Tuesday, July 10, 2012

523 Syriza the only hope for Greece. Sack the Economists who serve the 1%

Syriza the only hope for Greece. Sack the Economists who serve the 1%

(1) Syriza the only hope for Greece
(2) Greece's Left party Syriza pledges to tear up loan agreement with EU
(3) Syriza will cancel the bailout, raise taxes on the rich, and lower
the VAT (which taxes the poor)
(4) Banks and Governments are painted as the villains. But what about
(5) Cooperative Banking: move your money out of the big banks - Ellen Brown
(6) Take back the "money power": The Revolution will Not be Televised -
Ellen Brown
(7) Petras: Latin American economies swap Self-Sufficiency for Resource
Exports (& reliance on Mining companies)

(1) Syriza the only hope for Greece - Peter Myers, June 5, 2012

The stock market plummeted in the last few days, in response to bad
unemployment statistics in the US. But anyone who had probed beneath the
surface (eg by visiting the Shadow Stats website) would have known that
the official statistics have been fudged for years.

We are in a World Depression. The Austerity programs are promoted by
those who caused it and who deny its reality.

Needless to say, I support Greece's Left party Syriza. Coming in the
wake of the election of France's Socialist President, with his
denunciation of austerity, Syriza's victory will hopefully pave the way
for a renegotiation of the role of the Euro, the ECB and European
finance policies generally. Either that, or the Drachma must be restored.

(2) Greece's Left party Syriza pledges to tear up loan agreement with EU


Greek leftists: No debt repayments


Independent On Line, June 3 2012 at 01:34pm

No debt repayments, higher salaries and freedom from EU-IMF tutelage:
Greece under the radical leftists, who are poised to win a June 17
election, seems a world removed from its current recession nightmare.

The Syriza party has pledged to tear up Greece's loan agreement with the
EU and the IMF, which is currently keeping the country on its feet but
at the cost of an unprecedented wave of austerity cuts and structural

If implemented, such a programme, which would also mean the
nationalisation of banks and a halt to privatisation, could well mean
Greece's ejection from the eurozone, potentially sending shockwaves
through the global economy.

Fed up with two years of salary and pension cuts, Greek voters on May 6
punished larger parties associated with the bailout and catapulted
Syriza to second place, within striking distance of the top.

Opinion polls show that the radical leftists, only the fifth party in
2009, could even emerge as the victors in this month's repeat ballot.

The condensed programme of the loosely-knit coalition of moderate
Communists, Trotskyists, ecologists and other leftist groups was
announced on June 1.

In it, the party's leading minds set out their vision for a more
equitable Greece, liberated from the excesses of capitalism, heavy
industry and political corruption.

Under Syriza's blueprint, state loan repayments to service a debt of
over 350 billion euros ($433 billion) are to be frozen to free funds for
social support programmes.

The privatisation of major public companies - a key condition of the
EU-IMF bailout deal - is to be suspended as well.

Greek banks that draw on European support funds to recapitalise
themselves after a landmark state debt cut brokered by the previous
government in March will be "nationalised and socialised."

And the EU-IMF bailout deal, dubbed here the "memorandum," which the
leftists say has brought only recession and misery to Greece, is to be
rejected and redrawn from scratch.

"The first act of the government of the Left will be to annul the
memorandum and its application laws," Syriza's 37-year-old leader Alexis
Tsipras said on Friday.

"We will seek a new renegotiation of the debt at European level, aiming
to drastically reduce it, or a debt moratorium and a suspension of
interest payments until conditions for the stabilisation and recovery of
the economy are created," Tsipras said during a presentation of the
party's revised programme.

A previous version of Syriza's platform, drawn up in April, had pledged
to outlaw offshore company dealings and shut down NATO bases in Greece.

The revised version released on Friday plans a withdrawal from NATO
operations, starting from Greece's mission to Afghanistan, and a future
"disengagement" from the military alliance altogether.

"At a time when the international balance shifts and US hegemony
increasingly comes into question, the policy of Euro-Atlanticism and
complying with NATO war plans has no future," said senior party member
Thodoris Dritsas.

The older parties Syriza decimated on May 6, the socialist Pasok and the
New Democracy conservatives, have dismissed its programme as unrealistic
and Tsipras as an arrogant demagogue still wet behind the ears.

"Those who speak of a one-sided rejection of the bailout are like
children playing with matches inside an armoury," New Democracy leader
Antonis Samaras said during a presentation of his party's own programme
on May 31.

Syriza's leading economist Yiannis Dragasakis, a former junior finance
minister in 1990, believes Greece could take a political decision to
reject the loan agreement and dump unwanted labour reforms yet still
retain vital EU-IMF loans.

"Some elements of the bailout deal can be rejected unilaterally. Others
require cooperation to do so," he said in a recent televised interview.

Even European MP Daniel Cohn-Bendit - a left-wing icon and staunch
critic of Greece's bailout terms - recently dismissed Syriza's plans to
reverse wage cuts as "idiotic".

"Europe will give no more money, Greek coffers are empty," he told a
Greens news conference on May 23, after Tsipras had visited Paris and

"It's like asking someone 'how would you like to commit suicide, with a
gun or an axe?'" he said.

In March, Syriza sued Germany's Bild newspaper for a million euros
($1.26 million) after it allegedly portrayed Tsipras as a
"half-criminal" who "openly supports violent anarchists."

"Will these radicals soon be governing Greece?," the tabloid asked its
readers. - Sapa-AFP

(3) Syriza will cancel the bailout, raise taxes on the rich, and lower
the VAT (which taxes the poor)


Syriza aims to renegotiate Greek bailout

Financial Times - FT Specials | Posted on Jun 03, 2012 at 12:12am IST

Athens: The leftwing party that came a surprising second in last month's
Greek elections has pledged to halt interest payments due on the
country's debt and revoke the terms of its bailout agreement if it comes
to power in a re-run vote on June 17.

Alexis Tsipras, leader of the far-left Syriza party, said he would also
cancel ?11bn of cuts due to be implemented this month, reverse promised
labour reforms and raise taxes on the wealthy.

The proposals are the most radical unveiled to date by the hardline
leftwing party which is neck and neck with the pro-bailout conservative
New Democracy party, according to opinion polls.

"The choice for Greeks on June 17 is one: bailout or Syriza's government
programme," Mr Tsipras said in a speech on Friday. "You either implement
the bailout or you cancel it. There is no such thing as a more or less
evil bailout, a more or less inappropriate medicine."

At the heart of the plan presented on Friday by Syriza is a
renegotiation of the austere terms of the ?174bn emergency loan Greece
received from the EU and the International Monetary Fund, including a
suspension of interest payments.

"We cannot pay €1bn per month on interest payments as long as the
recession goes on," George Stathakis, one of the party's four chief
economists, said in an interview with the Financial Times.

