Why is Obama absent from Davos? On Jan 31, 12:19 am, "\"Lone Wolf\"" <[email protected]> wrote: > For the last 10 years the Socialis Equality Party (wsws.org) has > warned of the imminent finacial crisis and identified the US turn to > Militarism as result of the contradictions of capitalism that had > reduced the world's wealthiest country to the most indebted. > > Once again > > Gloom, perplexity, divisions dominate World Economic Forum in Davos > 31 January 2009 > > Some 2,500 representatives of the world's business and political > elite, including 41 heads of government and scores of cabinet > ministers, are attending the annual World Economic Forum, which opened > Wednesday in the Swiss alpine resort of Davos. This year's forum, > taking place in the midst of a global financial meltdown and economic > slump that have shattered the complacent verities about the > superiority of the "free enterprise system," presents a picture of > deep crisis and disarray among the leaders of world capitalism. > The mood that prevails, according to all accounts, is one of gloom and > foreboding. While it is generally acknowledged by the participants > that they confront the most serious economic crisis since the Great > Depression, the speeches and discussions have underscored the lack of > any agreement on the basic causes of the crisis or any unified > conception as to how it should be addressed. > The Washington Post quoted media baron Rupert Murdoch as saying the > participants were "depressed and traumatized," adding that "$50 > trillion of personal wealth" had vanished since the crisis worsened > last September with the collapse of the US investment bank Lehman > Brothers. > The Post went on to quote the billionaire hedge fund manager George > Soros, who said, "The size of the problem confronting us today is > larger than in the 1930s." > The World Economic Forum was first launched by its founder and still- > president, the Swiss economist and businessman, Klaus Schwab, in 1971 > in the midst of a mounting financial crisis that led in August of that > year to the collapse of the Bretton Woods System, the international > monetary framework, based on US dollar-gold convertibility, that had > undergirded the post-war economic expansion. In the ensuing years, the > forum developed into a semi-official gathering of business chiefs and > government officials that discussed and debated both international > economic and political issues. > In the more recent period, since the collapse of the Soviet Union, it > has become a venue to affirm the supposed triumph of the "free > enterprise system," with American investment bankers holding court, > surrounded by a small army of economists and media, complemented by > film stars and other celebrities. > One year ago, after the initial collapse of the US housing market and > eruption of the credit crisis, concern at the forum over these > worrisome developments, which had been almost universally > unanticipated, was tempered by assurances from American bankers and > politicians that the disorder would be quickly resolved and that, in > the worst case scenario, a US recession would be mild and brief. Most > of the discussion centered on the widely held notion that the problems > in US financial markets would not spread to Europe or Asia, due to the > phenomenon of "decoupling." > Robert Greenhill, the forum's chief business officer, set the tone for > this year's forum by declaring, "The meeting was founded at a time of > division and uncertainty in the 1970s and this year is a return to its > roots. People are coming to compare notes on what they need to do to > emerge from a serious crisis." > Just how serious and universal a crisis was underscored on the opening > day of the forum by the International Monetary Fund's downwardly > revised estimate of world economic growth for 2009 of a mere 0.5 > percent, including major contractions in the US, Britain, France, > Germany and Japan. That followed the previous week's IMF forecast that > world trade volumes would shrink 2.8 percent in 2009. Also on > Wednesday, the International Labour Organization warned that some 51 > million jobs could be lost worldwide this year. > The two dominant and interrelated features of this year's forum are a > general sense of shock and near-panic over the inexorable and rapid > manner in which the crisis has overtaken the efforts of central banks > and governments to shore up the banks and revive economic activity— > amounting to trillions of dollars in loans, guarantees and cash > infusions—and the devastating loss of American prestige and > credibility. > The Financial Times on Wednesday wrote: "Most notably, faith that a > mix of globalization, financial innovation and free-market competition > would build a better financial system has withered away, as bank > losses have piled up. Thus the critical question that now hangs over > this year's meeting at Davos is: ‘What, if anything, can replace this > creed?' " > Along similar lines, the New York Times on Friday quoted James > Rosenfeld, a co-founder or Cambridge Energy Research Associates, as > saying, "We've all been building this big, integrated financial > system. We didn't consider what would happen when it disintegrated." > As for the position of the United States, the opening day of the forum > was given over to Chinese Premier Wen Jiabao and Russian Prime > Minister Vladimir Putin, both of whom lambasted the US, without > directly naming the target of their attacks, for precipitating the > world crisis, and