A belated tribute to Ursula le Guin

le-guin“If you cannot or will not imagine the results of your actions, there’s no way you can act morally or responsibly.”

When she died in January this year I did save the obituary published in the New York Times. I hadn’t read a lot of her work, but I have, over the years, read and re-read The Earthsea Trilogy – subsequently expanded, like Douglas Adams’s Galaxy Hitchhiker, into a quintology (I made that word up).

I’ve never been a big fan of science or fantasy fiction. I couldn’t progress past the second volume of “Lord of the Rings” – but Ursula le Guin had something else: a genuine belief that the world could be a better place. What’s more, she had definite ideas about how that could be brought about.

As the Turkish Lira plunges in the “money markets”, I’ve been increasingly forced to go hunting for free e-books online, and I’ve been delighted, if a little saddened, to find several of le Guin’s novels available.

earthseaSo, I’m reading “The Dispossessed”, according to the writer of the NY Times obituary “her most ambitious novel”, and I want to share a brief extract, on the subject of economics, banking and finance. Shevek, a theoretical physicist and the main character, from a planet colonised by socialist exiles from their home world where capitalism reigns supreme, has been brought to the latter by curious academics:

“[Shevek] tried to read an elementary economics text; it bored him past endurance, it was like listening to somebody interminably recounting a long and stupid dream. He could not force himself to understand how banks functioned and so forth, because all the operations of capitalism were as meaningless to him as the rites of a primitive religion, as barbaric, as elaborate, and as unnecessary. In a human sacrifice to a deity there might be at least a mistaken and terrible beauty; in the rites of the moneychangers, where greed, laziness and envy were assumed to move all men’s acts, even the terrible became banal. Shevek looked at this monstrous pettiness with contempt, and without interest.”

I can relate to that.

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America cannot be trusted to run global economy

Turkey’s President Erdoğan has been copping plenty of flak from opposition at home and abroad recently. So what’s new? He’s been dealing with negativity, black propaganda, outright lies, a period of imprisonment and at least one attempted military coup for more than twenty years – so I guess for him it’s just business as usual.

Recep+Tayyip+Erdogan+G20+Nations+Hold+Hamburg+oF8eiMsk5dWl

Interestingly, Frau Merkel and M. Macron seem to be offering support these days!

After being re-elected as president, with increased powers under the new constitution, Mr Erdoğan appointed a new cabinet, as he is now entitled to do. Most of his appointments were relatively uncontroversial – but one has aroused considerable criticism and mockery: the choice of his son-in-law, Berat Albayrak, as Treasury and Finance Minister.

Well, certainly, it’s not a good look, especially since the gentleman concerned is only 37 years old; but I’m withholding judgment at this stage. For sure, young Mr Albayrak has a difficult road ahead. His age, for a start. He’ll be dealing with much older, more experienced, hard-headed businessmen (and women) all too ready to latch on to any sign of weakness. His father-in-law, for seconds. He has to live down the perception that he only got the job because of Baba Tayyip. Worst of all, though, is the fact that Turkey’s economy is going through a particularly hard time, with the Turkish Lira dropping to scary lows against the world’s big currencies – with an inevitable flow-on effect to internal prices.

Whatever you may think about President Erdoğan, I am sure few would deny that he is a very astute politician. His party came to power in 2003 after decades of hyper-inflation, regular military coups, and outrageous corruption in business and politics. They have won election after election – and Mr Erdoğan makes no secret of his desire to be at the country’s helm in 2023 when the Republic of Turkey celebrates its centenary. He wants to go down in history as the best thing to happen to his young nation since Mustafa Kemal Atatürk.

So, in my opinion, he’s not going to pick a dodo as Finance Minister at this critical time. He knows that much of his reputation in future will depend on his last years in office, maybe more than the earlier years; and his success (or failure) in bringing his country through the current financial crisis could be the crucial factor in determining how the history books will view his achievements.

So, what has the new Finance Minister got to say for himself? This report appeared the other day in Hürriyet Daily News:

America cannot be trusted to run global economy: Albayrak

Albayrak

After all, he’s about the same age as the President of France, and the Prime Ministers of Canada and New Zealand – and father-in-law’s got his back

The assault on Turkey’s economy must be viewed as an example of how the senseless use of economic pressure as a political weapon poses serious global risks, Turkey’s treasury and finance minister has said.

“By acting together with Turkey now, other countries can also help it create a common strategy to avoid artificial crises in the future,” Berat Albayrak wrote in an article titled ‘America Can’t Be Trusted to Run the Global Economy’ for the American news magazine Foreign Policy published on Sept. 7.

“This August, Turkey’s economy became the main topic in global news coverage. The reason was a systematic attack on the Turkish economy by the biggest player in the global economic system, the United States. It was one of the most disappointing moments in the history of the alliance between Turkey and America,” Albayrak said, accusing the Trump administration of overtly attacking the economy of a fellow NATO member through sanctions and tariffs.