Syriza would forgo a promise to lenders to identify another ?11bn in
budget cuts by the end of this month as well as a commitment to
prioritise government revenues for the repayment of foreign creditors.

The party also restated its commitment to nationalise the country's
banks and pledged to freeze the privatisation programme, and reverse
legislation that imposed a 22 per cent cut in the minimum wage.

The re-run election was set after none of Greece's major parties was
able to form a government following the May 6 poll in which Syriza
harnessed public fury over the EU-IMF loan programme to garner 17 per
cent of the vote.

A Syriza government, Mr Stathakis told the FT, would honour all the
country's foreign debts – except those incurred to pay for German
military equipment, which have been the subject of various scandals.

"We are willing to make any agreement, any compromise, as long as it is
viable," he said.

Mr Tsipras, the party's 37-year-old leader, is trying to overcome doubts
that he can offer more than just defiance to angry voters and prove that
he can be trusted to govern. Syriza is often seen as an unwieldy
coalition of a dozen different leftist parties, with rival views and

Syriza's chief argument is that employment must be stabilised in order
to arrest a freefall that has seen the Greek economy shrink by nearly a
fifth in five years, making it ever-more difficult for the country to
repay its debts.

Greece needs some ?70bn-?80bn in near-term investment to restart the
economy, estimated Mr Stathakis, who authored a history of the US
Marshall Plan that helped to rebuild the country after the second world

Syriza's promises to protect employment have run into scepticism among
many voters and economists who say it is merely offering a return to the
clientelist policies that swelled the ranks of Greece's public workers
and piled up debt.

Antonis Samaras, the New Democracy leader, has promised to seek
amendments to the loan agreement, although he has presented himself as a
more credible negotiating partner than Mr Tsipras, who has made taunting
Angela Merkel, German chancellor, and Christine Lagarde, IMF managing
director, a staple of his campaign.

In terms of generating revenue, Mr Stathakis dismissed a privatisation
programme prescribed by the IMF as wildly unrealistic.

Instead, Syriza aims to replenish government coffers by increasing taxes
on the wealthy – something that is sure to provoke opposition. The top
rate, according to its plan, would reach 45 per cent, although the party
wants to lower the value-added tax, which disproportionately hits the poor.

Mr Stathakis said Syriza would seek to bring Greece's powerful shipping
industry into the tax system – something that a succession of Greek
governments has tried and failed to do in the past. The rates, he
promised, would be modest.

"They have to contribute a small share … like every other Greek," Mr
Stathakis said.

Copyright The Financial Times Limited 2012

Posted on www.ft.com on June 1, 2012 4:48 pm

(4) Banks and Governments are painted as the villains. But what about

ERA <hermann@chariot.net.au> 28 May 2012 10:54

Source: posted In: {Steve Keen's} Debtwatch

Time to stop rewarding economists for bad behaviour

by Philip Soos

Relayed by David Lawson on May 27th, 2012

Source: The Conversation


{photo} In times of financial collapses, banks and governments are
painted as the villains. But what about economists?
~ dgies
{end photo}

Since the beginning of the global financial crises in 2007, there have
occurred numerous economic and financial crises around the globe,
plunging often prosperous nations into hardship and even near
bankruptcy. These crises, typically generated by overlending by the
financial sector and crashing housing bubbles, are often blamed upon two
parties – governments and banks – with considerable justification.

There is, however, a third villain that bears primary responsibility for
these disasters. While politicians, government bureaucrats, financiers,
bankers and the real estate lobby have come under withering assault in
the eyes of enraged publics, the economics profession has largely
escaped the fury. Given the importance of this profession in structuring
economic and financial policy, the lack of attention and accountability
poses an interesting question as to why this is.

Governments rely upon the advice of economists to implement policies
that will advance economies in the conventional terms of growth,
stability and productivity, on matters from the important to the
mundane. It is these experts, with a wealth of experience, who have the
greatest influence on public policy.

It should be predictable that if a particular policy was successfully
implemented and incurred the expected outcomes, then the economists in
charge will have their careers advanced. If the opposite occurs, then it
is expected that the economists responsible should be subject to severe

Unfortunately, recent outcomes have ensured the former, but not the
latter. For instance, the largest bubbles in US history – dot-com and
housing – were followed by sharp economic downturns. Both times, the
overwhelming majority of economists missed and/or denied the existence
of the bubbles.

The aftermath of the tech bubble was a recession, and the collapse of
the housing bubble could well have resulted in another Great Depression
if not for the record-breaking bailout of the financial system and
continued deficit spending.

According to conventional economic theory that the majority of
economists advocate (neoclassical economics), these assets bubbles
should not be forming. Supposedly, the more market-oriented an economy
becomes, through deregulation and privatisation, the more efficient it
becomes at pricing assets, resources, goods, services and labor. Thus,
there should be little to no bubble activity within a freer market
economy. History, however, has revealed the opposite.

One would think that given the wide gulf between theory and reality, the
economics profession should have performed some sort of self-assessment.
Instead, they seem to have fervently congratulated one another for
having saved economies.

There is, of course, some truth to this assertion: economies would
likely have been worse off had the government not intervened and allowed
the banks to collapse. Clearly, this is not the point being made – the
point is that if economists were not asleep at the wheel, economies
would not have been driven into a brick wall, requiring bailouts in the
first place.

It is outrageous those economists in important policy-making and
influential positions even keep their jobs. What comprises these
positions is obvious: senior economists within the central bank,
treasury, the financial regulator, commercial lenders, investment banks,
and supranational organizations.

If a taxi driver was to crash while drunk driving, injuring passengers,
they would be fired and can be charged by the authorities. A nurse that
continually gives patients the wrong medicines, resulting in suffering
or even death, will lose their job in short order. A cook that leaves
the stove on after finishing work, burning down the restaurant, will
predictably lose their job.

On the other hand, economists who are complicit in the collapse of
multi-billion dollar corporations and trillion-dollar economies are
still employed, often working in the highest levels of government,
industry and academia, while unemployment, bankruptcies, and general
misery blows out of all proportion among the public.

Given the extraordinary level of incompetence shown by these economists,
one may ask why they are still employed. Surely the economics profession
should be treated similarly to other professions: incompetence on the
job should result in disciplinary measures and penalties.

One explanation can be found within economic theory itself. Economists
believe that the prices of goods and services within an economy are
determined by the impersonal forces of supply and demand; everything,
that is, except for the supply and demand of economic theory itself.

The rich and powerful create strong demand for economic ideology that
justifies their wealth and power. Thus, those economists who supply such
ideology will be rewarded regardless of performance. This observation
goes unheeded among economists for obvious reasons.

Another explanation is what has been satirically called "academic choice
theory", a play upon public choice theory that argues politicians will
follow specific behaviors to maximise their own economic benefits.

