Sure, American politicians have been bought and paid for by the Wall Street giants. See this, this and this.
And everyone knows that the White House and Congress – while talking about cracking down on Wall Street with strict regulation – have actually watered down some of the most important protections that were in place.
For example, Senator Cantwell says that the new derivatives legislation is weaker than the old regulation. And leading credit default swap expert Satyajit Das says that the new credit default swap regulations not only won’t help stabilize the economy, they might actually help to destabilize it.
But the U.S. is not being sold out in a vacuum.
On March 1, 1999, countries accounting for more than 90 per cent of the global financial services market signed onto the World Trade Organization’s Financial Services Agreement (FSA). By signing the FSA, they committed to deregulate their financial markets.
For example, by signing the FSA, the U.S. agreed not to break up too big to fails. The U.S. also promised to repeal Glass-Steagall, and did so 8 months after signing the FSA.
Indeed, in signing the FSA and other WTO agreements, the U.S. has legally bound itself as follows:
• No new regulation: The United States agreed to a “standstill provision” that requires that we not create new regulations (or reverse liberalization) for the list of financial services bound to comply with WTO rules. Given that the United States has made broad WTO financial services commitments – and thus is forbidden by this provision from imposing new regulations in these many areas – this provision seriously limits the policy [options] available to address the current crisis.
• Removal of regulation: The United States even agreed to try to even eliminate domestic financial service regulatory policies that meet GATS [i.e. General Agreement on Trade in Services] rules, but that may still “adversely affect the ability of financial service suppliers of any other (WTO) Member to operate, compete, or enter” the market.
• No bans on new financial service “products”: The United States is also bound to ensure that foreign financial service suppliers are permitted “to offer in its territory any new financial service,” a direct conflict with the various proposals to limit various risky investment instruments, such as certain types of derivatives.
• Certain forms of regulation banned outright: The United States agreed that it would not set limits on the size, corporate form or other characteristics of foreign firms in the broad array of financial services it signed up to WTO strictures …
• Treating foreign and domestic firms alike is not sufficient: The GATS market-access limits on U.S. domestic regulation apply in absolute terms; that is to say, even if a policy applies to domestic and foreign firms alike, if it goes beyond what WTO rules permit, it is forbidden. And, forms of regulation not outright banned by the market-access requirements must not inadvertently “modify the conditions of competition in favor of services or service suppliers” of the United States, even if they apply identically to foreign and domestic firms.
In other words, the problem isn’t just that Congress and the White House have sold out to the Wall Street giants.
The problem is also that the U.S. has signed WTO agreements that have given the keys to the too big to fails, and have neutered their regulators. Even if some politicians tried to stand up to Wall Street – or even if we “throw out all of the bums” currently in political roles – the U.S. would still be locked into the WTO’s scheme for helping the financial giants to grow ever bigger and to take ever-bigger and ever-riskier gambles.
Indeed, the financial giants are pushing hard for further deregulation, demanding that the WTO’s “Doha round” of agreements be signed.
On the other hand, if the American people stood up for our sovereignty and demanded that the financial giants be reined in, it would be easy to fix the WTO agreements which the U.S. has already signed. Public Citizen notes, “as a legal matter, these problems are easy to remedy …”
Will the American people stand up and demand that the WTO deregulatory scheme be rolled back?
Or will we continue to let the financial giants destroy our country through buying and selling politicians (with the help of the Supreme Court) and forcing us into more and more draconian WTO treaties which destroy our sovereignty altogether?
Many people assume that they just have to hang in there until things improve. But the powers-that-be are grabbing more and more power and – unless we stand up to them – they will take it all.
As highly-regarded economist (Michael Hudson, Distinguished Research Professor at the University of Missouri, Kansas City, who has advised the U.S., Canadian, Mexican and Latvian governments as well as the United Nations Institute for Training and Research, and who is a former Wall Street economist at Chase Manhattan Bank who helped establish the world’s first sovereign debt fund) said:
“You have to realize that what they’re trying to do is to roll back the Enlightenment, roll back the moral philosophy and social values of classical political economy and its culmination in Progressive Era legislation, as well as the New Deal institutions. They’re not trying to make the economy more equal, and they’re not trying to share power. Their greed is (as Aristotle noted) infinite. So what you find to be a violation of traditional values is a re-assertion of pre-industrial, feudal values. The economy is being set back on the road to debt peonage. The Road to Serfdom is not government sponsorship of economic progress and rising living standards, it’s the dismantling of government, the dissolution of regulatory agencies, to create a new feudal-type elite.”
And Foreign Policy magazine ran an article entitled “The Next Big Thing: Neomedievalism“, arguing that the power of nations is declining, and being replaced by corporations, wealthy individuals, the sovereign wealth funds of monarchs, and city-regions.
