NWO or ‘Chaos’

The American Recovery and Reinvestment Bill passed this week will define Barack Obama’s presidency. But it is really just the younger sibling to the Troubled Assets Relief Program. To separate the now trillions being handed out to the banksters from the $800 billion being handed out to the lottery winners is to be ingenuous. The elder sister’s patrons are already blackmailing mama Obama, wailing for more trillions or they will plunge the economy into even greater financial crisis. “You ain’t seen nothing yet,” they hissed to Treasury Secretary Geithner, who, according to economist Michael Hudson, quickly “pledged government financing for as much as $2 trillion . . . to spur new lending and address banks’ toxic assets, seeking to end the credit crunch hobbling the economy.”

Hudson calls it “Stage One of a two-stage plan,” so far unannounced, to transfer trillions more to people who, in any sane world, would be behind bars, the purpose being to re-inflate the bubble economy that made them wealthy beyond their dreams while leaving wages stagnant and creating little meaningful work. The “change” president is continuing the Bush-Paulson giveaway, allowing the process of creating a few giant Wall Street-based trusts which will act as the economy’s central planners in the new “socialism for the rich.” Any talk of nationalization should be seen in this context. “Washington has given them $9 trillion so far, with promises now of another $2 trillion — and still counting.” Instead of sputtering about capping CEO bonuses, if he is serious, why hasn’t Obama reversed the Clinton-Rubin repeal of the Glass-Steagall Act, responsible for the massive speculation for the past two decades?

But this is in fine American tradition, albeit taken to the extreme. Bankers have always worked hand-in-glove (either that or dagger-in-hand) with politicians. 19th century Democratic president Grover Cleveland vetoed a bill to give Texas farmers $100,000 to buy seed grain during a drought, saying: “Federal aid in such cases encourages the expectation of paternal care on the part of the government and weakens the sturdiness of our national character.” However, he thought nothing of giving bondholders $5 million the same year. After WWII, Keynesianism provided an intellectual gloss to government handouts to failing industries, especially military, with workers similarly being lectured about belt tightening as executives quietly deposited their bonuses and accumulated their stock options.

To pretend that throwing all this money at a sick economy will heal it is the height of folly. To understand the way out of the crisis, compare the situation with the world food crisis. Is the current economic crisis due to too many people? That may sound foolish — it is — but that is how many economists address the food crisis. Leaving aside the debate about an optimal global (or US) population size, the correct answer to both is: the crisis is due to extremely skewed distribution of wealth and lack of access by the poor to basic food (and increasingly now in the US — shelter).

The current crisis simply can’t be addressed without facing the accumulation of 30 years of creeping — under Bush II, accelerating — income redistribution in favor of the rich. The wealthiest one percent has increased their share of returns to wealth — dividends, interest, rent and capital gains — from 37 percent a decade ago to nearly 70 percent today. This is the highest proportion since records started, worse than the situation in the 1920s, which incidentally preceded the 1930s. Without facing up to this, no stimulus package will bring prosperity to the homeless and jobless. Certainly no tax reductions will bring any positive effect when more and more are too poor to pay taxes, and the rich, who benefit from this, will spend not on basics, but luxury goods, probably imports, or just spirit the extra funds into offshore accounts to avoid any worries.

The centerpiece of the stimulus package, much like president Franklin Delano Roosevelt’s, is job creation. House Majority Leader Steny Hoyer said that, “millions and millions and millions of people will be helped, as they have lost their jobs and can’t put food on the table of their families.” All well and good, though there is no guarantee that even if millions of jobs are created in the short term that this will translate into a systemic recovery. This was the case under FDR. It took WWII — government-enforced socialism for all — to drag the US out of depression.

