Obama's key decision
Anyone with an ounce of humanity or progressive spirit will be lifted by the election of Barack Obama as president of the United States. For the majority of the world's population it will be something far more than that. Anyone who has studied the history of racism in the US knows that for a black person to become president, to assume the most powerful job in the world, is truly an historic moment which it is very difficult to overestimate.
But Barack Obama is also being handed a poisoned chalice - although, perhaps, only in a moment of such turmoil could such an historic shift take place. Obama will inherit the worst financial crisis in the US for eighty years. This crisis is ultimately due to the fact that, due to decades of underinvestment in its domestic economy, the US is simply not competitive at anything like approaching the current exchange rate of the dollar.
For almost thirty years US presidents have attempted to overcome the consequences of this through using the military and political might of the US, which is very real, to substitute for an economy which, except in certain areas of high tech, simply cannot compete. Invading Iraq to seize oil, putting the squeeze on Japan to prop up the dollar at the expense of nearly two decades of Japanese economic stagnation, these were the types of methods used by US presidents to try to avoid the consequences of US economic decline.
Not merely did such methods not work, the economy proved in the long run more powerful as a factor than politics, but they led their country to military and financial catastrophe. George W Bush will be remembered as one of the worst of all US president's for having led his country both to a military debacle in Iraq and then financial disaster in the credit crisis. The neo-con agenda failed at each crucial point.
The only conclusion that can be drawn is that the US must withdraw from these disastrous policies to concentrate its resources on rebuilding its domestic economy. Pull out of Iraq, close the string of the US bases round the world, stop the reckless anti-ballistic missile programmes that destabilise Europe, spend all the resources released on rebuilding the US's infrastructure, improving its schools, and increasing its rate of investment.
If Barack Obama goes down that road he will be remembered not only as an historic president of the United States but as one the greatest presidents of the United States. If he does not follow it, if the continues with the policies of the last thirty years, even the gigantic goodwill he receives as president cannot solve the problems of the US. And that goodwill will dissipate while the racists will proclaim 'we told you so'.
Huge decisions await the new US president. Today every progressive spirit in the world will feel lifted. Very soon will come momentous decisions.
But Barack Obama is also being handed a poisoned chalice - although, perhaps, only in a moment of such turmoil could such an historic shift take place. Obama will inherit the worst financial crisis in the US for eighty years. This crisis is ultimately due to the fact that, due to decades of underinvestment in its domestic economy, the US is simply not competitive at anything like approaching the current exchange rate of the dollar.
For almost thirty years US presidents have attempted to overcome the consequences of this through using the military and political might of the US, which is very real, to substitute for an economy which, except in certain areas of high tech, simply cannot compete. Invading Iraq to seize oil, putting the squeeze on Japan to prop up the dollar at the expense of nearly two decades of Japanese economic stagnation, these were the types of methods used by US presidents to try to avoid the consequences of US economic decline.
Not merely did such methods not work, the economy proved in the long run more powerful as a factor than politics, but they led their country to military and financial catastrophe. George W Bush will be remembered as one of the worst of all US president's for having led his country both to a military debacle in Iraq and then financial disaster in the credit crisis. The neo-con agenda failed at each crucial point.
The only conclusion that can be drawn is that the US must withdraw from these disastrous policies to concentrate its resources on rebuilding its domestic economy. Pull out of Iraq, close the string of the US bases round the world, stop the reckless anti-ballistic missile programmes that destabilise Europe, spend all the resources released on rebuilding the US's infrastructure, improving its schools, and increasing its rate of investment.
If Barack Obama goes down that road he will be remembered not only as an historic president of the United States but as one the greatest presidents of the United States. If he does not follow it, if the continues with the policies of the last thirty years, even the gigantic goodwill he receives as president cannot solve the problems of the US. And that goodwill will dissipate while the racists will proclaim 'we told you so'.
Huge decisions await the new US president. Today every progressive spirit in the world will feel lifted. Very soon will come momentous decisions.
