Erle Frayne Argonza
Magandang hapon! Good afternoon!
2009 will be another bleak year economically, more so for the North (USA, EU, Japan are topmost). The recession that began with the subprime mortgage bubble burst in America in 07, will ensue with even mightier turbulence, as there are no coherent policy solutions of a strategic nature that can salve the economic ailment on a global scale.
As already articulated by this economist/analyst in various articles, the policy environment must be changed and regulatory mechanisms strengthened to immediately gain business confidence and reverse the tide of catastrophe. On the domestic front, the solution begins by following a New Deal type of policy set, which will bring back the fervor of production-driven growth and full employment. On the international/global front, a new financial architecture must be agreed upon via a global summit called for the purpose, akin to a New Bretton Woods.
The only intervention mechanisms we observe today are bailouts of failing financial and business institutions, which are toxically immoral as those criminal oligarchs are even rewarded for their sordid looting and corrupt practices. Only Russia and China have openly resorted to a New Deal type solution, in consonance with the practices of the late regime of Franklin Delano Roosevelt of the USA. As far as the international-global front is concerned, the concurrence of a new treaty that will resonate a new financial architecture is nowhere in sight.
In the absence of genuine solutions that can stabilize ailing economies on both the domestic and international fronts, the downward spirals will continue, until the economies of the North will hit rock bottom depression that will be worse than the one that crashed the USA, UK and Germany almost a century ago (USA, UK, Germany were then the world’s top industrial & military powers). In the absence of capital control policies up North, capital flight will ensue at dizzying speed, draining their respective countries of trillions of dollars and/or euros at levels far higher than the 2008 drain. The smart money that will sneak out will find better shelters in the South (emerging markets notably East Asia + India).
The possibility of North-based companies transferring their headquarters to the South is not entirely ruled out. The other option is for the corporate owners to transfer domicile from the North to the South, leaving their ailing mother companies in the hands of trusted stewards. The era of distance remote control-type management by corporate owners could very well begin this year, which will modify corporate governance by no small means.
The positive light for the global economy is that finally the corporate and state leaders will see light at the end of the tunnel and call for a global conference to carve out a new financial architecture. Laissez faire, a cadaver doctrine before the 2nd world war that was revived by the monetarists and greedy financiers, will finally lay to rest as it gives way to dirigist or interventionist economics. Stronger regulatory mechanisms may be charted this year too, at least on paper.
New Deal, Keynesian, and welfare state doctrines will be blended together to produce an eclectic admixture. Since New Deal has an international facet into it thus rendering it more comprehensive, as the late FDR cogitated the need for international cooperation and development for all countries to end all wars and foment lasting peace, this doctrine will more or less be followed. We will not be surprised if, after the Davos conference, the shape of the future will already be definitively of the New Deal type.
Conclusively, even if the Northern economies will flatten down to zero and/or negative growths, the downward spiral may stop by the last quarter of the year. The full effects of the intervention solutions won’t be felt this year though, as it will take some more years to get them to galvanize. So let us brace for more turbulent winds, while hoping that the storm would finally stop so we can enjoy a delightful holiday season comes December.
[26 January 2009, Quezon City, MetroManila]
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Finalist for society, politics, history blogs
Showing posts with label monetarism. Show all posts
Showing posts with label monetarism. Show all posts
Monday, January 26, 2009
Friday, November 14, 2008
ZAIBATSU GLOBALIZATION ‘VOODOO ECONOMICS’ BOWING OUT
Bro. Erle Frayne Argonza
Magandang hapon! Good afternoon!
Let me share to you at this moment some notes regarding the ‘globalization’ experiment and the flawed policies that sustained it. There has been much ballyhoo about the global economy’s integration, over the last three (3) decades, as having been carved out supposedly by the Anglo-Saxon policy architects, using Thatcher & Reagan as the face for the ‘neo-liberal’ policy regime they installed.
