[Debate] The Wall Street Scandal of All Scandals, , By Robert Reich

[Yoshie Furuhashi]

"The 99%" have a theoretical justification for drawing a line there,
but in practice "We Are the 66%" on a good day.

On Wed, Jul 11, 2012 at 7:49 AM, Riaz K Tayob <riaz.tayob at gmail.com> wrote:
>
>
> On 2012/07/11 12:51 AM, m_redmond at btinternet.com wrote:
>
> I just don't think the North-South thing works as neatly as previously.
> The wealth gap is growing wider everywhere and increasingly there will be
> islands of wealthy elites, who move around as they wish and live in several
> places, surrounded by masses of very poor people. We have to see everyone
> not part of the very wealthy elite 1% as one of us and work through the
> differences.
>
>
> I agree with you at some level of abstraction. The middle, working and
> other groups in the North are certainly facing an onslaught from their
> elites. But many many of these groups civil society participation on
> economic issues revealed that they were happy to sit on their privileges at
> the expense of others in the world. For a time it worked,t his alliance
> between rich states and their people in the form of a social contract.
>
> Even at that time the relevance of colonialism as a path determining issue
> was met with, you are independent, get over the past kind of arguments. So
> it depends what one breathes life into, the condition of the people, or
> history. And so I do agree with you, but the concept of the South or Third
> World is more than just an analytical category. It is an organising
> principle. A careful review of the positions put forward by the progressive
> reformers (South countries, with some changes, but there is typically a
> vanguard that struggles in the face of enormous odds) ought to show that at
> least internationally (at IFIs, WTO etc) solidarity with the "rogue states"
> was demanded as they sought to limit liberalisation (not all but as above,
> there was resistance, that is simply marginalised - how can you be against
> free trade).
>
> Let me be practical. About how this "all of us are in this together" and
> "lets be radical" can play out to the detriment of the South. The WTO
> regulates agriculture. It enforces tariff cuts on all countries. It allows
> countries to pay subsidies, subject to conditions that allow mostly only the
> rich countries to pay these (and others cannot really afford it anyway).
> There are negotiations on more tariff cuts at the WTO. Poor countries are
> saying that they want subsidies to be cut (subsidies make rich countries
> more competitive) as agriculture is their "comparative advantage". The rich
> countries have blocked talks on cutting subsidies, yet insist that all
> countries cut tariffs (so that they can be bombed by cheap imports that have
> been subsidised). What is the configuration of forces? 1) farmers in the
> rich countries want to keep their subsidies, and govts are obliging. 2)
> Third World nationalists are resisting tariff cuts and pushing for cuts in
> rich country subsidies (not because agric cannot benefit from subsidies but
> based on the inductive analysis of what is happening in the sector); 3) the
> "all in this together group" of radicals hold a very interesting position
> (and are comprised of north and south representatives - so true, it is not a
> neat fit!). First they say the WTO should not regulate agriculture, and
> agriculture should be out of the WTO. That is a correct position, which I
> agree with. But it is maximalist. On the real/minimalist level what is
> happening is a severe cut in tariffs (reducing the ability to protect local
> producers) while subsidies are not a matter for discussion (protecting rich
> country producers). The radicals conflate the maximalist position with the
> reality of what is happening - i.e. entrenching European and American
> privilege while securing markets for export - which is nice, protest outside
> while poor countries get their buts kicked in negotiations. And as this
> carries on the rich country farmers can hide amongst the radical position
> that is so appealing to poor farmers (you can get subsidies, and the WTO out
> of agriculture) with a joint position on the WTO talks.
>
> Problem is that in "low reality" the poor farmers are getting their buts
> kicked in the market (it is cheaper to buy EU tomato past in Ghana than real
> tomato equivalents, etc). So even with the "radicals" we see a perversion of
> the agenda FROM A MINIMALIST perspective. Compound this situation that the
> radicals adopt Trotskyite tendencies to keeping the minimalist Third World
> Nationalists from raising their issues and you have a sense of the unreality
> of the anti-Third Worldist argument.
>
>
>
>
> I don't understand why there is such inertia in the UK except that it is
> more a much more class-ridden society than the rest of Europe and people at
> the bottom have internalised that and blame themselves and feel bad and
> really are struggling to hold it together. The brainwashing on austerity has
> worked. Rights are being lost hand over fist. Health care is being
> privatised and now there is a softening up of public opinion for privatised
> secondary schooling. Actually to me the welfare system always seemed to be
> designed to keep people pacified for the comfort of the ruling classes.
>
>
> Compared to the revolutionary tendencies of neoliberals (and privatising
> the welfare state is revolutionary) noblesse oblige looks positively
> progressive...