Thus, wealth-maximising economists will serve monied interests in order
to enrich themselves, regardless of the effects upon others. Within
modern economies, the wealthy are increasingly invested in the financial
rather than industrial sectors. Accordingly, economists seek to work at
the behest of financial institutions: commercial lenders, investment
banks, hedge funds, money management funds, etc. The owners and managers
of these institutions, dedicated to maximising short-term profit and
power, naturally seek that economists advocate theories and policies
that empower them economically and politically.

Within the economics field, there exists a substantial literature on the
capture of institutions: for instance, government capturing producers,
or industry capturing government regulators, for the purpose of
empowering the institutions performing the capturing. Less well-known is
the capture of the economics profession, whether it is individual
economists or entire schools and departments at universities.

Universities are often dependent on outside funding to keep their
economics and business schools functioning. Corporate-friendly
businesses, think-tanks and wealthy individuals will meet this need and
provided the necessary funding. Although there may be no strings
attached legally, the entire funding is an enormous string in itself.
Crafting theories and policies that run counter to what the funders want
to hear will not ingratiate them to the recipients.

The phrase "don't bite the hand that feeds you" is rather apt to this
situation. The course of action to pursue, therefore, is to speak the
words pleasing to the funders, which often means pro-corporate theories
and policies.

Economic policy tends to run in a similar fashion, with a clique of
leading economic thinkers chosen to reform policy in accordance with
best practice – or so we are told. For those less burdened with such
delusions, best practice means not what is in the best interests of the
public, but rather what benefits the narrow sectors of concentrated
private wealth and privilege that huddle behind the conservative nanny
state, including the economists who are devising these policies.

As history has shown, these policies, primarily financialisation of the
economy, have greatly harmed the public while enriching the fortunate
few beyond avarice.

There is no natural law that says that the economic equivalents of
Doctor Death should continue to devise policies that have shown to be
detrimental. If other professions can be held accountable for poor job
performance, why not economists?

Economists are fond of examining the role of incentives. Providing a set
of penalties in the form of fines, loss of employment, and even
imprisonment in the worst cases of financial and economic crisis, can
provide economists the incentive to advocate policies based upon
scientific theory of how the economy does function in the real world,
rather than how it ought to work in a textbook.

(5) Cooperative Banking: move your money out of the big banks - Ellen Brown

From: Ellen Brown <ellenbrown33@gmail.com> Date: 25 May 2012 13:25


Cooperative Banking, the Exciting Wave of the Future Thursday, 24 May
2012 13:11

By Ellen Brown, AlterNet | Report

As our political system sputters, a wave of innovative thinking and bold
experimentation is quietly sweeping away outmoded economic models. In
'New Economic Visions', a special five-part AlterNet series edited by
Economics Editor Lynn Parramore in partnership with political economist
Gar Alperovitz of the Democracy Collaborative, creative thinkers come
together to explore the exciting ideas and projects that are shaping the
philosophical and political vision of the movement that could take our
economy back.

According to both the Mayan and Hindu calendars, 2012 (or something very
close) marks the transition from an age of darkness, violence and greed
to one of enlightenment, justice and peace. It's hard to see that change
just yet in the events relayed in the major media, but a shift does seem
to be happening behind the scenes; and this is particularly true in the
once-boring world of banking.

In the dark age of Kali Yuga, money rules; and it is through banks that
the moneyed interests have gotten their power. Banking in an age of
greed is fraught with usury, fraud and gaming the system for private
ends. But there is another way to do banking; the neighborly approach of
George Bailey in the classic movie It's a Wonderful Life. Rather than
feeding off the community, banking can feed the community and the local

Today, the massive too-big-to-fail banks are hardly doing George
Bailey-style loans at all. They are not interested in community lending.
They are doing their own proprietary trading—trading for their own
accounts—which generally means speculating against local interests. They
engage in high-frequency program trading that creams profits off the
top-of-stock market trades; speculation in commodities that drives up
commodity prices; leveraged buyouts with borrowed money that can result
in mass layoffs and factory closures; and investment in foreign
companies that compete against our local companies.

We can't do much to stop them. They've got the power, especially at the
federal level. But we can quietly set up an alternative model, and
that's what is happening on various local fronts.

Most visible are the Move Your Money and Occupy Wall Street movements.
According to the Web site of the Move Your Money campaign, an estimated
10 million accounts have left the largest banks since 2010. Credit
unions have enjoyed a surge in business as a result. The Credit Union
National Association reported that in 2012, for the first time ever,
credit union assets rose above $1 trillion. Credit unions are
non-profit, community-minded organizations with fewer fees and less fine
print than the big risk-taking banks, and their patrons are not just
customers but owners, sharing partnership in a cooperative business.

Move "Our" Money: The Public Bank Movement

The Move Your Money campaign has been wildly successful in mobilizing
people and raising awareness of the issues, but it has not made much of
a dent in the reserves of Wall Street banks, which already had $1.6
trillion sitting in reserve accounts as a result of the Fed's second
round of quantitative easing in 2010. What might make a louder statement
would be for local governments to divest their funds from Wall Street,
and some local governments are now doing this. Local governments
collectively have well over a trillion dollars deposited in Wall Street

A major problem with the divestment process is finding local banks large
enough to take the deposits. One proposed solution is for states,
counties and cities to establish their own banks, capitalized with their
own rainy day funds and funded with their own revenues as a deposit base.

Today only one state actually does this: North Dakota. North Dakota is
also the only state to have escaped the credit crisis of 2008, sporting
a sizeable budget surplus every year since. It has the lowest
unemployment rate in the country, the lowest default rate on credit card
debt, and no state government debt at all. The Bank of North Dakota
(BND) has an excellent credit rating and returns a hefty dividend to the
state every year.

The BND model hasn't yet been duplicated in other states, but a movement
is afoot. Since 2010, 18 states have introduced legislation of one sort
or another for a state-owned bank.

Values-Based Banking: Too Sustainable to Fail

Meanwhile, there is a strong movement at the local level for
sustainable, "values-based" banking—conventional banks committed to
responsible lending and service to the local community. These are George
Bailey-style banks, which base their decisions first and foremost on the
needs of people and the environment.

One of the leaders internationally is Triodos Bank, which has local
offices in the Netherlands, Belgium, the United Kingdom, Spain, and
Germany. Its Web site says that it makes socially responsible
investments that are selected according to strict sustainability
criteria and overseen by an international panel of "stakeholder"
representatives representing various community, environmental, and
worker interest groups. Investments include the financing of more than
1,000 organic and sustainable food production projects, more than 300
renewable energy projects, 33 fair trade agricultural exporters in 22
different countries, 85 microfinance institutions in 43 countries, and
398 cultural and arts projects.