We either stand up, or we slip back into a darker age.
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But there is the issue of irreversibility in complex systems. Essentially we cannot ‘go back’ and any attempt to do would crash the rest of the structure, not that they won’t try.
http://tinyurl.com/y9hqmp5
Over time, enrichment of the rich is impoverishment of the rich.
The economy will keep crashing again and again the more unbalanced the classes are.
A strong middle class is needed to sustain a small rich class. Any attempts to reduce the importance of the middle class in the system will lead to the destruction of wealth.
“A strong middle class is needed to sustain a small rich class. Any attempts to reduce the importance of the middle class in the system will lead to the destruction of wealth.”
Not true at all. The high resource consuming middle class is presently being replaced by a lesser consuming, much more cost effective, law enforcement overseer class as we move into a two tier ruler and ruled world with the ruled conned into intentionally created perpetual conflict with each other. Given the strain on global resources the wealthy ruling elite now favor control over profit, that includes massive depopulation. The scamerican middle class is a prime target. Go look at all of the people sleeping under the bridges.
Deception is the strongest political force on the planet.
Phil, you are actually completely mistaken. As an immediate counter-example, consider Haiti. A very small but rich elite; a huge mass of brutaliy impoverished poor. What tiny middle class they had a generation ago has been crushed by neoliberalism and the evisceration of what little functioning government they had, and where possible left the country. In truly feudal conditions—not that that term is appropriate as Hudson uses it, but—this was the situation. A great mass of poor subsistence agriculturalists and a few magnates who owned or controlled most of the land with incomes in the multi-million and at the top billion dollar range. Historically as well, the growth of the middle class was accomplished through a long, difficult political clash with landed wealth, and middle class political power—liberalism, literally—was achieved by breaking up magnate political and financial chokepoints.
For the rich to get really, really rich, what they need to do is break the middle class. The easiest way to do this is to conspire with the resentments of the lower middle class, the exact method which has been pursued in the US for a generation. I began refering to these contemporary finanicial system and other billionaire magnates as oligarchs because that is a better analogy than to feudalism, where there were specific legal ‘rights and prerogatives’ settled upon feudal magnates relative to other classes, a private use of lethal force and control of the local judiciary which was sanctioned and indeed expected, and a hereditary basis to office and position which we do not see (yet) with our wanna be magnates of today. So oligarchs is a better reference.
Oh and regarding those ‘binding constraints’ of WTO, just who was it who wrote most of those _in_ to the agreements? You’ll find US fingerprints all over them. Now greater integration through trade has many advantages and utility for the world’s population as a whole. The problem with WTO was less the idea of balancing than the fact that, veiled from public view, the nascent US oligarchs were allowed to essentially write all the ‘rules’ themselves, to the benefit of themselves, and the costs to absolutely everyone elese including everyone else in _their own society_. The oligarchas ARE the problem; not the only one, but the problem which drives all the others.
I don’t think anyone gives a rat’s ass about the the WTO regs at this point. The reason you don’t hear this argument much is that it is political suicide to make it, that the reason we can’t rein in the pirates on Wall Street is because the Congress signed away our sovereignty without telling us. I just don’t see this as a major policy motivator. The WTO has always struck me as more like the pirate’s code, that it was not so much a law as a guide. If you look around at how countries follow and don’t follow it, that’s about right.
When will the Democrats get to be as smart as Goldman and make money for the taxpayer by taxing Goldman products, i.e. derivatives. They are leaving many billions on the table while getting nowhere on regulation and looking stupid.
Easiest tax ever to collect on a daily basis.
I’ve been suggesting this for 2 years to various European finance ministers and so called leading economists. The French were only ones who got it immediately. It took 18 months for Brown to wake up.
If this is an opportunity to renegotiate the WTO regs then I suggest that this might be a good moment to add another regulation that says no free trade without fully free floating exchange rates (hereinafter called the China rule:-)
Jesus.
Well, do something.
Till now the only action is from behind the 19″ screen.
Where is the 3th political party?
Where is the anger?
Well there are a couple of ‘third parties,’ m’friend, but I’ll put my money on the Tea Smokers over the Tea Potters to accomplish a substantive goal first. : )
This is interesting as far as laying bare their real intentions, but it doesn’t have any meaning as far as domestic policy goes.
The real purpose of it, as with all globalization policy, is aggressive, unidirectional, heads-I-win-tails-you-lose, the stateless elites (having hijacked the governments of the rich countries) preying upon the poor. The only reason the hijacked “US government” signs the same agreement is for cosmetics. It would never live according to the same disadvantages it imposes on others.
As for domestic policy, this will never come up so long as we have this system, where domestic administrations and lawmakers don’t want to reform the economy.