Little do peoples across the globe, including experts who are so mired in their own parochial perspectives, know that the liberalization of country economies has a great deal to do with the Zaibatsu offensive. The West should better accept the facts: that their technocrats and policy shapers have run out of fresh ideas since the 1970s onwards (i.e. mentally bankrupt), a gap that they filled up by looking up to Japan and the NICs (newly industrializing countries) for copycat purposes.
Reaganomics, as neo-liberal policies of ‘privatization’ was dubbed (Thatcher of the UK preceded Reagan by a year), is as voodoo as one can get, seductive as any enchanting mantra-resonating principle can be, and was indeed potent in erasing the vestiges of the Regulated Economics doctrines that preceded the era. In the emerging markets, they were dubbed as ‘structural adjustment policies’ or SAPs, were imposed by the IMF-World Bank Group on debtor nations, and can be summed up as follows:
· Core principles: Privatization, Liberalization, Deregulation
· Subsidiary Principles: Tax reforms, trade liberalization, free floating exchange rates, diminished state subsidies for welfare, increased utility prices (revenue generation)
· Governance Principle: Decentralization (local government autonomy)
Such policy reform measures, as far as developing countries or DCs were concerned, came in as very harsh, cruel ‘austerity measures’ imposed by the IMF. We citizens from the ‘margins’ can never forget these measures, the pauperization that they effected, the dislocation of marginal producers, the decline of health services and rise of morbidity rates, and so on. In the Philippines, our very own capital goods industries were either delayed or un-implementable (such as integrated steel), as the money allocated for their purposes simply dried as dictated by the World Bank.
But there’s another set of policy architecture that wasn’t Anglo-Saxon, and didn’t receive their inspiration from the classicists (Smith, Ricardo) and the monetarists (Friedman, Hayek). This set of liberalization policies came from Zaibatsu country, and were crafted by Japanese technocrats. Not only policies, but also institutions were addressed by them, giving rise to the globalized economy that we have today.
Chief among those technocrats was Kenichi Ohmae, who in the 1980s was a think-tank executive. Further down the line were many other technocrats, who were organically linked to the Zaibatsus (landlord-industrialist-financier oligarchs), taking up cudgels for Ohmae.
Globalization, as one better realize, was never meant as any ‘win/win’ formula for nation-states in the arena of international trade as the liberal thinkers came to defend it later. It was outright a strategy to pre-position Zaibatsu corporate interests outside of Japan, notably the U.S. and European markets.
At that time of conceptualization, Zaibatsus have already efficaciously penetrated the Asian markets, and had leveraged their investments’ entry via aid and technical knowledge diffusion (including sponsoring Developing Country scholars in Japanese universities & special institutes). The old doctrine of ‘Asia Co-prosperity sphere’ was finally won, without firing a shot this time (unlike Imperial Japan era expansionism).
In the 1980s, the clamor for mooring investments and trade in the Western markets became ever stronger. The offensive tactic adapted was rather two-pronged, which made the new voodoo mantra even more potent:
· On the micro-level, permeate other markets with new concepts such as ‘Theory Z’ (decentralized authority, see W. Ouichi), total quality management or TQM, new tools for strategic planning, mergers and de-mergers. Till these days, the tools are considered sacrosanct in all sectors of society, including the Catholic Church that now uses ‘bottom-up’ planning added to strategic planning (my observations done in 2001-02 in a California diocese).
· On the macro-level, blend the Reagan-Thatcher ‘structural adjustments’ with the ‘globalization’ doctrine. The Zaibatsu technocrats fanned out across the globe, some of whom were positioned inside international bodies, and sweetened liberalization via a supposedly ‘win/win’ growth strategy for participating countries. This brilliant blending, which Western thinkers didn’t perceive at all as any subtle tactic by a predatory class (Zaibatsu), soon caught up fire and became buzz word for nigh three decades.