Albayrak underlined that while the scale of the attack resulted in exchange rate fluctuations, the incident ultimately demonstrated the strong fundamentals of the Turkish economy.

“In the face of all the negative propaganda, and the attacks on its financial system, the Turkish economy has demonstrated its strength. It is important to reiterate that no economic indicators or macroeconomic data can account for the devaluation of the Turkish lira over the past month. Turkey’s financial structure and banking system have not experienced any fundamental changes during this time,” he said.

Turkish Central Bank’s independence 

Albayrak pointed to Turkey’s commitment to create an investor-friendly environment in an effort to take steps to address several economic weaknesses to prevent potential future vulnerabilities. He said the Turkish Central Bank’s independence, effectiveness and leading role in monetary policy would remain a priority for the government as it has been for the last 16 years. Albayrak said contrary to what some suggested, “it is not on our agenda to go to the International Monetary Fund”.

“Turkey will continue to secure foreign currency reserves from international markets as it has until now. Our goal is to ensure that Turkey continues to attract foreign direct investment and become a center for innovation and research and development for the global economy,” he added.

Albayrak said the U.S. attack on the Turkish economy also increased Turkey’s determination to strengthen its economy through structural reforms, new trade partnerships and the attraction of foreign investments and to take steps to rebalance the structure of the international economy so that powerful countries like the U.S. no longer would have the power to unilaterally disrupt the economic life of others.

Underlining the fact that Turkey never implemented rules that run counter to market principles, Albayrak said: “No crisis or financial assault can weaken Turkey’s commitment to those principles.”

‘Turkey not only country targeted by U.S.’ 

Albayrak pointed out that Turkey was not the only country that the U.S. recently targeted with sanctions under political pretexts.

“The single-handed exercise of tariffs by the United States against its trade partners in Europe, Russia and China proved that international trade, cooperation and stability should be secured by a stronger alliance among nations around the world and may necessitate taking countersteps to prevent catastrophic damage to the global financial system and international trade.”

Albayrak said the world faces incredibly complex challenges and Washington’s economic threats were a significant subset of those challenges.

“Unilateral sanctions, incitement of trade wars and haphazard use of economic weapons could potentially trigger another global economic crisis. At this critical juncture, developed and developing economies around the world need to promote strong and institutionalized cooperation to handle potential crises and financial attacks.

‘Cooperation, solidarity between Turkey, EU revived’ 

Albayrak said the Turkish government has been pleased to see promising new opportunities for the future of the international economy amid this artificial crisis created by the United States.

“Our European friends, including German Chancellor Angela Merkel and French President Emmanuel Macron, have made statements that clearly indicate they understand that Washington’s approach was dangerous and mistaken. The spirit of cooperation and solidarity between Turkey and the European Union has thus been revived, having proved critical for the political and economic well-being of both sides,” he added.

Albayrak highlighted that Turkey has been at the forefront of dealing with significant threats against Western countries for more than six decades.

“In recent years, this has included the fight against terrorist organizations such as al-Qaeda and the so-called Islamic State. During this period, Turkey has become a hope for millions of refugees running away from the brutal regime in Syria and the target of terrorist organizations that want to expand the war in that country to the West,” Albayrak said, adding that Turkey became an island of stability in one of the most unstable regions of the world.

In adopting sanctions against Turkey, the Trump administration invoked the flimsy pretext of an ongoing legal case involving a U.S. citizen with strong links to terrorist activities targeting Turkey’s peace and stability. The effects of the U.S. decision were nevertheless dramatic, with the Turkish economy experiencing immediate fluctuations. Referring to Andrew Craig Brunson, a U.S. pastor who is under house arrest in Turkey over terrorism charges, Albayrak said, “Washington’s brazen use of economic weapons served as a wakeup call for many countries and investors around the world. It was recognized as risky not only for the future of the alliance between Turkey and the United States but also for global markets.”

Credit rating agencies are fraudsters

Credit rating agencies are fraudsters, Turkish President Erdoğan says

Turkish President Recep Tayyip Erdoğan has called international credit rating agencies“fraudsters,” while promising his supporters “this too shall pass,” referring to the ongoing market volatility. 

erdoğan“They say that credit rating agencies say this or that… Leave those fraudsters. They say a lot of things about us,” Erdoğan said, addressing locals in the western province of Balıkesir on Aug. 31. “These firms are those that increased ratings of bankrupting states four notches at once. They are such a [crime] syndicate.”

His comments came after ratings agency Fitch, which downgraded 24 Turkish banks last month, said on Aug. 30 the 25 percent fall in the Turkish Lira since then had heightened risks and could lead to further rating cuts.

Earlier on Aug. 31, the Turkish president addressed newly graduated military cadets in Balıkesir, where he said: “Turkey will cope with this attack. For those who ask about foreign exchange rates, our answer is: This too shall pass.”