Two U.S. banks exemplifying the model are One PacificCoast Bank and New
Resource Bank. Operating in California, Oregon and Washington, One
PacificCoast is comprised of a sustainable community development bank
with around $300 million in assets and a non-profit foundation (One
PacificCoast Foundation). Its commercial lending business focuses on
such sectors as specialty agriculture, renewable energy, green building,
and low-income housing. Foundation activities include programs to "help
eliminate discrimination, encourage affordable housing, alleviate
economic distress, stimulate community development and increase
financial literacy."

New Resource Bank is a California based B-corporation ("Benefit") with
$171 million in assets, which focuses its lending and banking services
on local green and sustainable businesses. New Resource was recognized
in 2012 as one of the "Best for the World" businesses, being in the top
10 percent of all certified B-Corporations and scoring more than 50
percent higher than 2,000 other sustainable businesses in overall
positive social and environmental impact.

All this might be good for the world, but isn't investing locally in a
values-based bank riskier and less profitable than putting your money on
Wall Street? Not according to a study commissioned by the Global
Alliance for Banking on Values (GABV). The 2012 study compared the
financial profiles between 2007 and 2010 of 17 values-based banks with
27 Globally Systemically Important Financial Institutions
(GSIFIs)—basically the too-big-to-fail banks, including Bank of America,
JPMorgan, Barclays, Citicorp and Deutsche Bank. According to the GABV
report, values-based banks delivered higher financial returns than some
of the world's largest financial institutions, with a return on assets
averaging above 0.50 percent, compared to just 0.33 percent for the
GSIFIs; and returns on equity averaging 7.1 percent, compared to 6.6
percent for the GSIFIs. They appeared to be stronger financially, with
both higher levels of and better quality capital; and they were twice as
likely to invest their assets in loans.


Along with the values-based banks, community investment is undertaken in
the United States by Community Development Financial Institutions
(CDFIs), including community development banks, community development
credit unions, community development loan funds, community development
venture capital funds, and microenterprise loan funds. According to the
CDFI Coalition, there are over 800 CDFIs certified by the CDFI Fund,
operating in every state in the nation and the District of Columbia. In
2008 (the last year for which a report is available), CDFIs invested
$5.53 billion "to create economic opportunity in the form of new jobs,
affordable housing units, community facilities, and financial services
for low-income citizens."

Two of many interesting examples are the Alternatives Federal Credit
Union and Boston Community Capital. Alternatives FCU, located in Ithaca,
New York, is committed to community development and social change and is
part of the Alternatives Group, which includes a non-profit corporation
(Alternatives Community Ventures); a 40-year old trade association of
community groups, cooperatives, worker-owned businesses and individuals
(Alternatives Fund); and a not-for-profit organization that facilitates
secondary capital investment in the credit union (Tomkins County Friends
of Alternatives, Inc.). The credit union has over $70 million in assets
and offers many innovative financial products, including individual
development accounts—special savings accounts for low-income residents
that offer matching deposits of two to one up to a certain amount—in
addition to more traditional services such as loans for minority and
women-owned businesses, and affordable mortgages. The credit union also
offers small business development (classes, seminars, consultation, and
networking programs), free tax preparation, and a student credit union.

Although its lending programs focus on lower-income borrowers,
Alternatives FCU has had lower delinquency and charge-off rates than
many major banks that avoid these types of customers. Boston Community
Capital (BCC) is a CDFI that is not actually a bank but invests in
projects that provide affordable housing and jobs in lower-income
neighborhoods. BCC includes a loan fund, a venture fund, a mortgage
lender, a real estate consultation organization, a solar energy fund,
and a federal New Markets Tax Credit investment vehicle. Since 1985, it
has invested over $700 million in local organizations and businesses.
These funds have helped build or preserve more than 12,800 affordable
housing units, as well as child care facilities for almost 9,000
children and healthcare facilities that reach 56,000 people. Their
investments have helped renovate 850,000 square feet of commercial real
estate, generate 5.9 million KW hours of solar energy capacity, and
create more than 1,500 jobs.

Less Money for Banks and More for Workers: The Models of Germany and Japan

Values-based banks and CDFIs are a move in the right direction, but
their market share in the U.S. remains small. To see the possibilities
of a banking system with a mandate to serve the public, we need to look

Germany and Japan are export powerhouses, in second and third place
globally for net exports. (The U.S. trails at 192nd.) One competitive
advantage for both of these countries is that their companies have ready
access to low-cost funding from cooperatively owned banks.

In Germany, about half the total assets of the banking system are in the
public sector, while another substantial chunk is in cooperative savings
banks. Germany's strong public banking system includes 11 regional
public banks (Landesbanken) and thousands of municipally owned savings
banks (Sparkassen). After the Second World War, it was the publicly
owned Landesbanks that helped family-run provincial companies get a
foothold in world markets. The Landesbanks are key tools of German
industrial policy, specializing in loans to the Mittelstand, the
small-to-medium size businesses that drive the country's export engine.

Because of the Landesbanks, small firms in Germany have as much access
to capital as large firms. Workers in the small business sector earn the
same wages as those in big corporations, have the same skills and
training, and are just as productive. In January 2011, the net value of
Germany's exports over its imports was 7 percent of GDP, the highest of
any nation. But it hasn't had to outsource its labor force to get that
result. The average hourly compensation (wages plus benefits) of German
manufacturing workers is $48—a full 50 percent more than the $32 hourly
average for their American counterparts.

In Japan, the banks are principally owned not by shareholders but by
other companies in the same keiretsu or industrial group, in a circular
arrangement in which the companies basically own each other. Even when
there are nominal outside owners, corporations are managed so that the
bulk of the wealth generated by the corporation flows either to the
workers as income or to investment in the company, making the workers
and the company the beneficial owners.

Since the 1980s, U.S. companies have focused on maximizing short-term
profits at the expense of workers and longer-term goals. This trend
stems in part from the fact that they are now funded largely by capital
from shareholders who own the company and want simply to grow their
returns. According to a 2005 report from the Center for European Policy
Studies in Brussels, equity financing is more than twice as important in
the U.S. as in Europe, accounting for 116 percent of GDP compared with
62 percent in Japan and 54 percent in the eurozone countries. In both
Europe and Japan, the majority of corporate funding comes not from
investors but from borrowing, either from banks or from the bond market.

Funding with low-interest loans from cooperatively owned banks leaves
greater control of the company in the hands of employees who either own
it or have much more say in its operation. Access to low-interest loans
can also slash production costs. According to German researcher Margrit
Kennedy, when interest charges are added up at every level of
production, 40 percent of the cost of goods, on average, comes from

Globally, the burgeoning movement for local, cooperatively owned and
community-oriented banks is blazing the trail toward a new, sustainable
form of banking. The results may not yet qualify as the Golden Age
prophesied by Hindu cosmology, but they are a major step in that direction.