This brings us to the other distortion that has continued to weaken the US economy since the days of Reagan (really, since WWII): the inexorable militarization of the US economy, spending money on unproductive — indeed destructive — commodities, which only sap the economy’s vitality, providing no general-use infrastructure which can benefit all, no goods which can be consumed or traded except to foreign dictators quelling rebellions. The soaring trade and budget deficits are a direct result of the joint US obsession with weapons and tax reduction. As the Soviet Union found during its economic crisis in the 1980s, spending an exorbitant amount — almost a trillion dollars by the US today — on military non-production is simply unsustainable. America accounts for nearly half of all global military spending, an amount larger than the next 45 nations together.

Just as the answer to the food crisis is promoting land redistribution, providing peasants with ready access to the means of feeding themselves, so the answer to the world economic crisis is wealth redistribution, putting money in the hands of the poor, who will be likely to spend it locally on basics, supporting themselves and their local communities. The most successful of Obama’s stimulus projects will put money into their hands which will be rapidly respent on, say, house repairs, starting new small businesses, paying wages to daycare workers, and the like.

The original stimulus package included a clause requiring US steel to be used in spending, a perfectly rational “protectionist” policy. “Buy American” should not to be denounced per se. It is nothing more than an application of “think globally, but act locally.” Any spending to stimulate the economy should of course rely on local production wherever possible. It is the government’s role to make sure it is more economical to buy and sell locally than truck and fly goods thousands of miles. If this violates WTO rules, then work to change those irrational rules, for as well as hurting local economies, they promote ecologically harmful global warming.

The days of relying on both corporate agriculture and global finance and industry are numbered, the very opposite of the conclusion proposed by Henry Kissinger in The Independent (UK) on 20 January. There, he gloats of the “unique opportunity for creative diplomacy” which the present crisis provides. True, he admits that it struck “a major blow to the standing of the United States ,” encouraging every other country to “seek to make itself independent, to the greatest possible degree, of the conditions that produced the collapse.” So far so good. But his prescription, strangely, is more “common action”, a “political” “new world order,” corresponding to the international economic one now in existence, the alternative being “chaos”.

But political decisions are already largely coordinated among countries at such gatherings as the recent WEF and the upcoming G20. These gathering of the most powerful political and economic leaders occur like clockwork, and any independence shown by mavericks, such as Venezuelan President Hugo Chavez or Iranian President Ahmedinejad, is ruthless attacked and subverted, if possible. No, the NWO, relying on increasing world corporate control — legitimated by use of the likes of the UN — has come to an impasse not by some fluke, but because it is wrongheaded. It has produced “chaos”, and it must be abandoned.

Kissinger calls for “a new Bretton Woods,” finessing the important point that this was a financial institution set up primarily by the victorious US to meet its own global needs. It would be more apposite to call for “a negation of Bretton Woods.” His provides a choice between “an international political regulatory system with the same reach as that of the economic world” (that is, consolidate the current inequalities) vs. a dismantling of the current global monster, and of course opts for the first alternative. But, it, ably administered by Kissinger et al, is the one that brought us to this impasse. The “chaos” Kissinger fears is really the democratic awakening of the people. Since the collapse of the Soviet Union and the apparent eclipse of socialism, they have been lulled into accepting the soothing promises of politicians in thrall to their ever more powerful corporate masters.

“The extraordinary impact of the President-elect on the imagination of humanity is an important element in shaping a new world order,” enthuses Kissinger. But will Obama’s stimulus package be an opening salvo in the battle for even greater imperial overreach, or will Obama listen to the millions of simple Americans who stumped for him and reject this ominous NWO proposed by his patron?

Food is a human right, but production to feed mainly corporate profit will merely lead to more food crises. Similarly, fulfilling all our basic needs should be a human right as enshrined in the vaguely worded UN Declaration of Human Rights, which should be dusted off and promoted as part of the inspiration for Obama’s defining policy tackling the current economic “chaos”. A truly new world order requires stimulating real people, not yielding to banksters’ threats and the failed policies of Kissinger et al. There Is No Other Alternative.

