Some of the most trusted institutions in the world are finally awakening to the dangers of unrestrained global capitalism.
Unions, of course, have for decades warned about the emerging global order. The reason for integrating regional economies into global networks has always been to shift power away from workers. The imbalance, we warned, was dangerous to all of our futures.
It gives me no satisfaction to say we were right. The world's economy is now dominated by multinationals roaming the globe to sniff out tax havens and cheap labor; out-of-control banks extorting governments for bailouts again and again; and politicians catering only to greed. All the while, America's middle class grew poorer, and smaller. Workers lost their jobs, their savings and their houses. Now their Social Security and Medicare are attacked.
The new organization of the world economy, dreamed up by the bankers and the multinationals, has failed. Don't take my word for it: This is what the World Bank, the International Monetary Fund and the Council on Foreign Relations are reporting.
The Council on Foreign Relations, for example, just published a paper that explicitly rejects the fantasy that everyone is better off when the free market prevails. The paper, written by economist Michael Spence, says that America will soon face a jobs crisis. He makes the striking argument (for the CFR) that so-called free-market solutions won't work. "That seems clearly incorrect and is supported by neither theory nor experience," he writes.
"Assuming that the markets will fix these problems by themselves is not a good idea... In truth, all countries, including successful emerging economies, have addressed issues of inclusiveness, distribution, and equity as part of the core of their growth and development strategies," he concludes.
You might think Spence was influenced by a union representative on the Council's board, but there are none. Its board consists of retired generals, bank presidents, Cabinet officers, prominent academics, and even one of the world's biggest union-busters, FedEx chairman Fred Smith.
Like the Council on Foreign Relations, the World Bank has long sided with powerful special interests in developed nations, often to the detriment of the lower and middle classes. So it was surprising to hear the World Bank call for justice and jobs earlier this month.
The Bank issued a report saying unemployment "was overwhelmingly the most important factor cited for recruitment into gangs and rebel movements." World Bank President Robert Zoellick said, "If we are to break the cycles of violence and lessen the stresses that drive them, countries must develop more legitimate, accountable and capable national institutions that provide for citizen security, justice and jobs."
This was a stunning statement coming from Zoellick, a former managing director at Goldman Sachs and President George W. Bush's trade representative. As a member of America's political and financial leadership, you would expect Zoellick to be blind to the need for justice and jobs, both as a moral duty and as a matter of self-interest.
The World Bank's sister institution, the International Monetary Fund, has typically taken a hard line against working people. For decades the IMF made emergency loans to troubled governments only after forcing them to cut spending on social programs. The IMF has even demanded worker's rights be weakened as a condition of granting a loan.
And so the IMF was perhaps the last institution you'd expect to argue that workers need more bargaining power. Yet the IMF came out with a paper last year that said exactly that.
The paper, titled "Inequality, Leverage and Crisis" presented evidence that extreme inequality between workers and the rich was a reason for the current Great Recession.
The paper said there will be "disastrous consequences" for the world economy if workers do not regain their bargaining power. It suggests radical changes to the tax system and debt relief for workers.
I am heartened that these respected institutions are sounding the alarm over the policies that are destroying the working classes around the world. Perhaps our combined voices will make some difference.
Make no mistake, however; the message cannot be denied, no matter who delivers it: Our economy rewards wealth, not work. It has impoverished the middle class and taken a savage toll on the growing ranks of the poor.
We need our leaders to hear this message clearly from all of us and to seek out a new economic course for our country. I've been waiting a long time for political leaders to show they understand this. I hope that I -- along with the IMF, the World Bank and the Council on Foreign Relations -- will not be waiting for much longer.
Follow James P. Hoffa on Twitter: www.twitter.com/TeamsterPower
Logic dictates that capitalism can have no other end.
Of course I completely agree that the talk about how it's all so helpful to have multinational firms and banks was a bunch of horse crap.
Not a single legal or regulatory system and not a single national or multinational segment of capital markets has proved even remotely resilient in the face of the failure of a few institutions representing a tiny fraction of market capitalization of the sector.
This means that the talk about how it's all such beautiful globalization going on has received a straight F in the financial crisis.
And it will receive another straight F in the next one.
Which is why it deserves a straight F right now.
