Saturday, September 26, 2009

Talkfest at New York/Pittsburgh

The annual talkfest at United Nations this year brought a new Star, Barack Obama. The world leaders lined up to shake his hands and get their photos with Barack and Michelle and it was all a big Picnic and Vacation for the leaders.
But some good seems to be coming out of these talks now that US under Obama has recognised the importance of consensus-building again and drop its unilateralism which was the policy mantra under George Bush.
It was nice to hear Obama speak about the necessity of all nations pulling together to get out of the climate and economic mess. I specially liked his exhortation that countries which castigated US earlier for acting alone cannot now ask US to act alone to pull the world out of these messes. Good point. Obama seems to be getting the right vibes and responses and let us see what he can make out of this new honeymoon with the world.
The counter points to Obama were the speeches by Gaddaffi and Ahmedinijad. Gaddaffi in his rambling speech however highlighted the hypocrisy of United Nations being controlled by the Security Council which is a small club not really representing the world as it is today. His point about shifting UN itself to a more accessible place on the Globe needs some consideration. May be US would also be happy to be rid of UN at New York. I am sure the residents of New York would support such a move for UN, because then they would have less traffic/security hassles and could have the city streets for themselves.
Ahmedinijad's tirade against Israel could be dismissed but not his defence of Iran's right to develop nuclear technology. The US and a few Western countries should not have the monopoloy on nuclear technology and if any other country like Brazil or Iran wishes to develop nuclear technology then they should be allowed to do so. It is double-standard for US, Russia and China (even India and Israel) which have nuclear weapons (some developed overtly and some covertly as in the case of Isreal) to speak against other countries wishing to develop that technology for peaceful uses. Unless one approaches this with a degree of trust no agreement is possible. Isolation of any country will not work.
The other super meeting of the G20 at Pittsburg has decided that G20 would be the forum responsible for managing the world economy instead of the G8 (comprising of mostly West). Smart move, when the losses are now being socialised, to expand the responsibility for recovery and throw a smoke-screen over the culpability of the West for the economic mess they have brought to the world in the recent past. Hope it works fast.
Still the Bankers are a different, uncontrollable Beasts altogether and with so many ex-bankers in position of responsibility at Governmental level (especially in the US) the outcome is not very certain.
Why not integrate the G20 countries into an expanded UN Security Council which could be renamed Supreme Council with no veto rights for any one country, but 75% majority ruling required to pass all resolutions/actions ?

A lighter side-show to these meetings was the New Zealand Prime Minister John Key's appearance on the David Letterman Show where key plugged New Zealand unashamedly. Good on you mate.

Watch this at

Saturday, September 12, 2009

September-The Crisis Anniversary Month- 9/11 and 9/15 - Osama and Lehman

September is the Crisis Anniversary month for the world. Two events that shook the world this decade happened in September, both in New York. Both changed the world in political and economic terms and both had created more uncertainties and destabilised the world.

The 9/11 World Trade Center attacks by Al Qaeda instigated a massive retaliation by US in Iraq and Afganisthan, the effects of which are being felt even today and will continue in future. The US has spent trillions to avenge the 9/11 attack and has sacrificed many of its citizens in both wars. Iraq has been scarred forever and the US has put countless Iraqi citizens out of their homes and even out of their lives.

These wars have generated their own scandals, Abu Graib, Gitmo, torture, water-boarding (such an innocuous word sounding like a sport akin to snow-boarding), rendition (sounds biblical but very dangerous in practice) and similar exotic practices/phrases. The US is trying to slowly wind down from Iraq, but at the same time increasing the involvment in Afganisthan, much against the wishes of its own citizens. There seems to be no exit strategy from war abroad.

Similar is the story with the other Anniversary, 9/15, the day the financial chiefs let Lehman Brothers collapse, bringing on a Tsunami in the money world, which swept aside and destroyed the wealth of countless individuals and organisations.

It has been proved by the latest revealings in many financial magazines that the top-players in USA at that time did everything with a selfish interest to save their own firms and even some of them were brow-beaten into the scheme, with the Bush Administration having no clue as to what was happening or was going to happen.

It was Paulson all the way designing and implementing the recovery at a very rapid pace to save Goldman and his cronies. The world will continue to pay the price for this for many more years.

'Too Big to Fail' and 'Too Smart to be thrown out' have entered the Capitalistic vocabulary and are once again the underpinnings of the recovery/rebuilding.

And the ultimate 'Too big to fail' is the US itself and the whole world is sustaining what is unsustainable for long. So watch out for a similar scenario happening sometime in next few years. The Bankers are consolidating with the help of public money ready to unleash the next catastrophe on the world. It could come in the form of commerical property collapse, more securitisation may be of carbon/emissions trading, insurance scams (what with Obama feeding the insurance companies with his own Grand Plan), dollar crisis, inflation, and many such unforeseen events. The cost of picking up the pieces then will be more severe.

The exit strategy from this so-called stimulus is still not being thought of.

Two events from which the US and the World are trying to exit without much more damage, but the prognosis is not very good at the moment.

I am not being excessively gloomy, in the face of the nascent recovery and the 'green shoots' that is out there. I am just looking at the countless individuals/instititutions that lost wealth in the collapse as against the very few, bankers and stock holders, who are now benefitting from the small recovery that is happening now. The collapse was broadbased but the present recovey is too narrow to help those who lost everything in the collapse.