Before long, the Japan Inc. was being bandied across the globe as worth any country’s emulation. Southeast Asia and Korea went for it. Even the former presidents of the USA admired the Japanese Inc. doctrine of renewed private initiatives and shift from macro- to micro-economics as stabilization and growth measure. Bill Clinton of the USA spoke so fondly of ‘globalization’ like some captive fan of an economic icon, and moved to negotiate the NAFTA.
Little do unsuspecting, gullible peoples across the planet, more so the policy experts of the West, realize that the Japanese voodoo economics was largely intended to permit Zaibatsu investments to breed and morph inside their economies. Using merger and buy-in tactics, the Zaibatsu agents made it appear that their sponsors came in for benign purposes or so. If there is any group in the world today that is enjoying its last laugh, it is the Japanese militarists of the past, who finally saw the success of their nation’s offensives and the decline of the West via ‘organized chaos’.
Around 1994, the magic of the Japan Inc. began to cramble. Recession came, and before long many banks and investment houses were catching fire. That was the origin of the bankrupt and immoral Bush-Paulson ‘bailout’, which began with the ‘crisis management’ tactic in Japan to save ailing banks and financial institutions. Eventually, Zaibatsu technocrats were forced to revive the Western tool of ‘interest rates’ intervention, to the extent of bringing down interest rates to zero percent and sustaining it there for many years.
There also came that moment, in the late 1990s through 2006, when Zaibatsu financiers suddenly were so awash with funds (liquidities), at a time when Western economies reached low growths. The ‘yen initiative’ package was therefore conceptualized as another last-ditch voodoo tactic, which was implemented by loaning out large funds at zero or low interest, which Western financiers than re-loaned at profitable interest rates. Many such funds reached the USA& EU realty subprime mortgage markets, to recall. Again, note the seemingly benign nature of the financial gesture.
Just as when the realty markets were beginning to sneeze in America, the last voodoo measure was pulled out. The ‘crisis management’ was already folded up earlier, as Japan’s economic growth was propelled up anew by the Asian markets notably China’s. Just as when USA & EU needed the Zaibatsu loans very badly, and ditto for portfolio investments, they were pulled out, thus ensuring the crash of both economies.
Japananese voodoo economics is now bowing out, as the compass of policy initiatives at present is pointing to the reconstruction of macro-economic, New Deal type measures intended to attack problems both on short-term (bail out on productive sectors) and long-term basis (induce physical economy rather than predatory finance). But the withdrawal of the voodoo regime is not being done without witnessing its catastrophic results.
That’s surely tragic for the West or North. I wonder how Zaibatsus & technocrats perceive peoples outside their borders: whether they regard the latter as human beings worth co-partnering with, or as hungry lizards that must subsist on crumbs of investments & finance from Japan that have been buttressed by enormous tons of gold acquired through production and plunder of occupied lands, across the 2,000 years of Japan’s existence from kingdom to nation.
Honestly, I don’t know the answer. But if the Zaibatsus are receiving flaks from outside their borders, it wouldn’t be a surprise. There are no more borders for Zaibatsus by the way, just an entire planet with seamless web, cocooned in all corners by their corporate money.
[Writ 14 November 2008, Quezon City, MetroManila]
Magandang hapon! Good afternoon!
Let me share to you at this moment some notes regarding the ‘globalization’ experiment and the flawed policies that sustained it. There has been much ballyhoo about the global economy’s integration, over the last three (3) decades, as having been carved out supposedly by the Anglo-Saxon policy architects, using Thatcher & Reagan as the face for the ‘neo-liberal’ policy regime they installed.
Little do peoples across the globe, including experts who are so mired in their own parochial perspectives, know that the liberalization of country economies has a great deal to do with the Zaibatsu offensive. The West should better accept the facts: that their technocrats and policy shapers have run out of fresh ideas since the 1970s onwards (i.e. mentally bankrupt), a gap that they filled up by looking up to Japan and the NICs (newly industrializing countries) for copycat purposes.
