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w.d.    Banking for the poor, Grameen, Muhammad Yunus
19 Oct 10   A Congress of Children, Washington Times, Richard W. Rahn
12.Okt 10   Willkommen in Utopia, Format, Martina Madner et al.
10 Sep 10   Providing legitimacy in the opaque QI world, Cambridge economic crime symposium, Anton Keller
23.Aug 10   Zu gross, um nicht unterzugehen, Wegelin-Kommentar #272, Konrad Hummler
23 Aug 10   Too big not to fail, Wegelin comment #272, Konrad Hummler
23 aou 10   Trop gros pour ne pas faire faillite, Wegelin commentaire #272, Konrad Hummler
23 ago 10   Tropo grandi per non fallire, Wegelin bollettino #272, Konrad Hummler
13 Aug 10   Big, bad numbers, Daily Reckoning, Bill Bonner
4.Jan 10   Ein Blick auf heute aus der Sicht in 20 Jahren, Finews.ch, Anton Keller
15 Oct 09   Statement on the Release of LIFG Jihad Detainees, GICDF
24.Aug 09   Abschied von Amerika, Wegelin-Kommentar #265, Konrad Hummler
24 Aug 09   Farewell America, Wegelin comment #265, Konrad Hummler
24 aou 09   L’adieu à l’Amérique, Wegelin commentaire #265, Konrad Hummler
24 ago 09   Goodbye America, Wegelin bollettino #265, Konrad Hummler
29 APR 09   Global Financial Crisis - Lessons for Asia, bigdogdotcom.wordpress.com, Mahathir Mohamad
10 Nov 08   Global financial uncertainties and the future of Malaysia, peacefoundation.net, Mahathir Mohamad
26 Dec 05   Nobel Winner Yunus: Microcredit Missionary, Businessweek, Bloomberg
2003    Malaysia's 1998 currency controls: background, implications & lessons, University of Malaysia, K.S. Jomo
18 Oct 02   Malaysia's Mahathir: Back to Production, Dump Globalization, EIR Gail G. Billington
6 Oct 02   Renewing Asia's Foundations of Growth, EIR, Mahathir bin Mohamad




Executive Intelligence Review EIR
October 18, 2002

Malaysia's Mahathir:
Back to Production, Dump Globalization
by Gail G. Billington

Malaysia's feisty Prime Minister, Dato Seri Dr. Mahathir bin Mohamad, challenged 800 distinguished guests, speakers, and captains of industry, attending the East Asia Economic Summit 2002, Oct. 6-8, in Malaysia's new capital city Putrajaya, to abandon the "ideology" of globalization and return to physical economics—the economics, he said, of "producing things." Representatives of 33 nations came together at the three-day conference, sponsored by the same World Economic Forum which hosts the elite annual Davos conference. Dr. Mahathir's speech, excerpts of which are printed below, took up the foremost issues confronting nations of the world today: the preparations for war, led by the utopians in President George W. Bush's Administration; the ill-defined threat of global terrorism; and the impact of both in feeding the threatened blowout of the world economy.

In launching such a "produce, stop financial speculation" polemic, Dr. Mahathir echoed the resolution passed by the Italian Parliament for a "new global financial architecture," which EIR founding editor Lyndon LaRouche initiated in direct discussions with those legislators. On the final day of the Putrajaya conference, Oct. 8, the Italian initiative was featured in Malaysia's "newspaper of record," the New Straits Times, as the lead letter to the editor by scientist Mohd Peter Davis, who highlighted LaRouche's initiating role in the fight for a New Bretton Woods conference.

Three weeks earlier, in his keynote address at the Asian Global Leadership Forum in Pangkor Laut, Malaysia, Mahathir had called for a renewed global commitment to economic infrastructure development as key to peace, because it has multiplier effects which generate expanded and more productive economic activities. He specifically proposed that 1% of multinational corporations' tax liabilities be given to a world infrastructure development fund.

Educating President Bush
Dr. Mahathir, Deputy Prime Minister Abdullah Ahmad Badawi, and Foreign Minister Syed Hamid Albar have gone to great lengths to improve Malaysia's ties to the United States, which had gradually recovered from then-Vice President Al Gore's grotesque attack on Malaysia's leader during the 1998 meeting of the Asia Pacific Economic Cooperation Forum in Kuala Lumpur. In May 2002, Dr. Mahathir visited Washington on his third state visit, followed in September by Badawi, who has been designated as Mahathir's successor when the long-serving Prime Minister retires in the Fall of 2003. Albar accompanied both leaders.

The Bush Administration's war on terrorism has created difficulties for Malaysia, in particular, as for all Muslim nations and populations, in what is seen as a targetting of a faith embraced by one out of five people on Earth. Malaysia's unquestionable political and economic success, in a multicultural nation of Muslims, Chinese, and Hindus, should suggest that its leaders have useful insights to share. And, by general consent, bilateral relations improved as a result of these state visits.

Nevertheless, the reported tough discussions between Badawi and Vice President Richard Cheney and National Security Adviser Condoleezza Rice, ran up against the irrationality of the Bush Administration's anti-terrorism campaign, exemplified in the rude and intrusive searches of the three Malaysian senior officials at U.S airports. Also, recent changes in U.S. and Canadian immigration laws have caused disruption, if not outright suspension or cancellation of education for hundreds of Malaysian students, and cast the sinister implication that Malaysia tolerates, or is complicit, in harboring terrorists.

Mahathir told 40 journalists attending the East Asia Economic Summit, that removing Iraq's President Saddam Hussein from power and bringing democracy to Iraq would not solve problems affecting that country, nor tackle international terrorism effectively. He said President Bush was taking the wrong approach in fighting terrorism because Americans were angered by the Sept. 11 attacks, and angry people usually do not think rationally. Fighting terrorism requires rooting out its causes, he said, and in Malaysia's historical experience of combatting terrorist insurgency, citizens who feel they have a stake in the country, eventually abandon their fight.

*          *          *

'Renewing Asia's Foundations of Growth'

The following are excerpts from Prime Minister Dr. Mahathir bin Mohamad's speech
to the East Asia Economic Summit in Putrajaya, Malaysia, Oct. 6. A subhead has been added.

World War II and the Pacific War were, economically speaking, disastrous for everyone. At the end, both the victors and vanquished were devastated and impoverished. . . .

Mindful of the negative results of punishing the defeated by forcing them to pay reparations, the victorious U.S. and its allies set out to resuscitate the world's economy including those of their late enemies.

While those who were allied to the victors were positively helped through the Marshall Plan, the principal enemies were indirectly helped to recover and to rebuild. Japan in particular gained tremendously from the lessons they got from the former American enemies. . . . The fact is that the victors allowed and even helped the defeated enemies to recover. . . .

Trade needed a proper International Financial System. At Bretton Woods, the international community decided on pegging currencies to gold so as to ensure the values of currencies are properly backed.

It was a caring world anxious to rebuild a new world from the ashes of war. Colonies were freed one by one and allowed to rule themselves any way they like. It was in this atmosphere that the countries of the world recovered, became prosperous mainly through the production of goods and services and commodities traded across the world and within each country. . . . The old manufacturing giants regained strength and grew, while new giants appeared on the scene, notably in Germany and Japan. . . .

By the 1960s, the whole world seemed set to prosper. The outlook seemed even better when the Communist system collapsed and the Cold War ended. Now everyone could focus on economic growth without being bothered by ideologies and blocs. But unfortunately, it seems that some among the victorious capitalists saw little need to curb their avarice anymore. . . . There was no more "other side." The winning side was free to exploit the world without restraint. . . .

