Tom Abeles:
>i grant your position. But here is the catch. When the melt down
>occurred in SE Asia and when the Mexican crisis occurred, the bailout
>was on the backs of those masses and not on the backs of the capitalists
>who had moved their money out or who, when their funds were trapped, got
>the governments to bail them out at the citizen's expense.
Tom:
I've argued elsewhere, perhaps earlier on this list, that the Asian meltdown
would have been less likely if there had been a MAI in place, and, of
course, if the Asian Tigers had signed on. The capital that moved into SE
Asia moved as borrowings by indigenous banks, not as direct investment by
foreign companies, including banks, entering the market to compete with
indigenous banks. Highly placed citizens (e.g. friends and cronies of
Suharto) borrowed from the banks and made very bad investments (i.e., the
banks made very bad loans which ultimately could not be repaid) and the
whole system came crashing down. Had the Asian economies been open to
foreign competition instead of foreign loans, their banks would have had to
smarten up or perish. As it is, they have had to do neither. The IMF (not
citizens) has bailed them out and the system has been perpetuated as was,
though with some tightening of the belts of the large number of people who
lost their jobs.
Having argued that a MAI would have helped, I can't really be sure that it
would have. Much would have depended on whether signatories were willing to
take it seriously, and by the look of what has happened, it would seem that
this was unlikely.
I would agree that it is always the poor and helpless who bear the brunt of
economic disasters. We have got quite used to thinking of the present world
as a "global economy" but it is really only the rich who can move themselves
and their capital globally. The poor remain stuck where they are.
Ultimately, no one apart from the Mother Teresas of this world gives a damn
about them. They are pawns in everybody's games.
Ed Weick
