Re: SC73

http://www.globalresearch.ca/index.php?context=va&aid=9737

Inflation and the New World Order

......................INFLATION AS CLASS WARFARE?

Then what is the cause of the inflation? On this subject, commentators are all over the map, often without citing any truly definitive data. Neither the government nor politicians offer any help at all, even as companies like Exxon-Mobil, BP, and Shell report quarter-after-quarter of record profits. What have we heard from John McCain or Barak Obama, for instance, on the subject? Answer: nothing.

So is it true, as Professor James Petras said in a recent article, that the causes are not accidental, but are “products of public policies which deeply affect markets, supply and demand, consumers, producers and speculators”? According to Petras, these policies result in “declining capitalist investment in the productive economy, the vast increase of capital flowing in the paper economy, the huge increases in profits and the grotesque salaries, bonuses and payoffs to senior executives, totally unrelated to ‘performance.’” (James Petras, “Inflation and the Specter of World Inflation,” Information Clearing House, July 20, 2008)

In this respect, inflation is a wealth-transfer mechanism that benefits the already-rich. Petras continues:

“In other words, in the contemporary economy, inflation benefits the wealthy because they pay their workers in deflated currency, while they can take advantage of inflation to further jack up prices and then income. [Thus] the upper classes have fortified their economic positions to take account of inflation through their power over prices, income and other compensations in a way that wage workers and people on fixed income and other vulnerable sectors cannot. Bankers protect their loans via adjustable interest rates. Monopoly resource owners jack up prices to retain profits. Wholesalers mark up prices to compensate for higher commodity prices. Large-scale retailers squeeze final consumers – the great majority at the bottom of the production and distribution chain.”

Doubtless there is an impact from all these factors, though no one knows for sure how much. With regard to food prices, geopolitical factors deserve particularly deep scrutiny. Petras writes:

“In Asia, particularly Pakistan, India, Indonesia, South Korea, Philippines, Nepal, Mongolia, and China, hundreds of millions of workers, peasants, artisans, and low-paid self employed workers, as well as housewives and pensioners have engaged in sustained mass protests as they experience a decline in the quality and quantity of food purchases as prices skyrocket. In Africa, hunger stalks the land and major food riots have occurred from Egypt through Sub-Saharan Africa to South Africa . In the Caribbean, Central and South America, food riots have led to the overthrow of regimes, mass protests, road blockages from Argentina , Bolivia , through Colombia , Venezuela and Haiti .”

In Haiti , hungry people eat mud cakes laced with salt and a little margarine. As reported by Rory Carroll of The Guardian UK:

“The global food and fuel crisis has hit Haiti harder than perhaps any other country, pushing a population mired in extreme poverty towards starvation and revolt. Hunger burns are called ‘swallowing Clorox,’ a brand of bleach. The UN's Food and Agriculture Organization predicts Haiti 's food import bill will leap eighty percent this year, the fastest in the world. Food riots toppled the prime minister and left five dead in April. Emergency subsidies curbed prices and bought calm, but the cash-strapped government is gradually lifting them. Fresh unrest is expected.”

According to relief workers in Haiti , mass starvation could begin in six to twelve months. Meanwhile, in our own country, traders have been making millions short-selling the declining U.S. stock market while some hedge fund managers made over a billion dollars last year. Their lobbyists have been battling in Congress to stop a move to raise the relatively low rate of taxation on their capital gains to the level of earned income. In other words, while ordinary people starve, Wall Street is doing just fine.

The situation in many developing nations is desperate in part because the International Monetary Fund, under the “ Washington consensus,” required them to give up their subsistence agriculture in favor of crops raised for export by agribusiness, while the people who once supported themselves on family farms have had to migrate to urban slums. The Western corporate-owned press calls it “free market reforms.”

The devastation wreaked upon the world has been eloquently described by Dennis Brutus, a former South African activist, now Professor Emeritus at the Department of African Studies, University of Pittsburgh . Brutus writes:

“When I was serving a sentence on Robben Island during the struggle to end apartheid in South Africa , I never suspected that the end of white minority rule in my home country would be the beginning of yet another struggle for justice - this time against the World Bank and the International Monetary Fund.

“As architects of the global economy, the World Bank and the IMF have enormous power and shape the conditions of peoples' lives around the world. That power has been used to create a global economy friendly to the interests of the wealthy and multinational corporations, but devastating to the lives of hundreds of millions of impoverished people.

“I live now in the United States where people so far are relatively unscathed by the reordering of the global economy for the benefit of the very rich. I do not see the squatter settlements, the polluted rivers, the street children, and the elderly beggars that are all too visible in Africa, Asia, or Latin America . I am not saying, of course, that the poor in the U.S. don't suffer from the ravages of the extremist global economic system - they do. Even the U.S. middle class is beginning to see their comfortable lives threatened by the concentration of wealth in fewer and fewer hands.

“The IMF and World Bank, with the ‘structural adjustment programs’ (SAPs) they impose on indebted countries and their pro-corporate development projects, are the leading edge of oppressive globalization. The policies they have imposed in Africa, Latin America, and Asia have condemned people to stagnation, poverty, and death for twenty years, and those policies are now being adopted in the countries of Europe and North America too.” (Human Quest May/June 2001).

IMF policies require governments to cut food price subsidies, restrict credit to farmers, and divert prime farmland to non-food export crops such as tobacco, coffee, and cotton in order to provide cheap bulk commodities to Western consumers. The victimized nations must then import wheat, rice, and other food products from outside. But prices for these food staples depend on world markets which they cannot influence, much less control.

Speaking of IMF’s directors and economists, Brutus writes:

“Although some of them may have tricked themselves into believing that the neo-liberal economic model they defend is immutable, like a law of nature, most of them probably know that they are perpetrating a fraud of global proportions. Michael Camdessus, who retired after thirteen years as Managing Director of the IMF, told a group of U.S. religious leaders that he was willing to ‘sacrifice a generation’ in order to realize the so-called benefits of the macroeconomic model.”

Camdessus, a Frenchman who headed the IMF for thirteen years, became a legend for the harshness with which he attacked the developing world’s national economies. Obviously his willingness to “sacrifice a generation” reflected the official program of the Western financial oligarchy, but today their targets extend well beyond the hapless victims of the Washington Consensus.

As Brutus indicates, the same policies are being applied to the inhabitants of the once-prosperous nations of Europe and North America as well. But doesn’t it really point to a worldwide regression to a neo-feudalist system where the rich will eventually lord it over a vastly-reduced population of debt-serfs? Is this the essence of the “New World Order” that the international elite have seemingly been planning in earnest since the Club of Rome began talking about overpopulation in the late 1960s?

At least the developing nations are now fighting back, with IMF lending running at a fraction of what it once did and some nations such as Venezuela dropping out altogether. Resistance is also being exhibited to similar policies of the World Trade Organization which likewise seeks to destroy tariffs and other trade barriers that developing countries might wish to use to protect their farmers and workers.

Just last week the “Doha Round” of WTO trade talks collapsed at Geneva when India and China led the way in refusing to alter their tariff and subsidy policies. According to the Center for Economic and Policy Research, the collapse was not surprising, “given the reluctance of India and other developing nations to sacrifice food security measures in the wake of the recent global spike in food prices.”

According to Deborah James, Director of International Programs for the Center for Economic and Policy Research, who had been observing the talks in Geneva , “The tariff cuts demanded of developing countries would have caused massive job loss, and countries would have lost the ability to protect farmers from dumping, further impoverishing millions on the verge of survival.”.................