On 15 November a new era in world history begins - by John Ross
The following article is adapted from one that appeared on the blog Key Trends in Globalisation.
* * *
The theme of Key Trends in Globalisation is that 'It is an error to think globalisation is purely an economic process - it has deep social, cultural and environmental consequences.'
Nothing could illustrate this more than the meeting that will take place on 15 November in Washington to discuss the world financial crisis. The four most powerful people in the room, indeed the four most powerful people in the world, are illustrated above - Barack Obama - the next President of the United States, Hu Jintao - President of China, Manmohan Singh - Prime Minister of India and Taro Aso - Prime Minister of Japan.
Do you notice anything?
Not one of them is white.
It is economically, culturally, socially and ideologically a turning point in the history of the world. The end of the era which symbolically began on 12 October 1492 - the day Christopher Columbus arrived in the Caribbean.
For the next 500 years Europe spread through the world and conquered it. Its greatest offshoot, the United States, extended that European dominance for the 20th century. That Europe created, in racism, a uniquely evil ideology used to justify the greatest crimes in the history of the world - the Atlantic slave trade, the history of colonialism, the Holocaust.
Everyone understands the significance of the fact that for the first time in its history the United States will elect a black president. Everyone who is not a racist bigot in the world will rejoice. For black people it is an event the full significance of which no one who is white can understand. A liberatory moment in history to savour.
But even this president of the United States is not powerful enough to deal with the economic storm that is raging in the world. That is why the leaders of the 20 leading economies are being invited to Washington. It is the admission that the US no longer has the power to control the world. Without the help of others it cannot stablise even its own economy.
And who does the US have to invite? China, Japan, India. These are the three most powerful economic states outside the US - Europe has no comparable voice as long as it remains fragmented and none of the individual European states is an economic power to match the three big Asian economies. Whether Europe succeeds in getting itself together, or slides into further decline, remains to be seen.
On 15 November two great, and interlinked, processes will come together. The first black president of the United States will meet the leaders of the three great Asian states, who represent the future of the world economy. For the first time for 500 years there will not be one white person taking the most important decisions in the world.
Malcolm X once said: 'Time is on the side of the oppressed today, it's against the oppressor. Truth is on the side of the oppressed today, its against the oppressor. You don't need anything else.'
For 500 years the majority of humanity had to wait. It had to make do with truth not with power. But on 15 November the waiting ends.
It is only the meeting at the top. It will take decades, even centuries, for all the implications to work through and for the world to be equal at the bottom as well as the top. But nevertheless it is a momentous event - nothing will ever be the same again.
15 November literally marks the beginning of a new epoch in the history of the world.
Nothing could illustrate this more than the meeting that will take place on 15 November in Washington to discuss the world financial crisis. The four most powerful people in the room, indeed the four most powerful people in the world, are illustrated above - Barack Obama - the next President of the United States, Hu Jintao - President of China, Manmohan Singh - Prime Minister of India and Taro Aso - Prime Minister of Japan.
Do you notice anything?
Not one of them is white.
It is economically, culturally, socially and ideologically a turning point in the history of the world. The end of the era which symbolically began on 12 October 1492 - the day Christopher Columbus arrived in the Caribbean.
For the next 500 years Europe spread through the world and conquered it. Its greatest offshoot, the United States, extended that European dominance for the 20th century. That Europe created, in racism, a uniquely evil ideology used to justify the greatest crimes in the history of the world - the Atlantic slave trade, the history of colonialism, the Holocaust.
Everyone understands the significance of the fact that for the first time in its history the United States will elect a black president. Everyone who is not a racist bigot in the world will rejoice. For black people it is an event the full significance of which no one who is white can understand. A liberatory moment in history to savour.
But even this president of the United States is not powerful enough to deal with the economic storm that is raging in the world. That is why the leaders of the 20 leading economies are being invited to Washington. It is the admission that the US no longer has the power to control the world. Without the help of others it cannot stablise even its own economy.