called for measures to lessen US dominance on world > financial markets. > Wen urged an expansion of regulatory "coverage of the international > financial system, with particular emphasis on strengthening the > supervision on major reserve currencies." He said the financial crisis > was "attributable to inappropriate macroeconomic policies of some > economies and their unsustainable model of development characterized > by prolonged low savings and high consumption, excessive expansion of > financial institutions in blind pursuit of profit." He also denounced > "the failure of financial supervision." > Putin was, if anything, more blunt. He attacked the concept of a > "unipolar world," called for an end to the privileged position of the > US dollar as the world's major reserve currency, and noted that "just > a year ago, American delegates speaking from this rostrum emphasized > the US economy's fundamental stability and its cloudless prospects." > He continued, "Today, investment banks, the pride of Wall Street, have > virtually ceased to exist. In just 12 months, they have posted losses > exceeding the profits they made in the last 25 years." > Alan Blinder, the Princeton economist and former vice chairman of the > Federal Reserve Board, responded, "The sad thing is that we might have > scoffed at this a while ago. But we really dragged the world down." > The Obama administration, for its part, signaled its disinterest in > any serious international coordination or financial regulation by > failing to send a single high-ranking official to the forum. While an > array of government leaders from around the world were in attendance, > including German Chancellor Angela Merkel, British Prime Minister > Gordon Brown and Japanese Prime Minister Taro Aso, none of the top US > delegates who had been advertised—chief economic adviser Lawrence > Summers, Treasury Secretary Timothy Geithner, National Security > Adviser General James Jones and chief of the US Central Command > General David Petraeus—showed up. > The virtual official boycott by the United States underscores the > bitter tensions and divisions simmering beneath the diplomatic decorum > of the forum. While general statements are being issued at Davos > abjuring protectionism, and warnings are being made about the > disastrous implications for the world economy of such policies, the > reality is a growth of economic nationalism. Less than a week before > the opening of the forum, US Treasury Secretary Geithner issued a > provocative threat of possible trade sanctions against China, accusing > the Chinese of "manipulating" their currency to obtain a trade > advantage over the US. > Steven Roach of Morgan Stanley Asia spoke at Davos of a "rising tide > of economic nationalism." And delegates from so-called developing > countries complained that the massive US deficits resulting from > Obama's stimulus program and bank bailouts would suck up the bulk of > available private credit on world markets. > "Large economies are accessing international capital markets for > themselves," said Trevor Manuel, the finance minister of South Africa. > Ernesto Zedillo, the former Mexican president who was in power during > that country's financial meltdown in 1994, said, "The US needs to show > some proof they have a plan to get out of the fiscal problem. We, as > developing countries, need to know we won't be crowded out of the > capital markets, which is already happening." > The New York Times cited Lord Adair Turner, the chairman of Britain's > Financial Services Authority, as voicing similar concerns, speaking of > "the risk of a new mercantilism" centered on credit availability > rather than trade. > These tensions erupted into the open on Thursday, when Turkish Prime > Minister Recep Tayyip Erdogan stormed off the stage after an angry > exchange with the Israeli president, Shimon Peres, during a panel > discussion on the Gaza crisis. Erdogan, whose government maintains > close political and military ties with Israel, told Peres, "When it > comes to killing, you know well how to kill." > The Davos forum underscores the impossibility of developing a rational > and coordinated international policy to resolve the economic crisis > within the capitalist framework of private ownership of the means of > production and finance and the division of the world between rival > nation states. Putin, speaking as a defender of capitalism, referred > to the financial parasitism that fueled the massive fortunes of the > financial aristocracy over the past three decades as a "pyramid of > expectations [that] would have collapsed sooner or later," and > indicated who is to pay the price for its collapse: "This amounted to > unearned wealth, a loan that will have to be repaid by future > generations." > Within the existing economic and political system, the only future is > one of increasing poverty and repression and the growth of national > antagonisms leading inevitably, as in the last great depression, to > the horrors of global war. > The specter haunting Davos is the emergence of an independent movement > of the working class fighting to put an end to capitalism and build a > socialist society based on the satisfaction of human needs, not > private profit. The disintegration of the world economy poses with the > greatest urgency the development of a unified struggle by the working > class on the basis of an international socialist program. --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum
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