And so in the 1970s, pressure was applied on countries to go off the Gold Standard and the fixed exchange rate. Henceforth the market, i.e., the currency traders, would determine the rate of exchange of currencies. . . . A new business developed to help business deal with the uncertainties of the exchange rate. For a fee, the businesses could hedge. . . . Meanwhile the production of goods and services continued. Some failed, and along came the early saviors of failed businesses. They simply bought the businesses, stripped them of their assets and left the minority shareholders gasping. . . .

Then came the junk bond peddlers. . . . Some great names appeared on the scene, dealing in junk bonds and ripping off huge profits. Again the authorities stepped in and some notable traders ended in the chill.

But the itch to make quick profits gave birth to new ideas. Short-selling shares was one of them. It was speculation at first, but when it became manipulation, some countries disallowed short selling. . . . By then the interest had moved almost completely away from the performance of business, i.e., the profits, the assets, and the potentials. The only thing that mattered was share appreciation or capital gains. . . .

Then someone thought of the idea of cornering the currency market. It was costly, but hedge funds had made arrangements to have huge sums at their disposal and even more that they could leverage from the friendly banks. And so began the rampage of the currency traders. Any country was fair game, but most of all the newly emerging economies, rich enough to be fleeced, but not powerful enough to fight back. . . . Perfectly good countries with enormous resources can be truly and really bankrupted.

All the while these countries were condemned for their incompetence, their corruption, their cronyism, etc. The currency traders who sold down the currencies of these countries were never blamed. Indeed they became great philantrophists. . . .

Look at the world today. It is not the prosperous, growing world of the post-war years, especially of the sixties to the eighties. It is a world of economic malaise. Even before Sept. 11, the downturn was already evident. The dot.com companies precipitated this. . . . The fact is that we are not doing business anymore, real business that is. We are not producing goods and providing services. . . . What the world is interested in today is quick money, money that comes from speculation and manipulation; overnight money. The greedy have taken over the economy of the world. . . .

National Governments No Anachronism
If the Asian economy is to be revived, Asians must look beyond their continent. They must help bring about a return to sanity. They must do so by ganging up against the greedy who are already shaping the world's economy and finance through the World Trade Organization.

We need to relook very closely at the interpretation of globalization. . . . We should resuscitate real business, the business of producing things, of providing service. Money should be invested in this and not in buying and selling shares alone or in speculation and manipulation of currencies. . . .

Even in the handling of modern terrorism, we are not doing well. Today, a year after Sept. 11, 2001, the situation is really worse than immediately after. . . .

We don't seem to be doing the right things. If I may say so, the world has lost its way. The Malays . . . have a saying, "When you lose your way, go back to where you started." We need to go back to the status quo ante, to the good years of the world's growth, to the '60s, '70s and '80s. We must not be afraid to admit that we have gone wrong, and go back to doing real business. Stop the quick profits of asset-stripping, of short selling, of speculation and manipulation of currencies, of monopolizing world business, of the efficacy of size. If we cannot stop them completely, regulate them.

Governments have not become anachronistic. . . . They have a good incentive to do the right thing by everyone, including the very poor, simply because, democratic or authoritarian, they know they will be thrown out if they don't care for the people's welfare. . . .

Do business, real business. Stop the gambling on the share market and the currency market. Use the stock exchange as a place for raising capital, not making quick profits. Stop preaching to others. Stop examining the shoes of hundreds of millions for the hundred or so terrorists, but look instead for the causes which move normal family people, to blast themselves to smithereens, and eliminate the causes.




peacefoundation.net    November 10, 2008

Global financial uncertainties and the future of Malaysia
by Tun Dr. Mahathir bin Mohamad, former Prime Minister of Malaysia, November 2008
at forum organised by the Perdana Leadership Foundation and the Putrajaya Holdings Bhd

I would like to thank the organizers of this “Bridges - Dialogue Towards a Culture of Peace” for inviting me to speak on the “global financial uncertainties and the future of Malaysia”.

How the global financial crisis came about

For some time now the world has been facing a financial crisis of unprecedented proportions. The crisis has become truly global and is clearly leading to a worldwide recession far worse than that experienced in the late 1920’s or before that. Huge banks and financial institutions have collapsed and are dragging down with them other major businesses. Even the small businesses have not been spared.

The enormity of the situation can be gauged by the total sum of money which the Federal Reserve Bank and the American Government have allocated to rescue banks, insurance companies, mortgage companies and hedge funds. The sum is US 8.5 trillion dollars - eight thousand five hundred billion. We cannot really imagine the existence of this amount of money; certainly not all of it in one place.

How come such an enormous amount of money could be lost by the banks and other financial institutions without us knowing anything about it until it is clearly upon us?

The answer is really very simple. There have been massive cover-ups by the institutions and the United States Government of the losses until they became too big to hide under anything.

The cover-ups have been going on for a very long time – maybe more than 30 years. It began in the banks and institutions themselves. The CEOs of these institutions kept on telling their clients and the public that everything was all right, that they had the money to make good the losses, that it was all a misunderstanding, that it was temporary, that everything was secured.

All the while the losses were accumulating. But the books were not showing them. There was a lot of creative accounting and losses could often appear as gains. And these fictitious gains were credited to the genius of the CEOs and CFOs. They should be rewarded. And they were rewarded with millions and millions of dollars in bonuses and stock options.

These geniuses were often literally bought by other banks and institutions so they may benefit from their expertise in cooking the books. And why not? The investors were getting good, extraordinarily good returns on their investments.

When you get a return of 10, 20 or 30 percent, why should you scrutinize the running of the company? Just collect the dividends and invest more.

And when you can get such returns from investing in these financial instruments, why should you invest in the production of goods and services where the dividends would be 5% or less?

Very soon the business of producing goods and services and the trade in these represents only a fraction of the business in financial instruments. It is said that the trade in currencies for example is twenty times bigger than the total world trade. And the profits are equally big.

Millionaires appear by the hundreds every year, and billionaires by the dozens. Yachts and private jets became very common. And everyone thought this was going to go on forever.

But we know now that it is not forever. We know now that the bubble has burst with a bang that reverberates throughout the world. The great banks are collapsing like a house of cards and rich countries are going bankrupt. And we all ask why.

Why? It began with the de-linking of money from gold. It began with fiat money. Basically these are paper tokens, with no intrinsic value at all. We never question how these pieces of paper can have a value. We never ask who has been printing these notes. We do not ask how the printers determine how much notes they should print. We all merely accept them as money.

In most countries Central Banks owned by the Government would print the money. We assume Government would control how much is printed so as to avoid devaluation and inflation.

But in the United States of America, the richest country in the world, the money is printed by a private bank. The Federal Reserve Bank is owned by twelve other private banks. The Fed prints the money and actually lends the money to the Government. Yet, the world accepts these basically private bank notes as the reserve currency for all countries, as the currency used for international trade.

At one time banks like the HSBC and Chartered Banks actually issued their own banknotes. But today it is not really necessary, because effectively cheques represent money. So can credit cards. How many cheque books or credit cards are issued the public does not know. But these are money also. In some very advanced countries no one carries cash anymore. They pay for everything with credit cards. So credit cards are a form of money.

Money in the form of currency notes or cheques can be deposited with a bank and cheques can be made out to be drawn on the bank, when payments are to be made. When cheques are paid in, the money appears in the accounts of the payer. He needs not withdraw money to pay for anything. He merely makes out a cheque to the amount.

We all believe the banks business is based on the capital invested and the deposits taken. We think that the money lent by the bank comes from its capital and the money deposited with it. But actually what the bank lends is far more than the sum total of the capital and the deposits.