On the other hand, if real reformers somehow ever did come to power, we would of course pay zero attention to any such “agreement”, which was never made for the good of the people, which rather signals a clear intent against the people’s welfare, and therefore does not bind us.
Dismantling of government? When in the past 100 years has the percentage of government budgets (local, state, fed combined) fallen against GDP? When has the number of laws ever been reduced?
In the face of these two answers, how can you seriously worry about less government?
Did any of you read the SIGTARP report that said the government funds about 100% of the residential mortgage market? Did you know the banking and financial industry is the most regulated market in the country? How many countless agencies have jurisdiction? How many laws are there? Just a few more laws would solve all these problems right? If we just tax a bit more, ban a few things, jail a few people then this won’t happen again right?
I wish I had your omnipotent minds.
The debate is not if we’ll have something called the US Federal government, the debate is who is running it, who will benefit, and who pays.
Turn off all the MSM news, cable news, and talk radio. When some politician or CEO or weird third party or political radio celebrity says he’s supporting you – immediately look for how you’re getting fucked. You are a walking meat sack with money, and they want your money. Don’t trust any of them ESPECIALLY the ones you listen to all the time and vote for.
Re-read the SIGTARP report. Apply some critical thinking. Pay attention to who is paying and who is getting all the loot.
None of us have omnipotent minds, but we do shut out all the BS flying around and use our minds on occasion.
I am heartend with this blog’s critical view of government, but the solution always seems to be more government!
You know what my biggest cost is? Taxes. My monthly mortgage is about 2/3 of my tax bill, but at least that should end after 30 years. That’s where i’m paying the most and I don’t have a choice about it. Good, i’m glad people don’t trust the MSM because they are basically government propagandists trying to lessen the shock of less freedoms and more theft and wars.
So your money went where is the next question – who is getting all those tax dollars?
Here’s a hint – the Wall St banks got bailed out with over $14 trillion dollars. TARP was a pittance compared to the loot they really got.
Not so much “more Government”, more like “better Government”.
Money is a tool to achieve power. Control is the prize. Finance seems to have achieved what they set out to find. Research the path and history of the Medicis and you will see where this ends. Start out as a moneychangers and end up as popes and princes. Neo-aristocracy indeed.
Since when the US care about international agreements? Since when is it afraid of going it alone?
Iraq, anyone?
The only thing that matters is: what do the plutocrats want? Sometimes their interests are advanced by international bodies, sometimes they ain’t.
You are probably barking at the wrong tree.
The WTO treaty was negotiated by various countries. We probably won’t know which country proposed that, except we could be almost certain it is the developed countries, most probably either the USA or the UK, which proposed/insisted the de-regulation of financial services. So it is probably the same Wall Street group that was behind all these from the beginning….
How close are we to living in one of the many B movies, and some big screen movies where corporations rule the world, and outright? Man, this is getting creepier by the week.
What movie will our lives most resemble in 10-20 years: Freejack, 1984, Road Warrior, Brazil, Blade Runner…?
It is also littered with the bodies of those subjected to rule of those ruler’s powers.
History is littered with the corpses of those who thought they could rule and exploit unchecked, without consequence.
Charles Freeman (the British historian, not the American diplomat) wrote a fascinating book a few years back entitled “The Closing of the Western Mind: The Rise of Faith and the Fall of Reason” (http://tinyurl.com/yd4qp9r) about the onset of the Dark Ages. Perhaps it won’t be long before someone reuses that title when the story of our times is being written.
Kinda puts “broken windows” at WTO conferences in perspective, doesn’t it?
Uhm, last time I checked wal-mart wasn’t taking 33% of my paycheck. I don’t see a line item to Goldman Sachs either, and though they influence the decisions of the government, they don’t have the final say and could be told to buzz off.
It’s like worrying about where the thief spent the money he stole from my wallet, ‘oh I can’t believe he went to louis vuitton instead of macys where they have better deals.’ That’s missing the entire point that theft is wrong in the first place. Once it leaves my paycheck I don’t care where it goes I just want my money back.
I say remove the people who are actually wasting the money, give them less power and scope. Don’t allow them the tools to print $14,000,000,000,000+, then we wouldn’t have to worry how much GS was bailed out for. If the fed budget was only $30,000,000, I wouldn’t care if every dime went to stippers, because my liability would be $0.10.
EmilianoZ – that’s a good point, we don’t have rule of law in this country anymore. It’s stupid to suggest that if we just passed another law, or reminded the overlords in congress to follow the constitution that all this bad stuff should happen again. It happens because we allow them the ability to do it. Take away that ability and they’ll do less damage.
Public Citizen is untrustworthy in its description of WTO committments, and this is no exception.