Eric Walberg is a journalist who worked in Uzbekistan and is now writing for Al-Ahram Weekly in Cairo. He is the author of From Postmodernism to Postsecularism and Postmodern Imperialism. His most recent book is Islamic Resistance to Imperialism. Read other articles by Eric, or visit Eric's website.

6 comments on this article so far ...

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  1. Ramsefall said on February 18th, 2009 at 12:08pm #

    Thanks for the contribution, Eric.

    I wonder where that Amerikan Pride index is hovering at now?

    People’s priorities (in general) in the US have been blinded by the immediate satisfaction of capitalism for decades — shop till you drop and spend, spend, spend on frivolous distractions. Now that the ship is sinking, priorities will have to be realigned — sink or swim. Better have those life preservers handy.

    What’s coming is inevitable, hopefully the people haven’t forgotten how to produce their own food.

    It’s time for Obama to pay back all his wealthy supporters who funded his campaign, no sense in waiting or hoping on assistance for the people.

    Best to all.

  2. Michael Kenny said on February 18th, 2009 at 1:37pm #

    Kissinger’s article is just one of a long series by people who are desperately trying to prop up the existing system. In the same vein, Mike Whitney refers elsewhere on this site to Ambrose Evans-Pritchard’s absurd proposition that “Eastern Europe is going to blow”. The good news lies in the fact that all these pillars of the Ancien Régime are so obviously scared. Trying to convince your opponent that you’ve already won the fight and he is wasting his time resisting you is one of the oldest tricks in the propaganda book and when you see people using it, you know that, in their own heads, they think they are in big trouble. Let’s hope Kissinger is right on that score!

  3. Jeff said on February 18th, 2009 at 6:58pm #

    The hen house no longer stands. The fences that kept out the foxes disintegrated and only the posts remain. Reminds you of the Empires past. The foxes will not starve as they will feed on the carcasses of the long gone hens. Maybe the next houses should be filled with nothing but hawks.

  4. Mulga Mumblebrain said on February 18th, 2009 at 8:37pm #

    I remember when the land tax ‘reform’ referendum was about to be held in California, in 1978 I believe, Propsition 13 or some such number, that I read a prescient article that stated that the land tax reform was just going to be the beginning. The rich in the US were not going to tolerate any hindrance to the exercise of their prerogatives any longer. Roosevelt’s New Deal and Johnson’s Great Society were firmly in their sights, as was the Soviet Union. We all know the New Cold War was launched soon thereafter, under Carter, and the election of Reagan, a politician created as a marketing exercise by Big Business, ushered in the full flowering of a reactionary age.
    The abomination known as ‘Reaganism’ or ‘Thatcherism’, (known in Australia with utterly unconscious irony as ‘economic rationalism’) had already been given a test-run in Chile, at the point of a bayonet, with the recalcitrant killed or ‘disappeared’. It soon cut a swathe through the Western world, and then, after the carefully contrived ‘debt crisis’ in the Third World, it was used to halt and reverse decades of progress in the poor world.
    The catalyst for this reaction to go into high gear, and thereby sow the seeds of its own destruction, was the arrival of Gorbachev on the scene. He had a difficult task, being faced by crazed fundamentalists itching to bring Armageddon about, but his actions at the time appeared insane. He seemed to trust the word of US politicians, surely a mistake no-one with the least knowledge of history or the pathopsychology of the (Other) Chosen Race, whose Manifest Destiny it is to rule over the world in God’s name, could ever make.
    Naturally he was double-crossed and the Yanks installed the Quisling to end all Quislings, Mr Cirrhosis himself, Yeltsin, who immediately followed orders and oversaw the break-up of the USSR. The era of globalised pillage, wealth accumulation by the parasitic elites, and rising poverty and inequality went into overdrive, ending, as these orgies of capitalist avarice always do, in a debt deflation and depression. Only this time the debt is great, the financial fraud was greater and the fall will be greater and further than ever. Couple it with Peak Oil, the rise in the price of which, only partly due to parasitic speculation, was surely one of the straws that broke the camel’s back last year, and anthropogenic climate change, and you have a recipe for complete global collapse, famine, war and mass death on a scale never before seen. I think there is a compelling argument to be made, that this is precisely what the global parasites desire, a mass culling to rid the planet of ‘useless eaters’ they fear, despise, and whose very presence, in their eyes, ensures ecological collapse. A crude and inhumane Malthusianism has always animated global elites, who were the great advocates of eugenics and colonial massacres of unwanted indigenous, a process that continues to this day in Gaza, Iraq, Afghanistan, Somalia and the Congo.
    Sometimes I allow myself the luxury of imagining that Gorbachev was not the complete fool he appeared to be. Perhaps by surrendering, handing total global dominance to a regime of unstable psychopaths driven by an ideology both pitilessly cruel and inhumane and inherently self-destructive, he knew that he was, in Lenin’s words, somewhat re-arranged, ‘Handing the capitalists the rope with which they would hang themselves’. The capitalist system is irretrievably broken. If we do not take this last opportunity to see it consigned to the cess-pool of history and replaced by a sustainable, egalitarian and humane alternative, then we’ll just become a foot-note in the ‘Galactic Dictionary of Disappeared and Missing Life-forms’, right up there with the dodo.