In a well regulated situation the amount that a bank can lend is limited by the Central Bank. But actually a bank can lend as much as 10 times the money deposited with it. Since, except with a fixed deposit, the deposited money costs the bank nothing, in fact may actually earn for the bank a service charge, the earnings of the bank on the deposits comes at no cost. If it can lend 10 times the deposited amount, then its interest earning must be on 10 times the deposited amount.

The bank is therefore a money making institution even when supervised.

But then came the idea of free markets and deregulation. The market would regulate itself and the Government should not interfere. Once this was accepted the crooks moved in. Since the earnings of the bank are directly related to the size of the loans, then banks should try to lend as much as possible, whatever the capital or deposits they have.

What if the loans turn sour? The geniuses devised a way of securing the loans. The good loans and the bad loans are bundled together and insured. The investors in the banks, principally the hedge funds, need no longer worry about non-performing loans. If they fail to perform, the insurance companies will make up the loss. Besides, in the case of housing loans the houses would serve as collaterals. If the loan goes bad the collaterals can be sold off and the loans recovered, if not wholly, at least partially.

There would not have been any problem, except that the amounts of loans were enormous. The borrowers run into millions, and the total sum of nonperforming loans add up to billions.

When these sub-prime loans failed, the insurance companies could not pay the huge amounts due to be collected by the banks. And when the housing market failed, the collateralized properties could find no buyers.

Unable to recover the loans given out, the banks went bankrupt. The share prices of the banks plummeted. The hedge funds which had invested a lot of borrowed money in the banks, found themselves unable to repay the huge loans (20 times the size of the investments they had taken) which they had taken. The banks, which had lent money to the hedge funds, lost all their money.

Added together the losses by the banks, the insurance companies, the mortgage companies, the hedge funds, the lenders to the hedge funds come up to trillions of dollars.

When one bank experiences a run, other banks may come to its rescue. But when all the biggest banks fail simultaneously, no other banks can rescue them. The Central Banks of the Government, the printers of money may be able to bail out the bankrupt banks and institutions. The problem with printing currency notes to bailout on such a scale is inflation. And inflation must lead to recession.

Recession for one country is bad enough. But when the whole world goes into recession, the problem is nearly impossible to resolve. Certainly no one country can resolve it. A world recession must be resolved by the world acting in concert.

The future of Malaysia in the face of a worldwide recession

What is the future for Malaysia in the face of a worldwide recession? It is very difficult to predict with any degree of accuracy, but certainly what happens to Malaysia must be determined by the degree of its involvement with the world’s economy. The greater the linkage the more serious will be the problem and the more gloomy the future of the country.

We know that Singapore has felt the adverse effect of the present international financial uncertainty more than Malaysia. This is because Singapore is a financial center and is much involved with investments in hedge funds and other financial instruments. It has too much money with too few opportunities within the country to invest. The developing countries provide too few investment opportunities. So, much of Singapore’s money is invested in the rich countries. And we now know that the rich countries have been really badly managed, especially financially. So, Singapore has to pay a price for its confidence in the free market and in money making more money.

At the other end of the spectrum we see a number of countries which have been sanctioned by the powerful and rich countries of the world. They have hardly any involvement in foreign investments, certainly not in financial instruments and funds. The financial turmoil would not affect them as badly since they have become insulated though the sanction etc. But still they will be faced with some relatively minor problems.

We may say that Malaysia is a country in between the two examples mentioned. We have not been great investors in foreign funds or even in the foreign industries which are collapsing. But we are a trading nation, and for a trading nation the sufferings of its trading partners cannot but affect it adversely. We are going to find our trading partners unable to pay, partly because their banks are bankrupt and partly because their countries’ recession must affect their buying power and their priorities when they buy. Our trade must therefore diminish, and this will affect our industries and jobs for our workers.

This is the environment in which Malaysia will have to function and which it will have to handle. How it handles this environment will determine its future.

The last time Malaysia had to face a financial crisis, its economy went down the way other countries did. The people became poor suddenly, and the growth became stunted. It seemed like it would have to borrow from the IMF and surrender itself to IMF dictates. The result would be a less independent country with no certainty of recovery as the IMF loan was for settling Malaysia’s foreign debts and not really to help its economy to recover.

It therefore chose not to seek IMF and World Bank “help” because Malaysia had to continue with its New Economic Policy. We did not think the IMF would be interested in our principle objective of correcting the economic imbalance between the races. They believe in competition in which the losers should be put to death like the gladiatorial fighters of old. Such an attitude would increase the ill feelings and tensions between the races, would in fact lead to racial clashes and instability for the country. And the instability would have an adverse effect on the economy.

Today Malaysia has joined other countries in the region in being politically unstable. For 50 years political stability was what attracted investments, both foreign and local. Now a weak Government has tried to regain popularity by pandering to the demands of the extremists and the naïve. The floodgates have been opened and all kinds of sensitive issues are being publicly debated.

The result is not the kind of liberal society that such a policy was supposed to bring. The result is the resurgence of racism on the part of all the ethnic groups.

In this atmosphere the Government will find it difficult to handle the oncoming financial and economic instability. The fear of political repercussions will prevent the Government from taking decisive, if unpopular, measures.

Admittedly, the crisis is not the easiest problem to handle. But if confidence is to be restored, the Government must be seen to be serious about handling it. Making a few billion dollars available is not the total answer. There is a need to identify the problem areas, to understand the underlying causes and to devise plans of actions to counter them.

Actually, Malaysia is cash rich. It has huge savings, and its reserves exceeded the statutory requirement. Its economy is made up of both the production of raw material and commodities and the manufacture of goods.

Its growth remained quite steady during the early period of the downturn, because commodity prices were very high, and they were able to sustain high export earnings despite a decline in earnings from exports of manufactured goods.

I have no figures to support the statement, but our export used to consist in value terms of 82% of manufactured goods and 18% of commodities. But when the prices of crude oil went up from USD 30/- to USD 140/-, while palm oil went up from less than RM 1000/- to RM 4,500/-, the export earnings from commodities must be a major contributor to the  100 billion USD of Malaysia’s export earnings in 2007 and first half of 2008.

But now we are seeing the prices of commodities making a steep dive with crude oil down to about USD 50/- and palm oil to RM 1500/-. Our export earnings must take a beating. It is likely that the trend will continue.

In the meantime exports of manufactured goods will not be rising, but are likely to decline.

FDI has not been flowing in either. Although there have been a lot of proposals, nothing much is seen on the ground. The Arab proposal to invest in Wilayah Iskandar may not materialize nor will the other corridors see any real contribution to growth.

The reason is simple enough. Worldwide there has not been much FDI lately. But for corridors or regional development to take place, the infrastructure in terms of roads, railways, water supply and electricity must be assured. Sites for industries must also be identified and be well prepared. We do not see anything of these developments either.

Generally infrastructure projects have been neglected. It must be noted that these projects are not only necessary to support growth, but they also create business opportunities and jobs for the people. Sadly, we are told many of the projects have been overpriced and there is a likelihood that much of the money will not go into real construction. This will mean the contribution of such large Government expenditure towards economic stimulation would be minimal.

This is the future that Malaysia is likely to experience if we go by the present economic scenario in the country and internationally. But the future can become brighter if the economic and financial crisis facing the world and their effect on Malaysia are better managed.

This crisis is extraordinary, and the scale is enormous. The world has never seen anything like this before, not even during the Great Depression of 1929 – 31. The great financial institutions and banks survived in 1929 – 31, but we are seeing them falling like nine-pins this time.

For Malaysia to handle the effects on the country the crisis must be carefully studied and understood. Certainly we must know why and how they happened and how they affect us.

This crisis is largely Man-made. It is the result of greed being allowed to abuse the systems. This is what happens when the Government abdicates its regulatory role and slavishly accedes to the demand of the bankers and financers to leave the market to the market. The signs of a breakdown were seen early, but such is the faith in the market regulating the market that the free market Governments took no notice and did nothing.