Ellen H Brown <ellenbrownjd@gmail.com> 21 May 2012 07:58

(6) Take back the "money power": The Revolution will Not be Televised -
Ellen Brown


Published on Sunday, May 20, 2012 by Common Dreams

The Revolution Will Not Be Televised: Quiet Drama in Philadelphia

by Ellen Brown

"You will not be able to plug in, turn on and cop out.
You will not be able to skip out for beer during commercials,
Because the revolution will not be televised. . . .
The revolution will be live."
--From the 1970 hit song by Gil Scott-Heron

Last week, the city of Philadelphia's school system announced that it
expects to close 40 public schools next year, and 64 schools by 2017.
The school district expects to lose 40% of its current enrollment, and
thousands of experienced, qualified teachers.

But corporate media in other cities made no mention of these massive
school closings -- nor of those in Chicago, Atlanta, or New York City.
Even in the Philadelphia media, the voices of the parents, students and
teachers who will suffer were omitted from most accounts.

It's all about balancing the budgets of cities that have lost revenues
from the economic downturn. Supposedly, there is simply no money for the
luxury of providing an education for the people.

Where will those children find an education? Where will the teachers
find work? Almost certainly in an explosion of private sector "charter
schools," where the quality of education -- from the curriculum to books
to the food served at lunch -- will be sacrificed to the lowest bidder,
and teachers' salaries and benefits will be sacrificed to the profits of
the new private owners, who will also eat up many millions of dollars of
taxpayer subsidies.

Why does there always seem to be enough money for military expansion,
prisons, bank bailouts and tax cuts for the wealthy, but not enough for
education—or for jobs, housing, healthcare, or old age pensions? These
are not "welfare" but are part of the social contract for which we pay
taxes and make social security payments.

In an article reprinted on Truthout on May 10th titled "Why Isn't
Closing 40 Philadelphia Public Schools National News?," Bruce Dixon
posed this answer:

The city has a lot of poor and black children. Our ruling classes don't
want to invest in educating these young people, preferring instead to
track into lifetimes of insecure, low-wage labor and/or prison. Our
elites don't need a populace educated in critical thinking. So low-cost
holding tanks that deliver standardized lessons and tests, via computer
if possible, operated by profit-making "educational entrepreneurs" are
the way to go.

"Lifetimes of insecure, low-wage labor or prison"—this is very close to
the "indentured servitude" that was abolished along with slavery by the
13th Amendment to the Constitution, ratified in 1865. The freed slaves
are being recaptured by debt, beginning with the debt of school loans,
followed by credit card debt, mortgage debt, and healthcare costs.

As was cynically observed in a document called the Hazard Circular,
allegedly circulated by British banking interests among their American
banking counterparts in July 1862:

[S]lavery is but the owning of labor and carries with it the care of the
laborers, while the European plan, led by England, is that capital shall
control labor by controlling wages. This can be done by controlling the
money. The great debt that capitalists will see to it is made out of the
war, must be used as a means to control the volume of money. . . . It
will not do to allow the greenback, as it is called, to circulate as
money any length of time, as we cannot control that. [Quoted in Charles
Lindburgh, Banking and Currency and the Money Trust (Washington D.C.:
National Capital Press, 1913), page 102.]

The quotation may be apocryphal, but it graphically conveys the fate of
our burgeoning indentured class. It also suggests the way out: we must
recapture the control of our money and banking systems, including the
issuance of debt-free money ("greenbacks") by the government.

Meanwhile, in Other Unreported News . . .

That alternative vision was put before a conference in Philadelphia in
late April that drew delegates from all over the United States. The
theme of the first Public Banking in America conference, held at the
Quaker Friends Center on April 28-29th, was that to fix the economy, we
first need to take back the "money power"—the power to create currency
and credit.

Led by keynote speakers Gar Alperovitz and Hazel Henderson and
highlighted in an electric speech by twelve-year-old Victoria Grant, the
conference was all about solutions. As summarized by OpEdNews editor
Josh Mitteldorf:

There were two visions expressed . . . . The first is the very practical
idea that states and cities around America could be rescued from
insolvency if they had their own banks, instead of relying on commercial
banks to borrow money through bonds. Tax-exempt bond issues supply money
to states and municipal governments typically at 5 or 6% interest, while
banks these days are able to borrow from the Fed at 1/4% per year.

The second vision is . . . the radically-subversive idea that the system
we have for introducing money into the economy is a boon for the banks,
but perhaps a major drag on our economy. Perhaps a simple, direct system
of money creation by the Treasury Dept instead of the Fed would put an
end to cycles of recession, and create a foundation for long-term

Banking is a huge leech on our economy. 40% of every dollar we spend on
goods and services -- 40% of all that we create and all we consume -- is
siphoned off the top as bank interest in one form or another.
(Calculations of Margrit Kennedy) The US Government is in the absurd
position of paying interest to a private bank for every dollar that is
put into circulation. The Federal Reserve system has privatized the
power to create money, which, according to the Constitution, ought to
belong to Congress alone. Presently, interest on the national debt costs
the Federal government $500 billion in 2011, and (because of structural
deficit spending) it is the fastest-growing portion of the Federal budget.

Five hundred billion dollars could be saved annually just by refinancing
the federal debt through our own central bank, interest-free. This is
not an off-the-wall idea but has actually been done, very successfully.
Among other instances, it was done in Canada from 1939 to 1974, as was
detailed by the youngest and oldest speakers at the conference,
12-year-old Victoria Grant and former defense minister Paul Hellyer,
founder of the Canadian Action Party. Another Canadian at the
conference, Toronto Councillor Kristyn Wong-Tam, has proposed that the
Toronto city council could improve its finances by forming its own bank.

The direct solution to the economic crisis, urged by veteran money
reformer Bill Still, would be for the federal government to simply
create the money it needs, as the American colonists did by printing
paper scrip and Abraham Lincoln did by printing greenbacks.

But cities and states don't need to wait for a deadlocked federal
Congress to act. As Wong-Tam has proposed for Toronto, they can divest
their public revenues from the too-big-to-fail banks and put them in
their own publicly-owned banks. These banks could then do what all banks
do: leverage capital, backed by deposits, into money in the form of bank

This newly-created bank money would then be available for the use of the
local government interest-free (since the government would own the bank
and would get the interest back as dividends). Among other
possibilities, the money could be used to restore the schools. This
would not be an expenditure but an investment, as illustrated by the
G.I. Bill, which provided education and low-interest loans for returning
servicemen after World War II. Economists have determined that for every
1944 dollar invested in the G.I. Bill, the country received
approximately $7 in return, through increased economic productivity,
consumer spending, and tax revenues.

Legislation for public banks has now been introduced in 18 U.S. states,
on the model of the highly successful Bank of North Dakota (BND).
Elaborated on at the Public Banking conference by Ed Sather and Rozanne
Junker, the BND is currently the country's only state-owned bank and has
been a major factor in allowing the state to escape the recent credit
crisis. North Dakota is the only state to boast a significant budget
surplus every year since the economic downturn of 2008.

