Revolt of the Damned: The Bolivian Water Wars

Likely everyone has heard of the book Confessions of an Economic Hit Man, wherein the author John Perkins described his former career as convincing the political and financial leadership of underdeveloped countries to accept enormous development loans from institutions like the World Bank and USAID. Then saddled with debts they could not hope to repay, those countries were forced by the World Bank and the International Monetary Fund (IMF) to accept privatization of all natural resources and government functions as a condition for refinancing. Full disclosure: I did not read this book and have cribbed a bit from Wikipedia.

However, I have read the book The Best Democracy Money Can Buy by Greg Palast, investigative reporter extraordinaire, who came into possession of documentation of the concealed objectives of the World Trade Organization (WTO), the World Bank, and the IMF. I adopted the title of this post from a sub-section title in Chapter 4 of Greg's book. And here below are some selected passages from The Best Democracy Money Can Buy:

      So I thumbed through my purloined IMF "Strategy for Ecuador" searching for [something else]... Instead, I found a secret schedule. Ecuador's government was ordered to raise the price of cooking gas by 80 percent by November 1, 2000. Also, the government had to eliminate twenty-six thousand jobs and cut real wages for the remaining workers by 50 percent in four steps and on a timetable provided by the IMF. By July 2000, Ecuador had to transfer ownership of its biggest water system to foreign operators, then grant British Petroleum rights to build and own an oil pipeline over the Andes.
...
      Officially, the WTO assures us that nothing threatens the right to enforce laws in the nation's public interest. But that's not according to their internal memo, where the WTO reports that trade ministers, in the course of secretive multinational negotiations, agreed that, before the GATS [General Agreement on Trade in Services] tribunal, a defense of "safeguarding public interest ... was rejected."
...
      One of the key aims of the GATS treaty is to turn publicly owned water services over to private enterprise. Governments have built a trillion dollars in piping systems workd wide, with no intention of turning a profit. ... But water was cheap stuff -- foolish governments seemed to give the stuff away, just covering the cost of pipes. Higher prices would make markets in water possible, and lure entrepreneurs to the spigots.
      Public water was first sold off to corporate operators in England. Prices jumped 250 percent and watering English gardens has, at times, been criminalized. The English, as they do, grumbled, then shrugged, then paid. Meeting no resistance, the water privateers marched on to Egypt, Indonesia, and Argentina. But when they reached Cochabamba, Bolivia, something happened that the water barons did not expect. The thirsty poor resisted. In the end they payed, too -- in blood.

With the above as background, I hope that you will be motivated to sit through this stirring segmenent of yesterday's edition of Democracy Now! with Amy Goodman.


If you do watch the above and would like to watch more, there are two follow-on segments that you can play by clicking these links:
http://www.democracynow.org/2010/4/19/the_cochabamba_water_wars_marcella_olivera
http://www.democracynow.org/2010/4/19/bolivian_un_ambassador_pablo_solon_on

Here's a Blog I Haven't Been Following but Certainly Will Be Henceforth!

Saturday, February 6, 2010

The OTHER Reason that the U.S. is Not Regulating Wall Street

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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