  5. Cincinnatus Town said on February 18th, 2009 at 9:32pm #

    The demise of the capitalist system is certainly not on the agenda. But control of that system most certainly is being fought over tooth and nail, as much in newspaper columns and on blogs as in the corridors of power. People like Michael Hudson are trying their best to make the case for a (relatively) progressive solution to the Crisis, but the debate around Obama is mostly controlled by member of the Rubin Gang who have not yet given up hope of getting the public to make good the losses run up by the banksters in the shape of the “toxic assets”. Fear of a domino effect of collapses in E. Europe and elsewhere then leading to even worse in the US becomes a very useful tool for Rubin, Summers et al. Not that there isn’t danger out there, but the mood of panic all but eliminates the prospect of sober scrutiny. There are those who believe that Rubin Gang can be countered.

    I am told by a currency trade expert with connections to a Gulf royal family, that there is a small but growing faction within Obama’s immediate circle arguing that the insolvent Banks should be allowed to die, euthanized by market discipline. Of course, credit will be needed by business and consumers, so the U.S. could then set up a temporary “Reinsurance Bank”, open to subscription by private and taxpayer interests at identical terms, to guide the U.S. economy from its current all time high debt to GDP ratio through the debt deflation process necessary to get it back to aggregate solvency, something that is likely to take a minimum of a decade and may take much of the century. The insiders who are pushing for this suspiciously free enterprise solution to the Crisis base their arguments on complementary economic and political analyses.

    From the economic standpoint they point out the obvious: There’s no such thing as a free lunch. The total amount of garbage assets on the books of the Banks is essentially unknowable. Michael Hudson, Bloomberg and others put at $9 to $12 trillion the sums already pledged/paid in loans or insurance by the Fed, FDIC and Treasury to bail out the Banks; global reaction shows that this amount is not even in the ballpark. If the garbage assets cannot be unloaded at close to claimed value onto unsuspecting aliens from the Planet Hayek, then someone has to pay the price of the write-down. The choices are two: the shareholders, creditors and bondholders of the Banks in the form of (largely, tax-deductible) losses, or the American Taxpayer in the form of wealth transfer to the rich and reckless. If the latter, then the mechanism for doing that will sooner or later involve the printing of tens of trillions of dollars, all in the form of national debt, which will as a consequence double, triple, or even quadruple. This would make the stimulus package that has Republican operatives howling about the future devaluation of their children’s trust funds seem like small beer.