Fortunately, Malaysia has always been conservative and has not taken to the idea that the Government should not interfere with the market. As a result much of the market activities in Malaysia have remained subjected to regulations.

So, Malaysia should be in a better position to counter the effects of deregulation.

Now the Government must look into playing a bigger role in the economy. But it should also be judicious. If it controls too tightly, business will not be attracted or it will fail, strangled by Government regulations.

In any case, deep knowledge of the aetiology of the crisis will help the process of identifying the effect on Malaysia’s economy and finances and perhaps help formulate a plan for tackling or mitigating the fallouts from this, the greatest financial crisis ever.

The world has yet to acknowledge that this financial crisis needs a global solution. It needs a revision in the banking system and the monetary system. It may even need a totally new system developed with the interest of all the countries in the world.

Malaysia may be able to lessen the effects on the country’s economy, but until the world succeeds in devising new systems for banking and international monetary regime, all solutions will only be cosmetic.




bigdogdotcom.wordpress.com
29 APRIL 2009

The Global Financial Crisis of the 21st  Century -
Lessons for Asia     (emphasis added)
by  TUN DR MAHATHIR BIN MOHAMAD
at the National School of Development, Beijing University, China


Dr Mahathir bin Mohamad and his hosts at the National School of Development, Beijing University

1.    Firstly I would like to thank the National School of Development of Beijing University for this invitation to speak on the subject of the Global Financial Crisis of the 21st Century – Lessons for Asia.

2.    I must admit that I am not trained in finance and not even in economics. I am a doctor of medicine. My little knowledge about finance and economy came through my serving as the Prime Minister of Malaysia during which time I had to handle many financial crisis, the worst of which was the 1997-98 currency crisis. To handle that crisis I had to ask a lot of economists and financial people a lot of questions and of course I had to read a lot on the subjects.  However not being from any economic school or financial institution, I was not constrained by the theories that are taught in such places. I could therefore strike out on my own and also do unorthodox things.  Unfortunately I am not too familiar with the technical words which those learned in the subject use and I hope you will recognise the words I use instead.

3.    I am afraid my views on the present crisis are also unorthodox as they are the results of my untutored mind analysing what is happening.

4.    We talk of the Global Financial Crisis of the 21st Century. But of course just as the 21st Century is a continuation of the 20th Century and before, the financial crisis is a continuation of the crisis we saw in the 20th Century and those before that. In fact the crisis originated from the systems formulated in the 17th and 18th centuries, almost exclusively by the Europeans.

5.    The present crisis had its beginnings in the faulty systems devised for banking and finance in the 1700s. When it became impractical to use coins for payments due to their bulk and weight, paper money was introduced. Paper money has no intrinsic value. At first it was backed by precious metal like gold. Then Governments decided to go off gold. The paper money then became fiat money whose value was supposed to be guaranteed by Governments.  But after the market was allowed to determine the value of money, the Government could no longer guarantee the value.

6.    Unlike gold there is nothing to limit the issue of paper money. It was assumed that Governments through the Central Banks would exercise control over the printing of paper money.

7.    But in America and in Britain until recently the central banks were privately owned. To compound the risk of too much currency being issued banks were actually allowed to create money, supposedly up to 10 times what they have on deposit and capital.

8.    What this means is that banks can lend more money than they have. Imagine a business in which the companies can sell more goods than they have. There would be chaos.  It would not be business at all. The companies cannot deliver what they have sold. The customers would feel cheated.  But banks can lend more than what they have because they can create the money out of nothing. Apart from paper and ink there would be no raw materials needed.

9.    Besides cheques were invented to represent money. Any amount of value can be written on the cheques and the banks can lend or accept the amount as written on the cheques. If someone borrows 10 million dollars it would really be impossible for the borrower to  carry away 10 million dollars in paper money. They use cheques for this amount. Of course when dealing with a hundred million, a billion, or a trillion dollars, only cheques can represent this amount. No cash would be involved.  When billions of dollars are given in bailouts no cash are involved.  No money needs to be printed.

10.    Although banks may lend 10 times more than the money they have, what is to prevent them from lending much more than this. And so the big American banks began to lend far more than 10 times. Very often they disregarded the ability of the borrowers to pay so that they could continue lending.  For the banks their loans were regarded as assets in their books. The more money they lend, the bigger is their assets.

11.    This is what led to the sub-prime problems. As the credit worthiness of their borrowers is not prime, the non-performing loans in the bank books started to balloon.

12.    But to take care of this the banks decided to sell loans for housing to the insurance companies and the secondary mortgage companies like Fannie Mae (Federal National Mortgage Association) and Freddie Mac (the Federal Home Mortgage Corporation).

13.    Originally set up and owned by the United States Government, Fannie Mae and Freddie Mac are now privately owned but still enjoys Government support and privileges. They have access to cheap funds with which to finance their purchase of the mortgages undertaken by banks.

14.    Their operations were not overseen by Government agencies and very quickly their purchases of the mortgages ran into billions of dollars.

15.    When the housing loans by banks went bad, not only the banks and the insurance companies but Fannie Mae and Freddie Mac also could not recover the loans they had given to the banks.

16.    Thus the collapse of the sub-prime loans pulled down not just the banks but the insurance companies like AIG and the mortgage companies like Fannie Mae and Freddie Mac.

17.    But the banks were not lending just for housing, they were also financing hedge funds and currency traders. These funds were allowed to borrow as much as 30 times the money invested with them. The banks loaned them this money out of the money they created not out of the cash they held.

18.    The assumption was that if for a million dollars invested in the funds, they can actually invest 30 million dollars, the return on 30 million would be so big that the million dollar investor would get much more than he would expect if he were to go into the market to buy the one million shares himself.

19.    The fund managers would of course take their cut after paying the interest on the bank loans. Again their cut on 30 times the invested money would be very considerable.

20.    It was believed that investments in hedge funds and currency trading could never fail. The investors would get as much as 30 per cent return on their investments instead of the small interest on fix deposits or even the smaller returns from dividends paid to shareholders.

21.    Millions of investors put their money in hedge funds and currency trading. It is estimated that 8000 hedge funds handle as much as 620 trillion dollars while the trade in currency was 20 times bigger than was world trade.

22.    The sums are really enormous and the profits likewise. The investors numbering millions in the United States and Europe and some in Asia became millionaires, owning yachts and private jets. They contribute greatly to the high per capita incomes and Gross Domestic Products of their country. It is estimated that their contribution to these wealth indices amount to about 40 per cent.

23.    But the investment by the hedge funds are not always profitable. Just as their profits would be 30 times more than the investments they manage, their losses too can be 30 times more than when investing in the original sum invested with them.

24.    And when the loss occurs there is no way they can pay back the banks.  The classic case was when the hedge fund LTCM (Long Term Credit Management) collapsed totally; losing billions of dollars of the money they had borrowed and invested.  They could not pay the banks.

25.    It would seem that no matter which financial institutions or funds got hit, in the end the banks would be affected.  And when the banks are affected all businesses would be affected. They would not be able to borrow enough money for capital or operations or payments. The banks would make margin calls when they get into trouble and when the borrowers fail they too would be unable to operate and to make money.  They can be bankrupted and forced to close down.

26.    The failures of the businesses would bring down the stock market which in turn would affect the businesses. In the end the whole economy would suffer and there would be a recession.

27.    When such countries go into recession, the countries which depend on them as markets will also be dragged down.  That is why the whole world has gone into recession or at least experience lower growth.

28.    Why did all these things happen? Mainly it is because of greed and too much power being given to the banks to create money. Then there is this idea of free trade which is interpreted to mean freedom from Government supervision. Without Government supervision the players would abuse the systems.  They would be motivated purely by greed.

