, this announcement is anything but encouraging. Recent experience suggests that financial "shielding” serves first of all - in line with the neo-liberal orthodoxy of the group that holds power - to calm speculative capital and foreign investors.


Given current circumstances, it is useless to apply, and even less to announce, solutions that revert to failed policies. What is urgently needed is a profound reformulation of the economic model, so that it puts people - and not capital - at the center of government concern and action, even if this notion continues to generate resistance in the halls of global politics and peripherally, within dependent nations like ours.


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[Posted by WORLDMEETS.US Aug. 18, 10:26pm


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