25% of the world's population consumes 80% of its resources while creating 70% of its pollution. This is unsustainable for everyone. Our global economic system enslaves third world countries and takes jobs from us just so we can have shiny plastic crap that winds up in a landfill after the newness of it wears off.
Modern-day slavery is alive and well. Globalization has allowed it to be pushed out of sight and corporate propaganda, aka advertising/marketing/PR, makes sure it is kept out of mind.
With globalization labor remains cheap, and free markets have no pressure to widely distribute income.
Under this scenario the pie cannot grow. It is in fact a case where reducing the number of billionaires does increase the pie. Or looked at the other way, decreasing the number of impoverished does increase the pie.
The West's hegemony came about because of a huge explosion of income distribution, concurrent with advances in science and production capability.
In today's global economy, there isn't a sufficient explosion of income distribution in the East, where production has exploded fueled by income from the West.
We're facing the friction of Eastern societies, (for the most part), where production has exploded but where the societies have poor methods of income distribution.
The economic pie cannot grow without wide income distribution. Not the other way around.
"Under this scenario the pie cannot grow." The pie is the pie, it doesn't get bigger or smaller, it can only be sliced more equitably.
"The West's hegemony came about because of a huge explosion of income distributiÂon, concurrent with advances in science and production capabilityÂ."
It came about because, after WW II, Western corporations and the U.S. government joined forces to assert control over foreign governments and natural resources around the world, no matter what the cost.
The CFR are not only traitors to the American worker, they are traitors to the very idea of life, liberty, and the pursuit of happiness.
The fact that they are (beginning) to eat crow now won't really help them. Its far too little, far to late. Look to China to be the next global driver of the economy.
EXACTLY. It was no accident.
For proof, one need only look to see who's doing much better and who's doing much worse.
It ain't us.
Go read - here at HuffPost - "Seeking Business, States Loosen Insurance Rules"
Another "accident", which explains the "compulsion" to privatize Medicare.
Deregulation of financial markets: Even the IMF now admits financial market deregulation was a mistake. The U.S. should listen. - By Joseph E. Stiglitz - Slate Magazine
"...As unequal as America was before the Great Recession, the crisis—and the way it has been managed—has led to even greater income inequality, making a recovery all the more difficult. America is setting itself up for its own version of a Japanese-style malaise.
But there are ways out of this dilemma: strengthening collective bargaining, restructuring mortgages, using carrots and sticks to get banks to resume lending, restructuring tax and spending policies to stimulate the economy now through long-term investments, and implementing social policies that ensure opportunity for all. As it is, with almost one-quarter of all income and 40 percent of U.S. wealth going to the top 1 percent of income earners, America is now less a "land of opportunity" than even "old" Europe.
For progressives, these abysmal facts are part of the standard litany of frustration and justified outrage. What is new is that the IMF has joined the chorus. As Strauss-Kahn concluded in his speech to the Brookings Institution shortly before the fund's recent meeting: "Ultimately, employment and equity are building blocks of economic stability and prosperity, of political stability and peace. This goes to the heart of the IMF's mandate. It must be placed at the heart of the policy agenda..."
Years ago, people tried to work hard and achieve a working or middle class lifestyle.
You know the drill.....work hard, save your money, buy a house (fixed rate mortgage with 20% down), and settle down.
Hard work was rewarded by decent pay and benefits and retirement.
Now?
Teachers and other public workers are demonized.
Private sector workers have already had stagnating and falling wages, loss of benefits......
Both private and public workers have been made to feel like cogs in a machine. Like animals or robots who are easily replaceable. AND are given almost no respect as human beings.
Ayn Rand must be smiling.
NOW?
People are insecure. Afraid. Worried about the future.
And....worse for America....good habits have been switched for bad ones.
Ordianry people nowadays think nothing of crushing debt and declaring bankruptcy.
Ordinary people think nothing of doing strategic defaults on mortgages.
Ordinary people think nothing of getting theirs and who cares about anybody else?
Ordinary people have picked up the BAD habits of the oligarchs and corporations only on a smaller scale.
And ya know what?
I can't completely blame them.
Our country is being destroyed from within....what I call economic treason.
Wake up America, especially the politicians and oligarchs who runs things.
Before it is too late.