29.    This has been going on for decades. The great recession of 1929-1930 was due to the same kind of abuses. After that there were abuses which led to minor crisis and recessions usually of the poorer countries.

30.    When the abuse involves only a bank or a few banks or a single hedge fund, Government would step in to cover up. As a result the failure of the systems and the abuses were not noticed.  It seems as if the systems were working well.

31.    But the failure of the sub-prime loans for housing was so huge that neither the banks nor the Government could have a cover-up operation. The banks just cannot balance their accounts. Once the banks’ losses were made known, those institutions and funds which were linked to or dependent on banking business were also exposed.  Their losses proved to be equally enormous.

32.    Initially there was an attempt to hide the true amount. Thus it was considered that a few billion dollars in bailouts would be sufficient to achieve recovery. But once the full extent of the abuses were revealed the figures shot up to trillions of dollars. Simple bailouts are no longer adequate.

33.    In 1997-98 when Malaysia experienced its crisis we resorted to bailouts. But the collapse of the banks and the businesses were not due to their abuse of banking practice. It was due to external factors – namely the devaluations of the currency by currency traders.

34.    The economic environment was still largely intact. It was still possible to do business if the banks had enough money to lend. So when the Government recapitalised the banks, the banks could recover through normal business and pay back the money to the Government.

35.    This time the losses are huge and are due to the banks themselves abusing banking privileges. It is not possible to recover the money lost through doing normal business. It would not be enough to pay back the bail-out money.

36.    The loss can only be recovered if the banks are allowed to resort to the abuses they were indulging in before. Since they cannot be allowed to do this they will not be able to recover the huge sums they have lost. They would forever be indebted to the government.  In fact the Government would own them.  This is of course socialistic and not capitalistic.

37.    Bailouts would therefore not be able to achieve recovery of the economy. Certainly there is no way for returning to the status or conditions prevailing before the crisis.  The rich countries must accept that they would become poorer, or at least not be as rich as they were before.

38.    Again I would like to cite the experience of Malaysia. By 1999-2000 the crisis was over i.e. we were no longer troubled by the deliberate devaluations of the Malaysian currency. But the Malaysian currency did not recover fully.

39.    At the time when the crisis hit us in 1997 the exchange rate was 2.5 Ringgit to one US Dollar. It went down to 5 Ringgit to one US Dollar at its peak. Now the currency is stabilised at 3.8 Ringgit to one US Dollar.

40.    This means that our per capita and GDP in US Dollar terms is lower than what it should be if our Ringgit went back to 2.5 per US Dollar.  The per capita today is 6000 USD.  It should really be 9000 USD if the rate is 2.5 per USD.

41.    It will be the same for the US, Britain, the European and Asian countries affected by the crisis. Indeed the GDP and per capita of the whole world will remain down. We would all be poorer because of the crisis.  Real recovery i.e. to be back to the status quo ante will take a very long time. In fact we would have to grow at one and a half times the pre-crisis rate to recover fully.  This is unachievable.

42. What can be done now is not to bail out the failed banks and companies. They should be allowed to go bankrupt. The bailout money should go towards compensating the people who had trusted these institutions, though not for them to recover their losses completely.  With purchasing power partly restored they would be able to keep the new banks and businesses profitable.

43.    Other people should be allowed to start new banks, maybe with Government support. The new banks must be allowed less liberty to create money. Their business must be subjected to Government scrutiny. They must not be allowed to set up subsidiaries in tax havens. Their accounts must be submitted to the Central Banks which must all be Government owned.  They should be confined to financing real businesses and trade.

44.    Mergers and acquisitions in order to become big and so dominate the business must be subject to laws like the anti-trust laws.  Big companies are prone to practicing monopolistic business.  And as we have seen they are very prone to abuses by their managements and employees.  Their power tends to deter Government examination of their activities.

45.    Currency trading should be limited to financing trade. There should be no speculation and short selling. Their business must be transparent.  They should be allowed to borrow only a limited amount of money.

46.    What are the lessons for Asia? In the first place Asia must not accept Western ideas and systems without critical examination. If after critically studying what is proposed by Western countries Asians find faults or weaknesses, it is better to reject them or modify them. Asians should actively promote their own systems.

47.    Thus in 1997-98 the system allowed massive currency trading involving short-selling. The market, it was said, will determine the value or exchange rate.  Government should leave the market free to determine exchange rates.

48.    The idea was sound. Demand for a currency would depend on the trade of a country. If the country is prosperous and the country’s currency would be needed in order to pay for the goods or the services exported from the country, then the value of the currency against a common trading currency such as the US Dollar would rise. The payment itself may be made in US Dollar but in the country the US Dollar should be converted to local currency. If the country imports more then the demand for the US Dollar would increase and the exchange rate would favour the US Dollar.

49.    Unfortunately the market would create a degree of uncertainty. Predicting returns on prices and trade would be difficult as the currency might revalue or devalue when payments are to be made.

50.    It is in order to minimise the effect of changes in the value of the currencies that hedging was designed.  Hedging carries a cost that would affect the profits.

51.    But currency traders deliberately selling huge amounts of the currency could devalue it at will. Apart from impoverishing the country, through devaluation a great deal of uncertainty would trouble businesses. Exporters and importers quoting at current exchange rates can easily lose if the currency is grossly devalued or revalued depending on whether they are selling or buying.

52.    Malaysia faced with this dilemma in 1997-8 decided to fix the exchange rate by preventing currency traders from access to the Malaysian currency for trading purposes. In the eyes of the Western banks and financiers this was wrong. But fixing the exchange rate helped businesses to prepare their budgets and price their goods without fear of going wrong and losing money.  In any case the original Bretton Woods agreement was about fixed exchange rates and not about the free market and floating currencies.

53.    Malaysia was also advised by the IMF to have a surplus budget, to increase interest rates, to halve the time for declaring a loan non-performing, to let businesses in trouble go bankrupt etc. We rejected all these advise. We also refused to take International Monetary Fund loans as the condition was for us to surrender economic management of our country to the IMF.

54.    As you may know by controlling the exchange rate and rejecting all the IMF advise Malaysia was able to recover much more quickly than the other East Asian countries.  Today the whole world agrees that Malaysia did the right thing.

55.    The lessons that we learnt from our 1997-98 experience was not to uncritically accept the advice of the so-called international agencies.  They may know something but they do not know everything.  Their one size fits all solution cannot always work.

56.    In the present crisis we have to understand the causes. I have tried to identify these causes above. But there must be many more.

57.    Once we know and understand the causes then we can plan to avoid them. Sub-prime lending, creation of too much money by the banks, lack of Government supervision, leaving central banks in the hands of the private bankers etc etc must be avoided by Asians.

58.    Having seen the disastrous results of the Western banking, and their monetary and financial systems, we must not assume that if we recover than the systems must be maintained.  Recovery does not prove that the system is right.  Whatever the results we must critically examine the present system.

 59.     The present crisis is due to systemic failure. We must therefore change the systems. Minor changes would not suffice. All the systems must be subjected to close critical analysis.

60.    If the West insist in retaining the present system with only minor cosmetic changes, Asians must be ready to reject them, if necessary. Asians must learn and convince themselves that they have the ability to formulate and develop new systems which will not be so easy to abuse.

61.    Asian economies are very strong and will grow stronger with time. Their influence on world economy is enormous.  Systems developed by Asians should therefore be taken seriously, and if good, should be accepted by the world.  Asians must not forever be following the rules and systems developed only by the Europeans.

