Just found this great talk from Bill Clinton about positive-sum games and the positive aspects of global interdependence:
Keep in mind that the localist movement this blog has become about preaches independence, not interdependence and rejects these notions without understanding them - including what trade means for peace.
Monday, September 27, 2010
Bill Clinton on positive interdependence
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I care more about the ideas and positions than the party affiliation of the source. This is a call for globalization.
ReplyDeleteClinton also testified in Congress this year exclaiming his regret for his trade policy - which was of neo-liberalism - failing to alleviate poverty around the globe:
ReplyDelete"It was a mistake," he said of his agribusiness-backed initiatives forcing impoverished countries to eliminate tariffs. "It was a mistake that I was a party to ... I had to live every day with the consequences of the loss of capacity to produce a rice crop in Haiti to feed those people because of what I did."
Clinton didn't stop there. In a subsequent ABC News interview, he said that when it came to 1990s-era financial deregulation that so harmed today's economy, "I think [my advisors] were wrong, and I think I was wrong."
http://www.salon.com/news/opinion/feature/2010/04/23/bill_clinton_s_contrition
But you're right, globalization is the direction we should go in and one he champions - but neither of us thinks it goes hand in hand with neo-liberal economic development.
ReplyDeleteWhenever I hear that financial deregulation caused the problem, I have to ask, what specific regulations are you referring to?
ReplyDeleteIf it were that simple, then wouldn't the solution have been to reinstall those missing regulations? But that's not what we did.
Check out the end of this interview at the one hour, 8 minute mark: http://www.econtalk.org/archives/2009/10/calomiris_on_th.html
Charles Calomiris reminds us that Obama's administration stopped making the "blame deregulation" argument when he took office. He says the financial regulations that went away since the 1980s were:
*Regulation Q - a cap on interest for depositors
*Branching restrictions
*Limits on bank-to-bank underwriting
The Salon link never mentioned a specific regulation. If there are some phantom regulations this list is missing, please inform me.
"I have to ask, what specific regulations are you referring to?"
ReplyDeleteAnd that is a good question to ask. I'm not the kind of guy that accepts blanket regulation and bureaucracy. I like efficiency too.
I don't know exactly what regulations Clinton is talking about, but from my understanding of Clinton's ideology - that of liberalizing trade in developing countries - the regulations are pretty comprehensive.
(And I only used the Salon article because it was the first I found - I had heard about Clinton's testimonial when it actually happened and couldn't easily find the news report instead.)
The focus of most of my economics classes was international development and we studied the effects of development programs of the IMF and WTO on lesser-developed countries. (My nation of study was Algeria, specifically.)
Accepting development loans from the likes of the IMF comes with "conditionalities" designed to make it plausible for the country to pay back its loans - as well as allegedly develop the country. These included drastic cuts to gov't spending - sometimes eliminating entire public programs like water-works or energy and privatizing them. They also include removing tariffs and subsidies (and other cock, err... trade-blocks) as well as enacting a financial policy to rein in inflation and also foster favorable interest rates for investment.
I doubt any one particular policy fails a nation's development. But in tandem, it is my understanding that these sort of blanket liberalizations fail to significantly lift those in poverty out of it.
But I confess - it's not quite that simple, either. Perhaps if EVERY nation had entirely liberalized economies as the IMF/WTO would prefer - it may work. I don't know. We haven't tried that yet. The fact is a lot of developing countries removed all barriers to trade while at the same time competing with the United States (and Europe) while the US and EU greatly subsidized its agriculture - giving our exports a huge advantage.
One of the things Clinton said in his testimony was that he felt the only good he did with his trade policy was help a few Arkansas farmers.
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As for the financial melt-down, I admit I don't know a lot about it. The regulations I always hear about losing were restrictions on what kind of financial properties different financial institutions could buy. Something about eliminating accountabilities - insurance in bed with loaners; blah blah blah.
I don't remember all the details though so I won't pretend to know how to fix our pickle. I'm also not in a position to check out the video right now, but I will later.