>
>
> About the BoE, at the time the reason for making it independent was so it
> was not used by parties at election time to win votes for lowering interest
> rates and such but I am now sceptical about that.
>
>
> Independent Central Banks? It is like the invisible hand! Central Banks
> have long ago lost control over the money supply.. they started with M1
> (coins, notes,) moved on to M2 and got up to M32 I think before they gave it
> up as a bad job...
>
>
> Megan.
> ===============================================================
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> http://www.hclc.org.uk/
>
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>
>
>
> ________________________________
> From: Toussaint Losier <toussaint.losier at gmail.com>
> To: Debate is a listserve that attempts to promote information and
> analyses of interest to the independent left in South and Southern Africa
> <debate-list at fahamu.org>
> Sent: Tuesday, 10 July 2012, 21:44
> Subject: Re: [Debate] The Wall Street Scandal of All Scandals, , By Robert
> Reich
>
> Riaz,
>
> Your comments regarding the Global North reminds me of a speech by Ward
> Churchill where he ended by suggesting that rather than solidarity with
> Palestinians or other oppressed peoples, what was needed was for the
> organized masses of the Third World to offer political solidarity and
> material support to those struggling in the North for we are in the belly of
> the beast and in the best position to strike at the heart of monopoly
> capitalism.
>
> Peace, Toussaint
>
> On Tue, Jul 10, 2012 at 4:04 AM, Riaz K Tayob <riaz.tayob at gmail.com>
> wrote:
>
> See below, where there is smoke there is fire?
>
> There are a number of issues that arise from this. For the South, I think
> it is an indictment on many of the movements to have left the "reformist"
> (state- or International Organisation -centric) flank unguarded. Those of us
> (SEATINI etc) were marginalised from a range of events and meetings from
> raising this issue, and had to concede to giving up space to "real" issues
> defined by "fashion" (i.e. choose the "fad" you like, access to
> banking/water or on principle - it is only legitimate if it has credence
> with the people). In short, the marginalisation of "intellectuals" (I am
> merely a wannabe) DUE TO THEIR POSITION in the movement is certainly
> expensive. Perhaps now the suicide politics of South African civil society
> may take heed that there is a dialectical relationship between the people
> and intellectuals (there has not been a revolution without intellectuals,
> nor has there been a counterrevolution without them).
>
> For the North, the issue is more complicated. What would it sound like if
> progressives from teh South said to them (as they did to us in the past),
> "be practical, don't take a radical position" (it is hard to discern from
> this if it was a real political judgement or laced with self interest
> knowing that free trade benefits the rich countries more - even if not all
> their people). In particular, the North trade unions have been at the
> forefront of maintaining their privileges and naked self interest. Now they
> blame China and immigrants etc for the mess that free trade has wrought -
> while there are exceptions etc, the discourse in the mainstream is still the
> same. The EU still seeks to impose liberalisation of finance and derivatives
> on Africa in their free trade agreement (as they recently did with the
> Caribbean countries) while the US has incredibly harsh finance terms in its
> free trade agreements. NOTHING HAS CHANGED even if there are domestic
> changes afoot.
>
> When will more of our brothers and sisters in the North really wake up?
> Occupy was great - 3 years late. And now what? This North South framing is
> very nice and all, but when is the North going to take THEIR responsibility
> of tackling global finance in their countries? We hear a lot about the
> behaviour of poor country officials etc, but the international dimension of
> finance is given short shrift. So much for a global conception of issues -
> notwithstanding calls for solidarity!
>
>
>
> 9 July 2012 Last updated at 18:57 GMT
> Libor scandal: Paul Tucker denies 'leaning on' Barclays
> Paul Tucker said no government minister had asked him to "lean on"
> Barclays over Libor
> The deputy governor of the Bank of England (BoE) has said he did not give
> Barclays instructions to lower its Libor submissions in 2008.
> Paul Tucker said no government minister had asked him to "lean on"
> Barclays over its inter-bank lending rates.
> But he also told MPs that the BoE and the government feared that Barclays
> might need a bailout.
> Ex-Barclays boss Bob Diamond's account of a conversation between the two
> gave "the wrong impression", Mr Tucker said.
> That telephone conversation, which took place on 29 October 2008, has come
> under much scrutiny.
> Mr Diamond's note of the call concluded by saying Mr Tucker had stated
> that "it did not always need to be the case that we appeared as high [with
> Libor submissions] as we have recently".
> Mr Tucker told the Treasury Select Committee that, unlike Mr Diamond, he
> had not made a note of the conversation. "Sitting here, I greatly wish I had
> taken a note of it," he said.
> "I think the last sentence gives the wrong impression," he said.
