Beijing’s ‘Legless’ Stimulus
|April 19, 2009||Posted by Jeffery J. Smith under Progress Report, The Progress Report|
Beijing’s ‘Legless’ Stimulus
As the Elite Loots the US, Americans become Serfs
Money means nothing without power. This country, as every scholar has pointed out, is a rent-seeking one, where the state functions merely to give privilege and largesse to a favored few. First, get the power, then get the money.
Which country was referred to? All of them qualify. However, the writer (Conrado de Quiros) denoted the Philippines (Daily Inquirer, Apr 1). Nevertheless, its how the elite and state interact in all nations. We trim, blend, and append two more 2009 articles from: (1) the Wall Street Journal Asia, Apr 2, on China by Victor Shih (author of Factions and Finance in China) and (2) Truthdig, posted on AlterNet Apr 7, on American serfs by Chris Hedges, a Pulitzer prize-winning reporter whose latest book is Collateral Damage: America’s War Against Iraqi Civilians.
by Victor Shih and by Chris Hedges
- Beijing’s ‘Legless’ Stimulus
Even if Chinas stimulus manages to produce some positive numbers, it is likely to fall short. This result is not accidental. It is the outcome of a political system dominated by state planners, large state corporations, and local officials.
The stimulus projects will demand large tracts of land from the local land banks at little compensation. Thus, local governments do not want to “waste” this land on public projects, especially when the central government has set a strict limit on the amount of farmland that can be developed. Local governments sometimes stall on central projects, especially when it comes to welfare housing. In other cases, they forcefully resettle residents with little compensation to reduce the cost of obtaining land. The Ministry of Land and Resources has organized an internal work group to monitor these problems.
Generating employment is not the only means of holding on to power. Powerful rent-seeking lobbies, including the state corporations and local officials who demand their large slices of the stimulus package, directly influence the leadership’s ability to stay in power. Ordinary citizens and small firms, in contrast, are largely absent from the political process, and thus exert no direct influence on the implementation of the spending.
JJS: Amusing that even specialists think that such behavior is specific to the nation they study. But its everywhere. And such cheating is returning America to the rest of the pack.
- Who Should Resist, and Who Will Become Serfs?
America is devolving into a third-world nation. And if we do not immediately halt our elite’s rapacious looting of the public treasury we will be left with trillions in debts and widespread human misery. Our anemic democracy will be replaced with a robust national police state. The elite will withdraw into heavily guarded gated communities where they will have access to security, goods, and services that cannot be afforded by the rest of us.
The Obama administration, rather than chart a new course, is intent on re-inflating the bubble. Vast, unimaginable sums are being placed into corporate hands. They will use this money as they always have — to enrich themselves at our expense.
Since the bailout started last September, the banks haven’t lent it. They have used some of it for acquisitions or to preserve their bonuses or their dividends. If they quit, they get a golden parachute.
Ironically, American International Group Inc.’s former chairman, Maurice R. Greenberg, said AIG would have been better off filing for Chapter 11 bankruptcy protection than seeking government help.
“Bankrupt corporate capitalism is on its way to bankrupting the socialism that is trying to save it,” Ralph Nader added.
Our commitments now total some $12 trillion. It was only a couple of months ago that our expenditures totaled $9 trillion. And it was not long ago that such profligate government spending was unthinkable.
Households lost $5.1 trillion, or 9%, of their wealth in the last three months of 2008, the most ever in a single quarter in the 57-year history of record keeping. For the full year, household wealth dropped $11.1 trillion, or about 18%. These figures did not record the decline of investments in the stock market, which has probably erased trillions more.
We have been borrowing at the rate of more than $2 billion a day over the last 10 years, and at some point it has to stop. The moment China, the oil-rich states, and other international investors stop buying treasury bonds the dollar will become junk. Inflation will rocket upward.
A furious and sustained backlash by a betrayed and angry populace, one unprepared intellectually and psychologically for collapse, will sweep aside the Democrats and most of the Republicans. Fascists will find a following with promises of revenge and moral renewal. The elites will retreat into their sheltered enclaves of privilege and comfort. We will be left bereft and abandoned outside the gates.
The stimulus and bailout plans are not about saving us. They are about saving them. We can resist — which means street protests, disruptions of the system, and demonstrations — or become serfs.
JJS: Every societys history shows how when a few capture rent, that creates class and state and privilege. Thus, to create equality and community and rights as customs, we need to share rents. That is, we need the policy of geonomics — replace counterproductive taxes with land dues for exclusive use of sites and resources and replace addictive subsidies with rent dividends to all citizens. On the platform of economic reform we could enjoy political justice — and far fewer disputes to settle politically.
Jeffery J. Smith runs the Forum on Geonomics.
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