62.    Asians must therefore be prepared to develop new banking systems which would not be given the power to create unlimited money. The banks must have new sets of regulations and new supervision by trained Government agencies. There must be distinct limitations to what the banks are allowed to do. Bank financing should be limited to real business and trade. The loans must also be limited based on the assets owned by the banks. Loans in excess of this must be subjected to Government scrutiny and in big cases to Government approval.

63.    The world needs to trade and trade financing must not be monopolised by any particular currency. A special trading currency needs to be created and be owned by all the countries of the world. The currency must be backed by gold or by reserves held by every country.

64.    There must be no trading in currency except in financing trade. The value of national currencies must be fixed against the world trading currency not against any other currency. Revaluation and devaluation must be by comparison to the world trading currency.

65.    The hedge funds must be open to public scrutiny if at all they are to be allowed. Their borrowings from banks must be based on a small multiple of the funds they hold. No subsidiaries or operations must be done from tax havens. All transactions must be open to Government scrutiny and by the managers of the special trading currency.

66.    A new international anti-trust law must be introduced to curb mergers and acquisitions. There must be no monopoly in any business. The international community must break all monopolies so that ownership is distributed worldwide.

 67.    The monetary system needs to be changed. Today banks can create alternative currencies through cheques, credit cards, traveller’s cheques, entries into bank books, etc.  This has led to more money being created than needed for trade.  The excess money created is being used for all kinds of money make money schemes for the rich investors.

68.    The exchange rates of the different currencies against each other must be fixed through a proper criteria. The market must not be allowed to play with exchange rates.

69.    These are some of the suggestions that Asians can consider proposing to the world community. They need to be scrutinised and debated in a forum like the Bretton Woods. No country, Asian or European or African should be allowed to manipulate the forum through bribery, as is now being done by the rich countries.

70.    This financial and economic crisis has taught us many lessons. It is not necessary to consider the European system as the best or the only one that can be used. Asians have the same capacity to think and innovate and they should be prepared to put up and defend their proposals for the world financial and economic reforms. But having said this Asians must also be prepared to hear and consider proposals coming from others.

71.    In the end even after systemic changes the result will not be perfect. And so the monetary and financial forum must be maintained to examine and correct any shortcomings or failures, to curb any abuse.

72.    I am not saying I have the solution or that my ideas are right and perfect. What I am trying to suggest is a change in mindset so that we can criticise and change even the most long-standing ideas. Only if we are prepared to do this can we put an end to repeating our mistakes over and over again.




Finews.ch    4.Januar 2010

Ein Blick auf heute aus der Sicht in 20 Jahren
Im Jahr 2030 und wie es dazu kam: ein «nicht ganz Ernst zu nehmender,
aber amüsanter» vorausschauender Rückblick von Anton Keller.
Anton Keller ist Sekretär der Schweizer Investorenschutz-Vereinigung mit Sitz in Genf.

Aus der Sicht des Jahres 2030 erwiesen sich folgende Ereignisse und Entwicklungen als «wegweisend»:

2009: Konrad Hummler von der ältesten Schweizer Privatbank Wegelin, und der NZZ-Kolumnist Beat Kappeler bliesen zum Rückzug aus dem US-Markt. Strukturierte Steaks und Finanzprodukte verloren Marktakzeptanz.

2010: Die helvetische Titanic UBS wurde noch rechtzeitig abgebremst, zurückgestutzt, und neu als Genossenschaft vorrangig auf die Bedürfnisse der in- und ausländischen Privatkunden und KMU ausgerichtet.

2010: Die Credit Suisse zog sich ebenfalls aus dem US-Markt zurück; verstärkte dagegen ihr Netz in Russland.

2010: Wiederbelebung des russisch-schweizerischen Handels- und Niederlassungsvertrags von 1872.

2010: Roman Polanski - wie vormals Marc Rich - wurde nicht an die USA ausgeliefert. Motion Lex Helvetica wurde überwiesen. Die illegal erlangten Bankinformationen wurden rechtlich sterilisiert, der fremden Hehlerei von Staates wegen so ein Riegel geschoben. All dies erneuerte das Vertrauen in die Schweiz und ihrer Institute.

2010: Das Goldkartell brach auseinander, was eine tiefgreifende, die Weltwirtschaft erschütternde Währungskrise, Hungersnöte und Chaos auslöste, und zu grundlegenden gesellschaftlichen und politischen Umwälzungen führte; Pensionskassen bekamen Casino-Verbot; strikte Trennung von Realwirtschaft und Casino.

2010: Der Internationale Währungsfond IMF präsentierte sein Alternativmodell zum diskreditierten amerikanischen QI-System, womit es gelang, zugunsten der realen Wirtschaft einen hilfreichen Teil der in die Parallelwirtschaft abgedrängten Gelder, nämlich jährlich mehr als 500 Milliarden Euro, zurückzugewinnen.

2010: 190‘000 Unterschriften zur Bankgeheimnis-Initiative eingereicht; Gegenvorschlag beschlossen.

2010: Suspendierung aller DBA-Zusatzabkommen bis zur Volksabstimmung über die Unterstellung des Eigentums unter den verfassungsmässigen Schutz der Privatsphäre.

2011: Weltweit massiv überwiegend positive Reaktionen auf Schweizer Initiative re Privatsphärenschutz für Eigentum; ähnlich Minarett-Initiative welche als Auslöser des Dammbruchs zugunsten eines modernen Kreuzzugs zur Befreiung von Jerusalem schliesslich zu einer christlich-muslimischen Allianz führte.

2012: Nationale Referenden in F, GB, I, NL, PL über die Fortführung der Mitgliedschaft in der EU; britisches Referendum über den Beitritt zu den Vereinigten Staaten.

2015: Volk lehnte die Ratifikation des schon allzu lange verdeckt praktizierten Status der Schweiz als 54. Staat der USA ab, befürwortete aber volle Einbindung in die ihrem Modell nachgebaute Europäische Konfoederation als real-demokratische EU-Nachfolgerin; Rückanbindung des Schweizer Frankens und des Rubels an Gold; Schweiz wird internationale Gold- und Handelsplattform insbesondere für Russland, China und Südafrika.

2015: Ersatz der Tiger und F/A-18 Kampfjets mit russischen Sukhoi SU-35 und israelischen Drohnen.

2015: Landwirte mutierten en masse zu Wasserwirten. Reaktivierung der grossen Freizone um Genf.

2020: Genf wurde Hauptstadt der Europäischen Konfoederation. Einweihung des Internet Weltarchivs in Genf.

2025: Einweihung der Eurometro-Startstrecke Lyon-Satolas-Annecy-Genf Cointrin-Nyon-Thonon-Evian-Lausanne

2030: UNO wurde von der Organisation für Regionen und einheimische Völker abgelöst.




format.at     12.10.2010 23:56

Kapitalismus 2.0: FORMAT-Serie, Teil 3
Willkommen in Utopia
* Die Zukunft des Steuer- und Finanzsystems
* Gerechtere Verteilung von Arbeit & Einkommen
Martina Madner, Arndt Müller

- Neu steuern: Eine ökosoziale Reform soll den Faktor Arbeit ent- und Ressourcenverbrauch belasten.
- Neu arbeiten: Konzepte für den Ausbau des Dienstleistungssektors und die Umverteilung von Arbeit.
- Neu finanzieren: Experten fordern eine radikale Einschränkung der Gewinnchancen für Banken.
Franz Fischler und Klemens Riegler freuen sich schon auf den Herbst. Dann nämlich steht endlich der Budgetplan, der für die Österreicher alleine im kommenden Jahr zusätzliche Belastungen von 1,7 Milliarden Euro bereithält. Fischler und Riegler sind keine Masochisten, vielmehr sehen die beiden Vorkämpfer des Ökosozialen Forums durch die staatliche Mammutbelastung endlich die Zeit gekommen, Österreich steuer- und gesellschaftspolitisch auf vollkommen neue Beine zu stellen, sozusagen einen Paradigmenwechsel einzuläuten (siehe Kommentar Franz Fischler). Mit ihrem Konzept einer ökosozialen Steuerreform touren sie gerade durch die Ministerien. Sollten auch nur Teile davon umgesetzt werden, käme das einer Revolution gleich.