> "It should have said something along the lines of: 'Are you ensuring that
> you, the senior management of Barclays, are following the day-to-day
> operations of your money market desk, your treasury, are you ensuring that
> they don't march you over the cliff inadvertently by giving signals that you
> need to pay up for funds?'"
> Continue reading the main story
>
> “Start Quote
>
> His version was that he was telling Bob Diamond in their now notorious
> conversation at the end of October 2008, that Barclays at the time was too
> conspicuous and noisy in the way it was paying a higher interest rate to
> borrow than other banks”
>
> Robert Peston Business editor
>
> Read more from Robert
>
> Mr Tucker said that Mr Diamond's resignation from Barclays last week was
> the right decision, as "absolutely decisive action was needed to start a new
> chapter".
> Discretion
> While he said the BoE did not think Barclays was "doomed" in 2008, Mr
> Tucker said there was "anxiety" about the bank's funding position.
> He said there was concern that after RBS, HBOS and Lloyds had to be bailed
> out by the government in the middle of October 2008, Barclays could be "next
> in line".
> At the time, Barclays' submissions of its borrowing rates were higher than
> those of other banks. Mr Tucker claims that he was warning Mr Diamond that
> Barclays risked spooking investors to such an extent that they might find
> the market became closed to it.
> Continue reading the main story
>
> Bob Diamond's notes of phone conversation with Paul Tucker
>
> Emailed to then chief executive John Varley on 30/10/2008. Copied to Jerry
> del Missier.
> Date: 29th October 2008
> Further to our last call, Mr Tucker reiterated that he had received calls
> from a number of senior figures within Whitehall to question why Barclays
> was always toward the top end of the Libor pricing. His response was "you
> have to pay what you have to pay". I asked if he could relay the reality,
> that not all banks were providing quotes at the levels that represented real
> transactions, his response "oh, that would be worse".
> I explained again our market rate driven policy and that it had recently
> meant that we appeared in the top quartile and on occasion the top decile of
> the pricing. Equally I noted that we continued to see others in the market
> posting rates at levels that were not representative of where they would
> actually undertake business. This latter point has on occasion pushed us
> higher than would otherwise appear to be the case. In fact, we are not
> having to "pay up" for money at all.
> Mr Tucker stated the levels of calls he was receiving from Whitehall were
> "senior" and that while he was certain we did not need advice, that it did
> not always need to be the case that we appeared as high as we have recently.
>
> Barclays reveals Bank call memo
>
> BBC business editor Robert Peston said the BoE deputy governor was telling
> Mr Diamond to get a grip on Barclays' dealing desks, to prevent it becoming
> the next big bank of the time to be semi-nationalised.
> Mr Tucker said he was not aware of any Libor manipulation at the time, but
> now realised the Libor market was a "cesspit".
> Emails released earlier on Monday revealed that the BoE had almost daily
> contact with Barclays over inter-bank lending at the end of October 2008.
> At this time, during the height of the financial crisis, Barclays was
> trying to manipulate Libor rates by submitting lower borrowing rates.
> These rates, submitted by a number of banks, go into calculating the daily
> Libor, or London inter-bank lending rate, which is the basis for millions of
> daily financial transactions.
> 'Absolutely not'
> Mr Tucker, who had last week requested a hearing with the Treasury Select
> Committee "as soon as possible", was asked if any government official or
> minister in 2008 had asked him "to lean on" Barclays or any other bank to
> lower their Libor submissions.
> Specifically, he was asked about Shriti Vadera, an adviser to then-Prime
> Minister Gordon Brown, and shadow chancellor Ed Balls, who was then a Labour
> minister.
> His response each time was "absolutely not". He added: "I don't think I
> spoke to Shriti Vadera throughout this period at all."
> He said that one of the "senior officials" he had spoken to about Libor
> was Cabinet Secretary Sir Jeremy Heywood. He said the person he had spoken
> to most at Whitehall was Tom Scholar at the Treasury.
> Chancellor George Osborne had said last week that Mr Balls had "questions
> to answer" over the Libor scandal, although he has now said that his Labour
> counterpart was not personally involved in the scandal.
> Labour's Chris Leslie, shadow financial secretary to the Treasury, said:
> "It is now crystal clear that the allegations he threw around were
> completely wrong and without foundation."
> He called on Mr Osborne to "publicly withdraw these false allegations and
> apologise".
> On 2012/07/09 04:29 PM, m_redmond at btinternet.com wrote:
>
> Speaking very much from the ground - it is possible that the LIBOR scandal
> might implicate the Bank of England and wonder what role being made
> 'independent' by the Last Labour Chancellor Gordon Brown, had on banking
> shenanigans.
> Megan.
>
>
>
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--
Yoshie Furuhashi
<http://mrzine.org/>