Ellen Brown noted that 40% of banks globally are also publicly-owned.
These are largely in the BRIC countries (Brazil, Russia, India, and
China), which also escaped the credit crisis, largely because their
public banks did not rely on derivatives and, unlike private banks, lent
counter-cyclically to cushion their economies from the downturn.

Conference speaker Samuel Giles proposed that even public universities
could set up their own banks, which could then leverage university
monies for the university's own use, rather than giving those assets
away to Wall Street to be speculated with and lent back at much higher
interest rates.

Innovative Solutions for Pennsylvania

Speakers Michael Sauvante and Mike Krauss noted that efforts are
underway in several Pennsylvania and Ohio municipalities to create
public banks. One possibility is for public banks to take an aggressive
role in ending the foreclosure crisis by acquiring abandoned and
foreclosed homes by eminent domain. These homes could be added to the
asset base of the bank, which could extend credit to restore them and
then sell or rent them at reasonable rates.

Krauss noted that Philadelphia already has a strong effort underway to
create a "land bank"—a bank to acquire, rehabilitate and create
productive uses for the city's more than 40,000 vacant properties—and
legislation (HB 1682) has been introduced in the state legislature to
enable this effort. But the land bank proposed is not designed to
function as a depository bank that leverages funds into credit. Rather,
it would simply work with appropriated funds or bond revenue. This is a
positive step toward addressing a real need, but it could be enhanced by
turning the land bank into a public bank—a chartered bank having the
power to create money as credit on its books.

The efforts for developing public banks in Pennsylvania are being led by
the Pennsylvania Project, which was a co-sponsor of the Philadelphia
conference and is supported in its work by the Public Banking Institute
and the Center for State Innovation. The Pennsylvania Project is
creating partnerships with other Pennsylvania public policy
organizations to introduce legislation for a state Bank of Pennsylvania
in 2013, after elections are held and a strong foundation of support has
been laid.

Revolution Without Bloodshed or War

We live under a tyranny today that is just as intolerable and unjust as
that in 1776, but violent revolution is no longer an option. Our
oppressors own the military and the media, and their FEMA camps are
waiting for us.

If change is to come, it must be peaceful and legal, beginning with a
revolution in the minds and hearts of the people. The message of the
Public Banking in America Conference was that we can throw off the yoke
of the financial elite by making money and credit a public utility; and
the most feasible place to start is at the local level, with
publicly-owned banks.

For videos of some of the speakers, see
http://www.publicbankinginamerica.org/speakers.htm. More to come. The
Victoria Grant video has gone viral, approaching half a million hits,
including copies.

(7) Petras: Latin American economies swap Self-Sufficiency for Resource
Exports (& reliance on Mining companies)

James Petras <jpetras@binghamton.edu> 3 May 2012 13:09

Extractive Capitalism and the Divisions in the Latin American
Progressive Camp

James Petras

May 2, 2012



The leading agro-mineral exporting countries, including those engaged
with the world's leading mining and energy multi-national
corporations(MNC) are also those characterized as having the most
independent and progressive foreign policies. Apparently the primacy of
"extractive capitalism" and commodity-export based economies are no
longer correlated with 'neo-colonial' regimes.

It can be argued that the concessions to the extractive MNC and local
'leading' classes assures stability, steady revenues and finances the
incremental social expenditures which permit the re-election of the
center-left regimes. In other words a de facto alliance between the
"top" and "bottom" of the class structure is the unstated bases for
center-left electoral successes despite the growing political divergence
between the regimes and sections of the social movements.

The Progressive Camp

There is a general consensus that regimes in seven countries in Latin
America form what can be called the "progressive camp": Bolivia,
Ecuador, Argentina, Brazil, Uruguay, Peru and Venezuela.

The identifying features usually attributable to regimes in these
countries include (1) their past political trajectory: most are led by
former leaders and activists from social movements, trade unions or
guerrilla formations (2) their relatively independent foreign policy
pronouncements especially regarding US intervention and sanctions
policies (3) their ideology rhetoric rejecting US led regional bodies
and favoring Latin American centered organizations (4) their populist
electoral campaign programs regarding social equity, environmentalism
and human rights (5) their vehement rejection of 'neo-liberalism' and
traditional neo-liberal personalities, parties and privatizations (6)
their strategic perspective that envisions a prolonged process of social
transformation that emphasizes an agenda featuring modernization,
developementalist priorities and high levels of investment oriented
toward global markets (7) their prolonged political incumbency based on
constitutional reforms permitting re-election justified by the need for
completing the transformative vision.

The progressive camp has a self-image, projected inward to its
electorate as representing a rupture or 'historical' break with the
past, first with regard to the traditional neo-liberal oligarchy and
secondly with the 'statist' left. In the case of Bolivia, Ecuador and
Venezuela they frequently resort to rhetoric evoking "21st century
socialism". The potency of the appeal to radical novelty has a limited
time span dependent on the degree to which the regimes pursue policies
in variance with the preceding neo-liberal regime.

The'Left-Right Division' as Represented by the Progressive Camp (PC)

The perceptions of the objective and subjective divergence between the
progressive camp and the right vary according to whether they emanate
from official sources or from a critical empirical investigation.

According to the ideologues of the "Progressive Camp" (PC) there are
at least five major policy areas which reflect the radical rupture with
the traditional neo-liberal right.

(1) Nationalism: (a) the PC through renegotiations of contracts with
extractive MNC secures a higher rate of taxation, increasing revenues
for the national treasury; (b) via increased state investment it
converts wholly owned private firms into public-private joint ventures;
(c) through increases in royalty payments it lessens 'foreign
exploitation'; (d) through the greater presence of 'local technocrats'
it increases national oversight of strategic economic decisions.

(2) Foreign Policy: The progressive camp has pursued an independent, if
not explicitly anti-imperialist foreign policy. The progressive camp has
established several Latin American and Caribbean regional organizations
which deliberately exclude the presence of North American and European
imperial countries such as ALBA (Bolivarian Alliance of the Americas)
and UNASUR (Union of South American Nations). The PC has rejected
sanctions against Cuba, Iran, Syria and Gaza and opposed the US backed
NATO war against Libya. They criticized the US position at the Summit of
the America's meeting in april 2012 on at least three major issues –
inclusion of Cuba, opposition to British colonial control of the
Malvinas and the de-penalization of drugs. The PC has expressed its
opposition to US hegemony, to IMF "structural reforms" and Euro-US
control over international lending institutions. With the exception of
Venezuela, the PC has diversified its export markets. For example Brazil
exports to the US only 12.5% of its goods and services; Argentina 6.9%
and Bolivia 8.2%.

