The Texas Two Step - Harper Dances, Canadian Workers Pay

Well it is hot off the press - the Declaration of the Summit on Financial Markets and the World Economy. The Texas Two Step was executed brilliantly. Step one; manufacture chaos. Step two; reap the rewards. Prime Minster Stephen Harper and Finance Minister Jim Flaherty lined up in behind the Bush-Paulson tag team and declared that it would, “give the market some reassurance”. Help was on the way for Wall St., Bay St., financial markets, investment bankers, hedge fund managers, stock market investors and speculators. Working people and organized labour were not mentioned in the declaration.

The world can now breath a collective sigh of relief, the geniuses of finance have crafted a coordinated economic rescue package that is sure to pull the world from the abyss and provide the tools required to mitigate new crises. Backslapping, high-fives and champagne toasts all around. Well done boys!

What does the declaration say? The 3635 word report declared that basically it is business as usual. Along with the usual financial buzz words and pledges to ‘get it right’ next time, the need for renewed fiscal discipline, prudent oversight and similar hot air, the declaration was brazenly conniving and openly manipulative.

The declaration will be touted as the greatest achievement to date of the virtues and strength of unfettered capitalism. Harper will peddle it to the Canadian people as a great accomplishment and evidence of the strength of capitalism to do what is necessary to save the financial system. I am sure that auto workers in St. Thomas will be overjoyed. I can almost hear them now popping the corks on the bubbly.

Quoting from the US managed G20 declaration, national and regional authorities and Finance Ministers should:
· Ensure that the IMF, World Bank and other MDBs have sufficient resources;
· Encourage expanded trade in financial products and services;
· Protect the integrity of the world’s financial markets by bolstering investor protection;
· Respect jurisdictions that have yet to commit to international standards with respect to bank secrecy and transparency;
· Enhance cross border capital flows;
· Reform of Bretton Woods Institutions in order to increase their legitimacy;
· Draw upon the recommendations of eminent independent experts;
· Remain committed to energy security, the rule of law and the fight against terrorism;
· Review proposals by private sector bodies that have developed best practices for private capital pools and/or hedge funds;
· Review bankruptcy laws to ensure that they permit an orderly wind-down of large complex cross-border financial institutions;
· Ensure that financial institutions maintain adequate capital in amounts necessary to sustain confidence;
· Create strong liquidity cushions;
· Monitor substantial changes in asset prices and their implications for the macroeconomy and the financial system;
· Review business conduct rules to protect markets and investors;
· Implement national and international measures that protect the global financial system from uncooperative and non-transparent jurisdictions;
· Review the adequacy of the resources of the International Monetary Fund (IMF), the World Bank Group and other multilateral development banks and stand ready to increase them where necessary.

So let me get this straight; give billions more dollars to the IMF so that unelected appointed foreign consultants can advise the Canadian Finance Minister how to expand financial products and services while at the same time ensuring that Canadian banks a fully topped up with taxpayer money, so that Canada can continue the unencumbered flow of energy resources to the US through NAFTA, so that Canada can remain committed to the fight against terror...in Afghanistan I presume. Hum...sounds like the old plan.

On this basis the declaration said that the role of the IMF ‘would be strengthened”. The declaration reaffirmed its commitment to free market capitalism. It stated that it is the, “shared belief that market principles, open trade and investment regimes, and effectively regulated financial markets foster the dynamism, innovation, and entrepreneurship that are essential for economic growth, employment, and poverty reduction.” The declaration went on to say that these principles, “have lifted millions out of poverty, and have significantly raised the global standard of living.”

This is just a small sample the ‘new’ neo-liberal policies of regulated markets and oversight. These formulations will fall under the control and be managed by the same, in fact strengthened, financial mechanisms such as the IMF, World Trade Organization and the World Bank that has generated this Made in USA crisis. The Canadian people need to ask Prime Minister Harper; has he been given a mandate to implement such a regime in Canada? It can only mean more unemployment, despair and misery for Canadian working families.

The same day as the Washington Summit by the G20 leaders, venezuelanalysis.com reported that, “Venezuelan President Hugo Chavez handed over credits to over a thousand communal banks, he highlighted the need for social networks of distribution and for the private banks to also contribute.” The funds allotted to communal banks in 2008 tripled from 2007 to $1.6 billion US. Chavez also said that he was prepared to make an agreement with the private banks so that an additional fund by the private banks could be setup and raise the total fund to $3.3 billion US.

The report went on to say:
“Chavez noted the irony that while large, small and medium sized banks are collapsing around the world as a result of the financial crisis, Venezuela is ‘giving birth to thousands of banks that are banks of the people, the communal banks, the banks for popular power... and [this] popular power is vital for the future of the revolution... so this ...can't fail’."

Chavez noted that the proceeds from the communal banks must not go into the speculative markets. President Chavez rejects the notion that goods that cost 1 bolivar to produce should not cost 30 after it makes its way through the speculative market.

The Venezuealananlaysis.com reported that Chavez said that giving money to the communal banks is one way of redistributing and breaking the power that was "in the hands of the bourgeoisie who controlled the resources of the country...they managed the whole economy."

This is a tale of two banking systems; the Texas Two Step or the Venezuelan Communal Tango. Canadian workers are in need of the tango. But then again, Harper only has one partner; the US, he only has one move; the Sell-Out Two Step and he is no Chavez.