Reaganomics, as neo-liberal policies of ‘privatization’ was dubbed (Thatcher of the UK preceded Reagan by a year), is as voodoo as one can get, seductive as any enchanting mantra-resonating principle can be, and was indeed potent in erasing the vestiges of the Regulated Economics doctrines that preceded the era. In the emerging markets, they were dubbed as ‘structural adjustment policies’ or SAPs, were imposed by the IMF-World Bank Group on debtor nations, and can be summed up as follows:
· Core principles: Privatization, Liberalization, Deregulation
· Subsidiary Principles: Tax reforms, trade liberalization, free floating exchange rates, diminished state subsidies for welfare, increased utility prices (revenue generation)
· Governance Principle: Decentralization (local government autonomy)
Such policy reform measures, as far as developing countries or DCs were concerned, came in as very harsh, cruel ‘austerity measures’ imposed by the IMF. We citizens from the ‘margins’ can never forget these measures, the pauperization that they effected, the dislocation of marginal producers, the decline of health services and rise of morbidity rates, and so on. In the Philippines, our very own capital goods industries were either delayed or un-implementable (such as integrated steel), as the money allocated for their purposes simply dried as dictated by the World Bank.
But there’s another set of policy architecture that wasn’t Anglo-Saxon, and didn’t receive their inspiration from the classicists (Smith, Ricardo) and the monetarists (Friedman, Hayek). This set of liberalization policies came from Zaibatsu country, and were crafted by Japanese technocrats. Not only policies, but also institutions were addressed by them, giving rise to the globalized economy that we have today.
Chief among those technocrats was Kenichi Ohmae, who in the 1980s was a think-tank executive. Further down the line were many other technocrats, who were organically linked to the Zaibatsus (landlord-industrialist-financier oligarchs), taking up cudgels for Ohmae.
Globalization, as one better realize, was never meant as any ‘win/win’ formula for nation-states in the arena of international trade as the liberal thinkers came to defend it later. It was outright a strategy to pre-position Zaibatsu corporate interests outside of Japan, notably the U.S. and European markets.
At that time of conceptualization, Zaibatsus have already efficaciously penetrated the Asian markets, and had leveraged their investments’ entry via aid and technical knowledge diffusion (including sponsoring Developing Country scholars in Japanese universities & special institutes). The old doctrine of ‘Asia Co-prosperity sphere’ was finally won, without firing a shot this time (unlike Imperial Japan era expansionism).
In the 1980s, the clamor for mooring investments and trade in the Western markets became ever stronger. The offensive tactic adapted was rather two-pronged, which made the new voodoo mantra even more potent:
· On the micro-level, permeate other markets with new concepts such as ‘Theory Z’ (decentralized authority, see W. Ouichi), total quality management or TQM, new tools for strategic planning, mergers and de-mergers. Till these days, the tools are considered sacrosanct in all sectors of society, including the Catholic Church that now uses ‘bottom-up’ planning added to strategic planning (my observations done in 2001-02 in a California diocese).
· On the macro-level, blend the Reagan-Thatcher ‘structural adjustments’ with the ‘globalization’ doctrine. The Zaibatsu technocrats fanned out across the globe, some of whom were positioned inside international bodies, and sweetened liberalization via a supposedly ‘win/win’ growth strategy for participating countries. This brilliant blending, which Western thinkers didn’t perceive at all as any subtle tactic by a predatory class (Zaibatsu), soon caught up fire and became buzz word for nigh three decades.
Before long, the Japan Inc. was being bandied across the globe as worth any country’s emulation. Southeast Asia and Korea went for it. Even the former presidents of the USA admired the Japanese Inc. doctrine of renewed private initiatives and shift from macro- to micro-economics as stabilization and growth measure. Bill Clinton of the USA spoke so fondly of ‘globalization’ like some captive fan of an economic icon, and moved to negotiate the NAFTA.