(3) Social Policy: The PC has increased social expenditures, especially
toward reducing rural poverty; increased the minimum wage; approved
salary and wage increases. In a few countries they provide easy credit
and financing to small and medium businesses, have given legal title to
land squatters and distributed plots of uncultivated public lands as a
kind of 'agrarian reform'.

(4) Regulation: The PC has, with varying degree of consistency, imposed
controls over the financial sector, regulating the flow of speculative
capital and the volatility of financial markets. With regard to the
extractive sector regulations have been relaxed to permit the large
scale inflow of capital and the pervasive use of toxic chemicals and
genetically modified seeds by agro-business. They have permitted the
expansion of mining, agriculture and the timber industry into Indian and
natural reservations. They have financed large scale infrastructure
projects linking extractive enterprises to export outlets trespassing
onto previously regulated, protected natural habitats. Regulatory norms
have been harnessed to facilitate 'productive' extractive
developmentalism and to limit the financialization of the economy.

(5) Labor Policy: has been based on a 'corporatist model' of
business-state-trade union (tri partite) negotiations and conciliation
to limit lockouts and strikes and maintain growth, exports and revenue
flows. Labor policy has been conditioned by the policy of limiting
budget deficits, fixing wage increases, to the rate of inflation. In
line with orthodox fiscal policies, pensions for public sector workers
have been frozen or reduced especially among the middle and high end
functionaries. Traditional job security guarantees have been maintained
not augmented and severance pay has not been raised. Strikes by public
sector workers, especially among teachers, medical staff and social
service workers have been frequent and have led to government mediation
and marginal gains. Government policy has been oriented toward
protecting managerial prerogatives, while respecting and upholding the
legal status, collective bargaining rights of trade unions. Within
nationalized firms, state-appointed directors rule; there is no move
toward worker self-management or 'co-management'-except in limited cases
in Venezuela. The structure of labor relations follows the private
corporate hierarchical model Labor has, at best, an advisory role
regarding health and safety but no determining influences or investment
within this corporate framework. Pressure via strikes and protest by
trade unions have been necessary, frequently in alliance with community
groups, to rectify the most egregious corporate violations of health and
safety rules. While the progressive regimes publically eschew
neo-liberal "labor flexibility" policies they have done little to expand
and deepen labor prerogatives over the labor and productive process.

The principle difference in labor policy between the progressive regimes
and the traditional right is the 'open door' to labor leaders, their
willingness to mediate and grant incremental wage increases, especially
of the minimum wage and generally, the reduction of harsh, violent

Continuities and Similarities between Past Neoliberal and Contemporary
Progressive Regimes

Writers, academics and journalists on the Right and Center-left
emphasize the difference between the progressive and the past
neo-liberal regimes, overlooking the large scale socio-economic and
political structural continuities. A more nuanced, balanced and
objective analysis requires that these continuities be taken into
account because they play a major role in discussing the limitations and
emerging conflicts and crises facing the progressive regimes. Moreover,
these limitations, based on the continuities, highlight the importance
of alternative development models proposed by popular social movements.

The agro-mineral export model has demonstrated profound strategic
deficiencies in its very structure and performance. The promotion of
agro-mineral exports has been accompanied by the large-scale, long-term
entrance of foreign capital which in turn determines the rates of
investment, the sources for inputs of machinery, technology and
'know-how', as well as control over the marketing and processing of raw
materials. The MNC "partners" of the progressive regimes have
conditioned their involvement on the bases of (a) the de-regulation of
environmental controls; (b) the termination of price controls and the
introduction of "international prices" for sales to the domestic market;
(c) freedom to control foreign exchange earnings and to remit profits

They also control decisions regarding the exploitation of mineral
reserves. Expansion of production is dependent on their own global
criteria rather on the needs of the 'host' country. As a result, despite
the "re-negotiated" contracts, which the progressive regimes hail as a
"giant advance" toward "nationalization", the cumulative losses in
revenues and in rebalancing the economy are substantial. If one looks
beyond the agro-mineral enclave the negative impact to further
development are substantial. The very limited impact that the
agro-mineral model has on the economy as whole has led to occasional
conflicts between the MNC and the progressive host governments. A case
in point is the conflict between the nominally Spanish oil company
Repsol and the Argentine government of Cristina Fernandez in April 2012.
Repsol's behavior illustrates all the pitfalls of collaboration with
foreign overseas extractive corporations. Repsol refused to increase
investments, claiming that local regulated prices reduced profit
margins. As a result Argentina's energy bill rose three-fold between
2010 and 2011 from $3 billion to $9 billion. Furthermore, Repsol
repatriated its profits, paid high dividends to overseas stockholders
and thus had little impact in creating domestic industries producing
inputs or refineries to process petroleum. The attempt by the deceased
President Kirchner to increase 'national ownership' by bringing in a
local private capitalist, (the Peterson Group) had no positive impact,
merely entrenching Repsol's control. When Fernandez took majority shares
in order establish public control and increase local production, the
entire Eurozone leadership led by the Spanish government and the Western
financial press launched a virulent campaign, threatened litigation and
predicted economic disaster. The problem of 'inviting' foreign MNCs to
invest is that it is hard to disinvite them. Once they enter a country
no matter how unfavorable their performance, it is difficult to rectify
or undo the damage and move onto a new public centered model of development.

All the progressive regimes with the possible exception of Venezuela
have signed long-term large-scale contracts with major foreign
extractive multi-nationals. Apart from the increase in royalties these
agreements do not differ greatly from contracts signed by preceding
right-wing neo-liberal regimes.

Evo Morales signed a large scale exploitation contract with Jindal,
and Indian multi-national to exploit the iron-mine Mutun with virtually
all inputs - machinery, transport, etc. – imported and with very limited
'industrializing' of the raw iron ore – mostly simple iron 'nuggets'.
The bulk of Bolivia's gas and oil is exploited by foreign MNC-public
'joint ventures' and is shipped abroad, leaving most of the 60% rural
households without piped gas,and resulting in Bolivia's importing most
of its diesel.

Ecuador under President Correa, another leading progressive president,
signed two big contracts with foreign oil groups in February 2012,
despite the opposition of the majority of Indian organizations including
CONAI. In Ecuador, as in Bolivia, big oil and gas companies, while
raising objections to the re-negotiations of contracts leading to an
increase in royalty payments and an increased presence of public
officials, retain a privileged position in crucial decisions regarding
management, marketing, technology and investment. Despite claims to the
contrary, the leaders of the progressive regimes sign off on these
strategic agreements without consulting the communities affected.
Decisions are based exclusively on executive privilege. The style and
substance of the distribution of the powers and privileges in the oil
and gas agreements between the progressive governments and the
multi-nationals are no different than what transpired under previous
'neo-liberal' regimes. Moreover, in both Ecuador and Bolivia many of the
"technocrats" and administrators who worked under the previous
neoliberal regimes play a prominent role in running the joint venture.