And who does the US have to invite? China, Japan, India. These are the three most powerful economic states outside the US - Europe has no comparable voice as long as it remains fragmented and none of the individual European states is an economic power to match the three big Asian economies. Whether Europe succeeds in getting itself together, or slides into further decline, remains to be seen.
On 15 November two great, and interlinked, processes will come together. The first black president of the United States will meet the leaders of the three great Asian states, who represent the future of the world economy. For the first time for 500 years there will not be one white person taking the most important decisions in the world.
Malcolm X once said: 'Time is on the side of the oppressed today, it's against the oppressor. Truth is on the side of the oppressed today, its against the oppressor. You don't need anything else.'
For 500 years the majority of humanity had to wait. It had to make do with truth not with power. But on 15 November the waiting ends.
It is only the meeting at the top. It will take decades, even centuries, for all the implications to work through and for the world to be equal at the bottom as well as the top. But nevertheless it is a momentous event - nothing will ever be the same again.
15 November literally marks the beginning of a new epoch in the history of the world.
Socialist Economic Bulletin in Shanghai - Keynesianism Chinese style
Ken Livingstone has been invited by the government of Hong Kong to advise it on environmental policy and the Mayor of Shanghai to visit the city this weekend - hence the delays in posting on SEB.
The world economic situation seems very different from here. Hong Kong banks are concerned about the financial situation. But in Shanghai there is no concern about mainland China's banks, which had almost no exposure to the toxic derivative products which brought down Lehman Brothers, Bear Sterns and other US and European banks. The issue dominating discussion here is the effects on the real economy. The rapid turn down in the international economy can affect China's exports, as can the fact that China's currency is stable against the dollar when almost all other currencies are falling against it.
The solution is a specifically Chinese form of Keynesianism which can be used to boost the domestic economy. China is using classical Keynesian methods of reduction of interest rates and increased state spending. But it also has one very powerful tool not available in the US or Europe.
Due to the very large state company sector China can directly boost investment - it does not have to rely only on indirect methods. There is no risk, to use Keynes famous analogy, of the government merely 'pushing on a piece of string.' China, through its state owned company sector, has direct methods to avoid the decline in investment which is the driving force of a classic Western recession. Far from the state sector being a hindrance for the the economy it permits macro-economic regulation to take place far more strongly than in the US or Europe.
Chinese Keynesianism has far more powerful tools at its disposal than Keynesianism in the UK, US or Europe.
The world economic situation seems very different from here. Hong Kong banks are concerned about the financial situation. But in Shanghai there is no concern about mainland China's banks, which had almost no exposure to the toxic derivative products which brought down Lehman Brothers, Bear Sterns and other US and European banks. The issue dominating discussion here is the effects on the real economy. The rapid turn down in the international economy can affect China's exports, as can the fact that China's currency is stable against the dollar when almost all other currencies are falling against it.
The solution is a specifically Chinese form of Keynesianism which can be used to boost the domestic economy. China is using classical Keynesian methods of reduction of interest rates and increased state spending. But it also has one very powerful tool not available in the US or Europe.
Due to the very large state company sector China can directly boost investment - it does not have to rely only on indirect methods. There is no risk, to use Keynes famous analogy, of the government merely 'pushing on a piece of string.' China, through its state owned company sector, has direct methods to avoid the decline in investment which is the driving force of a classic Western recession. Far from the state sector being a hindrance for the the economy it permits macro-economic regulation to take place far more strongly than in the US or Europe.
Chinese Keynesianism has far more powerful tools at its disposal than Keynesianism in the UK, US or Europe.
There may be delays today
Dear readers,
Due to travel there may not be new posts on Socialist Economic Bulletin today. Normal service will resume tomorrow.
Due to travel there may not be new posts on Socialist Economic Bulletin today. Normal service will resume tomorrow.
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