Little do unsuspecting, gullible peoples across the planet, more so the policy experts of the West, realize that the Japanese voodoo economics was largely intended to permit Zaibatsu investments to breed and morph inside their economies. Using merger and buy-in tactics, the Zaibatsu agents made it appear that their sponsors came in for benign purposes or so. If there is any group in the world today that is enjoying its last laugh, it is the Japanese militarists of the past, who finally saw the success of their nation’s offensives and the decline of the West via ‘organized chaos’.
Around 1994, the magic of the Japan Inc. began to cramble. Recession came, and before long many banks and investment houses were catching fire. That was the origin of the bankrupt and immoral Bush-Paulson ‘bailout’, which began with the ‘crisis management’ tactic in Japan to save ailing banks and financial institutions. Eventually, Zaibatsu technocrats were forced to revive the Western tool of ‘interest rates’ intervention, to the extent of bringing down interest rates to zero percent and sustaining it there for many years.
There also came that moment, in the late 1990s through 2006, when Zaibatsu financiers suddenly were so awash with funds (liquidities), at a time when Western economies reached low growths. The ‘yen initiative’ package was therefore conceptualized as another last-ditch voodoo tactic, which was implemented by loaning out large funds at zero or low interest, which Western financiers than re-loaned at profitable interest rates. Many such funds reached the USA& EU realty subprime mortgage markets, to recall. Again, note the seemingly benign nature of the financial gesture.
Just as when the realty markets were beginning to sneeze in America, the last voodoo measure was pulled out. The ‘crisis management’ was already folded up earlier, as Japan’s economic growth was propelled up anew by the Asian markets notably China’s. Just as when USA & EU needed the Zaibatsu loans very badly, and ditto for portfolio investments, they were pulled out, thus ensuring the crash of both economies.
Japananese voodoo economics is now bowing out, as the compass of policy initiatives at present is pointing to the reconstruction of macro-economic, New Deal type measures intended to attack problems both on short-term (bail out on productive sectors) and long-term basis (induce physical economy rather than predatory finance). But the withdrawal of the voodoo regime is not being done without witnessing its catastrophic results.
That’s surely tragic for the West or North. I wonder how Zaibatsus & technocrats perceive peoples outside their borders: whether they regard the latter as human beings worth co-partnering with, or as hungry lizards that must subsist on crumbs of investments & finance from Japan that have been buttressed by enormous tons of gold acquired through production and plunder of occupied lands, across the 2,000 years of Japan’s existence from kingdom to nation.
Honestly, I don’t know the answer. But if the Zaibatsus are receiving flaks from outside their borders, it wouldn’t be a surprise. There are no more borders for Zaibatsus by the way, just an entire planet with seamless web, cocooned in all corners by their corporate money.
[Writ 14 November 2008, Quezon City, MetroManila]
Monday, July 14, 2008
US WATCH: DE-INDUSTRIALIZATION
Bro. Erle Frayne Argonza y Delago
The public (in America) is of the broad position that the NAFTA was responsible for the folding up of many factories and the transfer of jobs to Mexico/South. This NAFTA-bashing has some validity to it, but the semi-economic integration alone with Mexico and Canada isn’t a sufficient reason for the bigger problem of de-industrialization.
Once robust and colossal, the industrial sector of the USA contributed over 50% of the Gross Domestic Product or GDP, and employed half the labor as well. As early as the mid-50s, the futuristic sociologist Daniel Bell already warned that the trend wouldn’t hold long enough, as the ‘post-industrial society’ was already knocking its doors on the USA. Not only that, he also forecast that by the 21st century, the center of global economic growth would be the Asia-Pacific, while labor would shift to the services sector.