While progressive regimes have pursued anti-poverty programs and have
registered some successes in reducing poverty levels, they do so as a
result of the growth of the economy not via the redistribution of
wealth. In fact the progressive regimes have not pursued redistributive
polices: income and land concentrations, including high levels of
inequality remain intact. In fact the hierarchy of the class structure
has not been altered and in most cases has been reinforced by the
inclusion of new entrants into the upper and middle class. These include
many former leaders and activists from the lower middle and working
class who have entered the government as well as 'new capitalists'
benefiting from state contract agreements with the progressive regime.

The financial system has remained intact and prospered under the
progressive regimes, especially because of the regimes tight fiscal
policies, build-up foreign reserves, control over government spending
and low rates of inflation. Financial sector profits are especially high
in Brazil, Uruguay, Peru, Bolivia and Ecuador. Brazil in particular has
attracted large inflows of speculative capital from Wall Streets and the
City of London because of its high interest rates relative to the rates
in North America and Europe.

Alongside the concentration of ownership in the extractive and
financial sector, the progressive regimes have not introduced
progressive taxes to reduce the disparities of wealth. The income of the
agro-business elites in Bolivia, Argentina, Uruguay, Brazil and Ecuador
are several hundred times that of the bulk of subsistence farmers,
peasants and rural laborers. Many of latter remain subject to brutal
working and living conditions. In many cases the progressive regimes
have done little to enforce the labor and health codes in the giant
agro-business plantations while workers are subject to unregulated toxic
chemical sprays.

If the configuration of ownership and wealth remains relatively
unchanged from the neo-liberal past, the progressive governments have
accentuated the tendencies toward export specialization. Under the
progressive governments the economies have become less diversified and
more dependent on agro-mineral and energy exports, and more dependent on
large scale long term foreign investments for growth. State revenue and
growth are more dependent on primary product exports.

The free market policies of the progressive agro-mineral export
regimes have stimulated the growth of large scale commercial activity.
The commercial sector is increasingly influenced by the large scale
entrance of foreign owned multi-nationals, like Wal-Mart, who source
their products overseas, undermining local small scale producers and

The appreciation of the currency has adversely affected traditional
manufacturers and the transport industry causing significant job losses
especially in textiles, footwear and automobiles in Brazil, Bolivia,
Peru and Ecuador. Moreover, favorable polices promoting large scale
agro-mineral exporters has been accompanied by a credit squeeze on local
small business people, especially, producers for local markets who have
been bit hard by the import of cheap consumer goods (from Asia). Farmers
producing food for local markets have been downgraded in the drive to
expand cultivation of export crops like soya.

In summary, the progressive regimes have pursued a multi-faceted
double discourse: an anti-imperialist, nationalist and populist rhetoric
for domestic consumption while putting into practice a policy of
fomenting and expanding the role of foreign extractive capital in joint
ventures with the state and a rising new national bourgeoisie. The
progressive regimes articulate a narrative of socialism and
participatory democracy but in practice pursue policies linking
development with the concentration and centralization of capital and
executive power.

The progressive regimes preach a doctrine of social justice and equity
and a practice of co-optation of social leaders and clientalism via
poverty programs for the poorest sectors of society.

The progressive regimes have combined incremented income policies with
large scale structural changes, benefiting the extractive-primary
sector. Stability of the PC is utterly dependent on the increasing
demand for raw materials, high commodity prices and open markets. The
progressive regimes have successfully linked trade union and sectors of
the peasant movement to the state and have undermined or weakened
independent class organizations and replaced them with corporate
tri-partite structures.

The progressives have successfully 'reformed' or replaced the chaotic,
de-regulated, conflictual, racialist policies of their predecessors and
institutionalized "normal capitalism". They have introduced rules and
procedures favorable to institutional stability, fiscal discipline and
incremental but unequal gains. In other words the "parameters of
neo-liberalism" are now effectively administered and legitimated by faux
nationalism based on greater political autonomy and market
diversification. Centralized executive decision making based on
agreements which require extractive MNC to invest and develop the forces
of production is legitimated by an electoral framework and a multi-class
political coalition.

The domestic and foreign policies of the progressive extractive
regimes reflect two contradictory experiences: their radical origins in
the lead-up to taking power and their subsequent adoption of an
agro-mineral developementalist export strategy, favored by neo-liberal
technocrats. ...

Divisions between the Progressive Regimes and the Social Movements

Prior to coming to power via electoral processes, the progressive
leaders maintained close ties and actively supported and participated in
the 'street action' and mass struggle of the social movements. They
embraced the banners of economic nationalism, ecological conservation
and respect for the natural reserves of the Indian communities, social
equality and reconsideration of the foreign debt including the
repudiation of 'illegal debts'.

The social movements played a major role in politicizing and
mobilizing the working and peasant classes to elect the progressive
Presidents. This convergence was short-lived. Once in power the
progressive regime appointed orthodox economic ministers to run the
economy.They adopted the extractive strategy, shifted from a nationalist
public sector economy , designed to diversify the economy, to a 'mixed
economy' based on joint ventures with overseas extractive capital. First
the Indian communities of Peru, Ecuador and some sectors in Bolivia went
into opposition, on the bases that their interests were neglected and
they were not consulted. Secondly sectors of the working class and
public employees struck demanding higher salaries, an increase in public
spending .Small farmers and manufacturers demanded economic stimulus for
family farms and local industry rather than subsidies for agro-mineral
MNC, fiscal orthodoxy and export strategies based on lower labor costs
and neglect of the domestic market.

Radical trade union peasant and Indian leaders of the social movements
called into question the entire agro-mineral extractive strategy, the
distribution and administration of state revenues and expenditures. They
reasserted their support for a social program embracing agrarian reform,
including the expropriation of large plantations and the redistribution
of land to landless peasants. Workers' leaders called for an industrial
policy to process 'raw materials' in order to create manufacturing jobs.
Some trade unionists called for the nationalization of strategic
industries and banks. However, despite some major protests, the bulk of
the followers of the social movements and the majority of their leaders
soon shifted from radical rejection of the extractive model to demands
for a bigger share of the revenues. ...

In summary it is difficult to generalize about the performance of the
progressive camp given the divergences in social and economic policies.
But a "report card" of sorts can be drawn up.

All regimes have lowered poverty levels and increased dependence on
agro-mineral exports and investments. All have signed and/or
renegotiated contracts with extractive MNC' few have diversified their
economies. Those with a substantial industrial base (Argentina, Brazil,
Peru) have suffered a severe decline in the manufacturing sector because
of appreciating currencies and loss of competitiveness resulting from
high prices for commodity exports. Incremental wage agreements have led
to low level social conflicts in the cities (except in Bolivia) but
displacement of peasants and degradation have intensified conflicts in
the interior between rural communities and the MNC leading to state
repression (Peru). ...

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