Eine solche wäre auch dringend nötig. Denn das Dogma, dass Wachstum den Wohlstand aller sichern wird, bröckelt. Mittel- bis längerfristig wird sich das Wachstum deutlich einbremsen und jedenfalls nicht ausreichen, um mit herkömmlichen Mustern Arbeitslosigkeit zu bekämpfen oder Sozialsysteme zu verbessern. Die Suche nach Alternativen hat deshalb längst begonnen, vormals utopisch anmutende Formen des Wirtschaftens werden heute ernsthaft diskutiert. Ökologische und soziale Steuerung sollen neue Arbeitsmodelle ermöglichen. Auch jenseits von Basel III basteln Wirtschaftsvordenker an einem Geld- und Finanzsystem, das weniger krisenanfällig ist und den Menschen besser nützt.

Ökosoziale Steuerreform
Fischler und Riegler sind deshalb so von ihrem Konzept überzeugt, weil es eine fatale Schieflage im heimischen Steuersystem beseitigt, Normalbürger und Unternehmen aber nicht mehr kostet.

Der österreichische Staat belastet Arbeit mit 41,3 Prozent Abgaben – weit mehr als der EU-Schnitt von 36,5 Prozent. Rund die Hälfte aller Steuereinnahmen stammt hierzulande aus dem Faktor Arbeit. Anders beim Ressourcenverbrauch. Da ist die Besteuerung lächerlich niedrig: 2,4 Prozent. Kurz: Das wertvolle Gut Arbeit wird über Gebühr belastet, die Verschwendung wertvoller Ressourcen belohnt. Der Plan der Ökosozialen sieht deshalb vor, dieses Missverhältnis ins Gegenteil zu verkehren, eine „doppelte Dividende“ zu schaffen, wie Riegler es nennt: eine Idee, mit der sich zumindest auch Umweltminister Niki Berlakovich anfreunden kann (siehe Interview).

Dazu braucht es folgende Zutaten: höhere Mineralöl- und Kraftfahrzeugsteuern genauso wie höhere Energieabgaben im Form eines CO2-Zuschlags auf fossile Energieträger. Hinzu kommt die Einführung einer Flugticketabgabe nach dem Vorbild Deutschlands, die alleine rund 150 Millionen Euro pro Jahr bringen könnte. Macht in Summe zwei bis drei Milliarden Euro an neuen Steuern und Abgaben. Politisch durchsetzbar wird dieser Plan aber nur, wenn die Ökosteuern je zur Hälfte wieder über niedrigere Lohnnebenkosten an die Betroffenen zurückfließen, Unternehmer und Arbeitgeber deshalb an anderer Stelle entlastet werden.

Wo aber bleiben die Mehreinnahmen für den Staat? Die Ökologisierung der Steuern soll Österreich ein zusätzliches BIP-Wachstum von zirka 0,7 Prozent bis 2014 bringen. Das reduziert die notwendigen Zusatzsteuern um rund zwei Milliarden Euro. Schließlich werden Konsum und Investitionen angeregt, und neue Jobs sparen dem Staat Arbeitslosengelder. Der Rest der 4,1 Milliarden, die der Staat bis 2014 zusätzlich braucht, könnte mit der höheren Besteuerung von Finanzgewinnen und sozialschädlichem Verhalten wie Rauchen oder Alkoholgenuss eingenommen werden – und mit der geplanten Bankenabgabe.

Konservativ geschätzt entstünden 15.000 neue Arbeitsplätze. In Deutschland wurden mit Ökosteuern sogar 250.000 neue Jobs geschaffen, zugleich werden CO2-Emissionen um drei bis sieben Prozent reduziert. Die Umwelt dankt, die Staatskasse auch.

Arbeit neu bewerten und verteilen
15.000 Jobs aus der ökosozialen Steuerreform sind aber zu wenig. Vor allem vor dem Hintergrund, dass zusätzliches Wachstum alleine in der Vergangenheit auch schon nicht für Vollbeschäftigung gesorgt hat. „Arbeit und Einkommen müssen viel gerechter verteilt werden“, ist Gernot Mitter von der Arbeiterkammer überzeugt: zwischen In- und Ausländern, zwischen Jüngeren und Älteren, dem Mann an der Maschine und der Frau in sozialen Berufen. Aber auch zwischen „normalen“ Mitarbeitern und Managern. Mitter ist sich deshalb sicher: „Wenn ein Unternehmen dem Häuptling 40-mal so viel bezahlt wie dem Indianer, muss der Staat das nicht noch stützen.“ Die steuerliche Absetzbarkeit von Topgehältern wäre deshalb genauso zu überdenken wie Strafen für Unternehmen, die Einkommen intransparent und unabhängig von der Leistung des Arbeitenden gestalten.

Viele Experten sehen die Zukunft nur mit einer radikalen Arbeitszeitverkürzung bewältigbar: Vollbeschäftigung wäre in Österreich mit einer Arbeitszeit von 34,4 Stunden pro Woche erreichbar. Im ersten Schritt müssten Überstunden deutlich teurer werden, und ein besserer Arbeitnehmerschutz müsste verhindern, dass der Unternehmer einfach das gleiche Arbeitspensum in weniger Stunden zu packen versucht. „Wenn der politische Druck und die Notwendigkeit groß genug sind, sind Arbeitszeitverkürzung und neue Tarifregelungen auch machbar“, glaubt der Osnabrücker Ökonom Mohssen Massarrat. Der Mitarbeiter gewinnt durch mehr Freizeit an Lebensqualität. Ergänzend zu neuen Wochenarbeitszeiten wird Arbeit auch während des Lebenszyklus neu verteilt. Schließlich braucht der Mensch Bildungskarenzen für das lebenslange Lernen. Da aber weniger arbeiten nicht mit vollem Lohnausgleich möglich ist, würde das mit einem Verlust an materiellem Wohlstand einhergehen.

Dienstleistungsgesellschaften
Arbeit findet heute oft auch unbezahlt oder „schwarz“ rund um den Haushalt statt. Kinderbetreuung, Putzen oder Pflege verringern nicht nur das Einkommen vieler Frauen, auch der Staat verdient keinen Cent an Steuern. Gudrun Biffl, Wirtschaftsforscherin an der Donau-Uni Krems, will deshalb den sozialen Dienstleistungssektor raus aus Familie und Schwarzarbeitsmarkt holen. Die Idee: Der Staat stützt in Form von Gutscheinen und über Investitionen in mobile und regional organisierte Infrastruktur. In der Praxis könnte das so aussehen: Ein Teil des Kindergelds gibt es als Putz-, Nachhilfe- oder Betreuungsgutscheine, eingelöst werden sie bei Angestellten eines sozialen Dienstleistungszentrums in der Region, die im Wettbewerb miteinander konkurrieren. Damit gäbe es nicht nur Arbeitsplätze, auch die Kontrolle der Qualität und des effizienten Einsatzes der Mittel wäre besser gewährleistet als heute.

Alternative Geldsysteme
Zumindest als Denkanstoß sind auch Versuche mit sogenanntem Regionalgeld nicht reine Spinnerei. Erfolg hatte dieses Konzept schon im Jahr 1932 im darbenden Tiroler Ort Wörgl. Als die Wörgler im Zuge der damaligen weltweiten Depression ihr Geld nicht mehr ausgeben wollten, sondern für noch härtere Zeiten in den Sparstrumpf steckten, sorgte ein neues, zinsloses Regionalgeld für neue Investitionen in der Region und niedrigere Arbeitslosenzahlen als im Rest von Österreich.

