the international financial system has failed to meet two obvious requirements: of preventing instability and crises, and of transferring resources from richer to poorer economies
What the fuck are you smoking, woman? What the fuck job is it of the financial system to prevent crises, and more especially, where the fuckety fuck did you get this insane idea about the banks having to do wealth redistribution? Jesus Hiernonymus Christ on a three-wheeled cycling device, I haven't such utter inanity since the last time I managed to fight my way through something from Polly's oeuvre.
even the periods of economic expansion have been based on the global poor subsidising the rich
Oh, come on. I'm sure you can find individual cases where this happens, mostly because some rent-seeking fucktard gets into bed with the government of the day and uses the tax income of the government for itself. But the reality of it is that sweatshops and the like are mutually beneficial to the actual residents of poor countries and the businesses that run them, even though they are abhorrent to the cliterati in the UK.
But given that what is worst for the residents of these poorer countries is that some rich corporate gets into bed with the government of said poorer country, what then is Oh My Ghosh's solution to this?
since private players will inevitably attempt to circumvent regulation, the core of the financial system – banking – must be protected, and this is only possible through social ownership.
Why? Because:
it enables public control over the direction of credit, without which no country has industrialised
That's right folks, in order to save the poor from rent-seeking corporate / government sodomy of the taxpayer, she wants to make it easier for the government to support the rent-seeking corporate!
But the most egregious stupidity in the article is this:
the belief that self-regulation supported with external risk assessment by rating agencies is an adequate way to run a financial system has been blown sky-high. There is no alternative, therefore, to systematic state regulation of finance
Banks and the finance sector in general are among the most heavily regulated industries their are. They are subject to all local (council) business regulations, national general business regulations, mountains of financial sector specific regulation, as well as masses of international regulation. The idea that banks "self-regulate" shows an astonishing lack of basic business awareness. And there is even more stupidity:
In the past six years, there has been a net flow of financial resources from every developing region to the north, primarily the US, even as global income disparities have increased.
Have the average wages in those poorer countries declined, then? Or are they just getting richer more slowly than the Americans? Every graph I've looked at, every bit of research I've read about globalization shows that poor countries benefit overall from the current system. There is a short period of sweatshops (shorter than Britain had to endure, for instance) and then there is a burgeoning middle class and people get to live lifestyles that even a jumped-up Guardianista could survive (albeit with a lot more whingeing.)
Sorry, Jayati, I rate your article as Epic Fail.
Now be a love and go an put the kettle on. If you can manage it.
Update: before everyone starts banging on about it, I know she's a professor of economics. But so is this cunt, and he's fucking useless, too.
Hat tip to the ASI for this one.
4 comments:
Quick lesson in DoubleThink:
1. Global free trade is bad because it reduces manufacturing wages in Developed Countries. So we need trade barriers to protect Our Jobs.
2. Global free trade is bad because we are buying stuff made in sweat shops by people earning a fraction of what Our Jobs were paying.
3. Ergo, preventing free trade is good because it keeps up wages in Our Jobs and also saves people in Third World having to work in sweatshops.
Y'see, each little bit is actually logical, except that they always miss out all the contradictions and inconvenient facts like:
4. Protectionism means that the price of goods in our shops will be higher, so everybody loses, especially those on lower incomes.
5. As a matter of fact, these sweat shops are no worse than working conditions in England a century or two ago, and certainly better paid than working in rice paddies and less risky than being a prostitute etc.
6. Wages in Third World are rising faster than wages in Developed World. So this is reducing inequality, and we are always told that this is a good thing, eh?
Hurrah for socialist thinking! Logic free, fact free and fun!
How are all those Chinese workers managing now that half of Southern China's massively overproducing toy factories are closed?
Are they happy that they no longer to work a 12 hour day for what is a pittance to us but a living wage to them or are they slightly unhappy that they now have no money at all?
She should go and ask them really.
She should go and ask them really.
I'd even chip in for some of the airfare. :o)
John Simpson, regardless of what you think of him personally, wrote tellingly on this.
He had reported on some dirt poor part of the world, where whole families earned their living by knitting silk rugs. The girls in particular worked very long hours.
After his report, word found its way to the western buyers of these rugs and the ensuing outcry led to trade from that part of the world being stopped.
He went back there a year or so later, and found that the girls were still working particularly long hours, only now as prostitutes.
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