Had the policy-makers heeded the warning of the likes of Bell then, and fine-tuned the ‘real economy’ principles of Franklin Roosevelt, the de-industrialization of America couldn’t have happened. By the early 1980s, Alvin Toffler added resounding echoes to the forecast of a post-industrial society, by adumbrating the ‘3rd wave technology’ thesis. Such a thesis expounded that knowledge-intensive technologies would dominate post-industrial society, and will destroy institutions founded on old economic-ideological precepts notably liberal capitalism and socialism.
However, the neo-liberals led by Friedman and Hayek became the dominant Pied Pipers in shaping the public policy of America. All sectors of the economy soon became dog-eat-dog arena for private sector hegemony, leading to the ascent of the ‘virtual economy’ founded on predatory finance. Gradually did the ‘virtual economy’ wreck the classic industries of America, the most exemplary being the steel industry.
The tragic closure of Bethlehem Steel tells it all: that the ‘virtual economy’ has no interest in sustaining strategic industries or to develop their technological edge further. One after the other, manufacturing concerns were closed shop, dis-assembled and re-assembled in emerging markets where labor and factor inputs were cheaper. The ‘industrial belt’ of America—stretching from up New England down to the automotive & machine tool shops of the south—is rapidly evaporating.
The clear message for this year’s presidential poll in America is: resuscitate the industrial sector. Re-tool both the hardware, institutions and human resources to make them competitive again. Revive all the strategic reproducible industries (steel, machine tools, railways, automotive, shipping, airlines, etc.), or else face the specter of ‘third worldization’ of America. A tall order, but what choice does the USA have?
[Writ 06 June 2008, Quezon City, MetroManila]
The public (in America) is of the broad position that the NAFTA was responsible for the folding up of many factories and the transfer of jobs to Mexico/South. This NAFTA-bashing has some validity to it, but the semi-economic integration alone with Mexico and Canada isn’t a sufficient reason for the bigger problem of de-industrialization.
Once robust and colossal, the industrial sector of the USA contributed over 50% of the Gross Domestic Product or GDP, and employed half the labor as well. As early as the mid-50s, the futuristic sociologist Daniel Bell already warned that the trend wouldn’t hold long enough, as the ‘post-industrial society’ was already knocking its doors on the USA. Not only that, he also forecast that by the 21st century, the center of global economic growth would be the Asia-Pacific, while labor would shift to the services sector.
Had the policy-makers heeded the warning of the likes of Bell then, and fine-tuned the ‘real economy’ principles of Franklin Roosevelt, the de-industrialization of America couldn’t have happened. By the early 1980s, Alvin Toffler added resounding echoes to the forecast of a post-industrial society, by adumbrating the ‘3rd wave technology’ thesis. Such a thesis expounded that knowledge-intensive technologies would dominate post-industrial society, and will destroy institutions founded on old economic-ideological precepts notably liberal capitalism and socialism.
However, the neo-liberals led by Friedman and Hayek became the dominant Pied Pipers in shaping the public policy of America. All sectors of the economy soon became dog-eat-dog arena for private sector hegemony, leading to the ascent of the ‘virtual economy’ founded on predatory finance. Gradually did the ‘virtual economy’ wreck the classic industries of America, the most exemplary being the steel industry.
The tragic closure of Bethlehem Steel tells it all: that the ‘virtual economy’ has no interest in sustaining strategic industries or to develop their technological edge further. One after the other, manufacturing concerns were closed shop, dis-assembled and re-assembled in emerging markets where labor and factor inputs were cheaper. The ‘industrial belt’ of America—stretching from up New England down to the automotive & machine tool shops of the south—is rapidly evaporating.
The clear message for this year’s presidential poll in America is: resuscitate the industrial sector. Re-tool both the hardware, institutions and human resources to make them competitive again. Revive all the strategic reproducible industries (steel, machine tools, railways, automotive, shipping, airlines, etc.), or else face the specter of ‘third worldization’ of America. A tall order, but what choice does the USA have?
[Writ 06 June 2008, Quezon City, MetroManila]
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