Ein entsprechendes aktuelles Projekt ist das Ende November in Wien startende KAESCH, das die Bewohner der Wohnhausanlagen Kabelwerk, Alt-Erlaa und Schöpfwerk probieren wollen. 100 KAESCH entsprechen einer Stunde Zeit, mit der man die Arbeit anderer bezahlen kann. So lassen sich informelle, aber wertvolle Tätigkeiten wie Altenbetreuung oder Nachhilfe miteinander tauschen. Wirtschaften wird als Mit- und nicht als Gegeneinander begriffen. Hans Christoph Binswanger, Schweizer Wirtschaftswissenschaftler und Doktorvater von Deutschbanker Josef Ackermann, hält derartige Regiogeld-Initiativen zwar für pädagogisch wertvoll, für das globale Geldsystem der Zukunft hat er aber eine noch simplere Idee: „Die Geldschöpfung der privaten Banken gehört unterbunden.“ Binswangers Erkenntnis ist selbst den meisten Ökonomen völlig fremd: Danach entsteht Geld automatisch durch die Vergabe von Krediten. Auf der Basis von geringen Bar- sowie unbaren Zentralbankreserven können die Geschäftsbanken ein Vielfaches an Buchgeld schöpfen. Dieses kreditabhängige Geld wirkt direkt als Wachstumszwang, da Kreditnehmer ihre Schuld nur dann zurückzahlen können, wenn sie es Gewinn bringend investieren.

Fessel für die Banken
Wenn die Realwirtschaft das Wachstum nicht mehr hergibt, fließt das Geld in andere Anlagen und treibt die Preise nach oben. Deshalb sieht Binswanger für die immer häufiger auftretenden Spekulationsblasen die Geldschöpfung privater Banken verantwortlich. Diese „Vermögenspreis-Inflation“ entbehrt jeder realen Grundlage und bricht regelmäßig irgendwann zusammen – so geschehen auf den Immobilienmärkten der USA und Spaniens. Aus diesem Grund müssten alle Renditen und Steuern aus dem laufenden Wirtschaftsprodukt bezahlt werden, fordert der deutsche Wirtschaftssoziologe Josef Huber. Seine Idee des sogenannten Vollgeldes verschafft den Zentralbanken wieder die gesamte Macht der Geldschöpfung, womit sie aufkeimende Vermögenspreis-Inflation wirksam durch eine direkte Drosselung der Kreditvergabe unterbinden könnten.

Binswanger: „Die Banken sträuben sich natürlich dagegen, weil sie nach einer Reform viel weniger verdienen. Allerdings verursachen sie dann auch viel weniger Krisen.“

Wirtschaftsutopisten wie die von Attac haben überhaupt kein Vertrauen mehr in den bestehenden Bankensektor. Sie fordern als Alternative die „Demokratische Bank“. Kernidee des Konzeptes ist das Ende der Gewinnorientierung bei Finanzinstituten, ihre Rolle soll rein auf die Geldvermittlung zwischen Sparern und Kreditnehmern beschränkt sein. Kreditzinsen sollen ausschließlich die Kosten der Bank und die Inflation der Sparer decken. Zweiter Kernpunkt: Investitionsvorhaben mit hohem Mehrwert für Gesellschaft und Umwelt werden bevorzugt, sie erhalten Kredite kostenlos oder gar mit „negativem Zins“, müssen also weniger zurückzahlen als die Kreditsumme.

Erstaunlicherweise haben die Attac-Leute schon ein paar unerwartete Mitstreiter gefunden. So frohlockt Günter Grzega, ehemaliger Vorstandschef der Münchner Sparda Bank: „Dies könnte der Startschuss für eine Re-Demokratisierung des Bank- und Finanzwesens sein und damit – ganz nüchtern betrachtet – die Gesellschaft vor dem nächsten, noch gewaltigeren Crash der Finanz- und Realwirtschaft bewahren.“




The Washington Times    October 19, 2010

A Congress of Children
Elected officials showcase their immaturity during recent votes
By Richard W. Rahn

Those officeholders who most often act like children appear to be the most endangered in the upcoming election - good. Children often do not think through the consequences of their actions, nor do they take a long-term view. Children tend to be excessively self-centered, thinking little of the needs of others. Children sometimes confuse fantasy with reality. In short, children are often irresponsible, which is why they need adult supervision.

If Speaker Nancy Pelosi, Senate Majority Leader Harry Reid and their fellow members of Congress were children, what might they have done? They might have failed to do their most basic task and not have passed a budget for the United States as the Budget Act says they are required to do. They might not have passed necessary tax legislation that would prevent every person and business in America from getting hit with a massive tax increase this January. A Congress of children would have added trillions of dollars in debt during a financial crisis, which was caused by too much debt. Is this not a precise description of the current Congress?

Children like to spend other people's money on themselves and their friends without thinking about how it was earned and the hard work that went into earning it. A childlike mind might believe in the fantasy that you can take money from the pocket of someone who worked hard to earn it, give it to someone who didn't earn it and that, magically, everyone will be better off. A fully developed, mature brain would understand that voting to enact laws without having read or understood them was irresponsible and likely would lead to bad consequences.

Democracy is a very frail form of government. It depends on the majority of voters having the wisdom and maturity to elect people more knowledgeable and, perhaps, even more responsible than themselves. Being a responsible member of Congress is a large and difficult job. One needs to have some basic expertise in many different disciplines - law, history, economics, the hard sciences, etc. - and then be able to evaluate the arguments, both pro and con, of those with more specific knowledge.

It takes no skill or wisdom to merely be an echo chamber for the passions of the moment. Members of Congress who support trade restrictions in a counterproductive effort to "protect" American jobs reveal themselves to be ignorant of both economics and history. They will claim that many Americans are in favor of trade restrictions, but as Bertrand Russell once noted, "The fact that an opinion is widely held is no evidence whatever that it is not utterly absurd; indeed in view of the silliness of the majority of mankind, a widespread belief is more likely to be foolish than sensible."

Those who want higher tax rates on the so-called rich are ignorant of both the empirical evidence and the theory as to why high tax rates are lethal to job creation and economic growth. Those who vote for more government spending are either unaware of the evidence that government is already well above the size to maximize growth and the general welfare, or are like immature children who couldn't care less. The big-government crowd argues it is following John Maynard Keynes' economic theory as laid out in his "general theory." But as the esteemed Henry Hazlitt noted: "In spite of the incredible reputation of the general theory, I could not find in it a single important doctrine that was both true and original. What is original in the book is not true, and what is true is not original. In fact, even most of the major errors in the book are not original, but can be found in a score of previous writers."

Keynesianism simply does not work. The evidence of the past 100 years attests that expanding government has always made us worse off, not better off.

Too many members of Congress have little regard for liberty. They reveal it not only when they vote for high tax rates and needless regulations but when they vote for measures to stop hate speech and political ads. Words that offend no one are not what need to be protected. For us to really have the right of free speech, all political speech and words that are merely vile need to be protected.

Too many members of Congress view themselves as better than the rest of us and expect us to not question their decisions as they rape our pocketbooks and despoil our liberties. Democratic California Sen. Barbara Boxer comes to mind as exhibit A with her childish rant against a general who addressed her as "ma'am" rather than as "senator," while she, in fact, deserves no respect because of her destructive spending, taxing and regulating policies.

Free-market democracy cannot succeed if those who hold elective office act and vote like children. We can do better.