    From the political perspective they point out another homespun truth: You can’t fool all the people all of the time. These newfound Libertarian Democrats know perfectly well that the original plan was to do just that, i.e. transfer the cost, as discreetly as possible from the Banks to the taxpayer, and indeed while the sleight of hand of Paulson/Geithner Phase One was going on, the Fed was merrily making available the first $2 trillion in emergency loans – that amount may now be up to $6 trillion – to the Banks against collateral that even Bloomberg’s lawsuit could not compel them to reveal, but the general quality of which can be divined by all but the militantly unreflective. While the Fed’s actions were known to specialists, the Bloomberg lawsuit brought the matter to the attention of a larger, if, thanks to the somnambulistic Free Press, still not general public. Thousands of blogs and an avalanche of circulating emails later, and this kind of backroom rescue of the Banks is now off the table, no doubt to the deep chagrin to the Banks and to the Rubin faction within the Obama Brains Trust.

    The politics get even murkier: Had the Fed’s discreet emergency loan program been able to go on sufficiently long to rescue the banks – albeit at the cost of the eventual near-destruction of the real economy – then the partisan positions would be simpler: Democrats could say that it all happened under Bush, while Republicans, admittedly in a weaker position, could suggest that they were not Bush and anyway Obama had signed off on all that during the infamous McCain stiffs Letterman period and drop dark hints that there was some kind of a nod and wink deal between big Finance and the incoming Administration, perhaps going back to Larry Summers’ flight back from the Democratic National Convention in the Citigroup private jet.

    Now it’s all different and as more than one commentator has pointed it, we get to see the problem of having two viciously competitive parties representing the same essential interests. Republicans have very little to lose in watching Obama struggle with this issue, above all since “nationalize” may well be the worst N-word in the American language and nationalize is what Obama’s progressive brigades want him to do, while those who paid for his campaign – paid when it counted, in credibility, back-channel endorsements as well as treasure – still are counting on collecting their get-out-of-jail-free cards. The Rubin Gang within the Brains Trust are of course still wedded to the “too big to fail” hypothesis, and point out that the far too small to be effective stimulus bill along with the frozen credit markets virtually guarantees that things will get much worse before they get better and that, say, a few months along down the road paying off the Banks’ bad bets, even at the price of doubling or tripling the national debt will seem suddenly palatable to virtually the whole world.

    To the economic argument that “too big to fail” is the wrong lens to use and that an appropriate analogy for the moribund credit system is that of a crashed car whose repair cost is going to be much higher than its replacement value, the Libertarian Democrats add that even if the country could be made to swallow Bankers’ Bailout in a few months’ time, the chaos in the economy would still mean that the Republican attacks would be unrelenting and that the mid-terms would spell disaster for the Democratic Party (and usher in an era in which Republicans suddenly rediscover the vital importance of limits to Executive Power).

    The Libertarian Democrats also concede that the biting the hand that pulls the strings will unleash a tide of political fury – someone on Fox will surely find a way to call letting the markets decide the fate of the Banks “a Communist plot” – of a level hitherto unknown in American politics and that that, too, could spell disaster for the Democratic Party. But even if the politics argued in favor of the Bankers’ Bailout, better, they say, to go down to defeat saving the nation then to hold on to power destroying while its economy.

    Beyond the conversations that are going on within the Brains Trust, my trader friend draws attention to another fact: the U.S.’s creditors have no permanent interest in the welfare of the Banks and Wall Street per se; what matters to them is the long-term stability and solvency of the U.S. economy as a whole. If the cost of saving the Bankers risks turning holdings of Treasuries into monopoly money, then Beijing, the petro-kingdoms and others are no doubt already making sure that their arguments in favor of the euthanasia of the Banks are being heard by the Obama administration.

    I don’t really know if my friend is right that this debate is going on around Obama. But I certainly hope he is.

  6. anthony innes said on February 21st, 2009 at 9:16pm #

    “government enforced socialism for all” did not drag us out of depression only into another war.The Bank of International Settlements is the culprit yet again.Corporate fascism has taken over from the former aristoes and debt peonage beckons for the young.
    Mulga M nice shooting bloke.