Hours before Erdoğan, Treasury and Finance Minister Berat Albayrak said rating agencies have been putting in intense efforts to create a pessimistic view of Turkey’s banks.

Fitch’s warning came two days after Moody’s downgraded its ratings on 20 Turkish financial institutions, citing the increased risk of a deterioration in funding. The operating environment is now worse than previously expected, it said.

Trust the world’s bankers – They know what they’re doing!

Good news for the global economy, from the economists at Time Magazine . . .

What the World Can Learn from the Greek Debt Crisis

jesus save greeceOn Aug. 21, Greek Prime Minister Alexis Tsipras announced the end of his country’s bailout era from the island of Ithaca*, a reference to the successful end of the Odyssey and its hero’s arrival home. Given Greece’s ongoing economic challenges, the more apt mythological analogy would have been Sisyphus rolling an immense boulder up a hill—only for it to roll down when it nears the top.

Ten years and more than $300 billion in rescue loans later, the country has begun its recovery, but Greeks still have an economy that’s 25 percent smaller than it was before the crisis began. Its unemployment rate is the highest in the Eurozone. A third of Greeks now live in poverty or close to it. In terms of length and severity, Greece’s economic slide is comparable to the U.S. Great Depression.

There are lessons here for the rest of the world. Here are some of the biggest.

greek austerityAusterity politics are dangerous, even if some countries, like Germany, still haven’t gotten the message. Populism is the driving political concern in today’s world, and austerity politics like those championed by policymakers in Berlin add fuel to the fire in two distinct ways. They widen the divide between haves and the have-notswithin individual societies, helping to make resentment and fear the driving forces in domestic politics. They also exacerbate inequality among European member states: Germany and Greece have seemingly never been as far apart in terms of quality of life as they are today. 

Austerity may be good at balancing bank accounts, but it’s disastrous at shrinking widening inequality of both the economic and political varieties. Europe will continue to pay the price for that miscalculation for years to come.

Relatedly, the failure of austerity politics in Greece has created strange anti-establishment bedfellows. the right-left divide of politics gives way to the “Us vs. Them” politics that pits political upstarts against the establishment, with increasingly little concern given to actual policy overlap. the Syriza-Independent Greeks coalition government it’s looking increasingly as a sign of things to come, heralding a future of increased political paralysis.

GREECE-ECONOMY-DEBT-EU-IMF-DEMOAnother critical lesson the Greek ordeal has taught the world: In the 21st century, the economic troubles of the present can extend far into the future. While most reports on Greece have understandably focused on the economic misery of the moment, the real tragedy of Greece’s lost decade of economic growth is that it will shortly become a lost generation of economic growth, even if the economy could manage to magically snap back to its pre-crisis levels tomorrow. Nearly 500,000 Greeks have already fled the country in search of better opportunities abroad, and there is little hope of these people returning as they start their careers and families elsewhere. 

This is not the first time there’s been a mass migration of Greek workers, but the ones leaving this time around are the most educated and capable individuals that the Greek educational system has produced. Their flight means that Greece’s already-broken pension system will be starved of the country’s most economically productive members, and will exacerbate a looming demographic crunch already in the making as the elderly and the young get left behind. In a globalized world where the movement of people is now easier than ever (and particularly within the European Union), a country’s current economic missteps have the potential to reverberate for years to come. 

As Greece continues to claw its way back to financial health [sic!], other countries would do well to track Greece’s progress. Nearly 3,000 years on from Homer’s epic poems, the country still has much to teach the world.

_________________________________

*Ithaca -a tiny Greek island located in the Ionian Sea, off the northeast coast of Kefalonia and to the west of continental Greece. Ithaca’s main island has an area of 96 square kilometres and had a population in 2011 of 3,231.

So why didn’t Mr Tsipras announce his “good news” to crowds of adoring grateful supporters in the Greek capital of Athens? No prizes for answering that one!

Europe should react to US sanctions targeting Turkey, China, Russia: German FM

Germany’s foreign minister on Aug. 27 criticized U.S. President Donald Trump for imposing sanctions against trade partners like Turkey, China and Russia.

Heiko MaasSpeaking at the annual Ambassadors’ Conference in Berlin, Heiko Maas vowed to take measures to protect European firms from such unilateral sanctions.

“Washington’s sanctions policy forces us Europeans to formulate a response. Because it is affecting us, Germany and Europe, when the U.S. abruptly and unilaterally imposing often unspecified sanctions against Russia, China, Turkey and maybe in the future against our other important trading partners,” he stressed.

Maas argued that the European Union member states should take joint steps against the U.S. dominance in global finance, and proposed a European alternative to the U.S.-dominated SWIFT payment system.

“We have to further strengthen the autonomy and sovereignty of Europe in the fields of trade, economy and finance policies,” he stressed.

“It’s not going to be easy but we have already started working on it. We are working on proposals to establish independent payment channels and creating a European Monetary Fund,” he added.

Maas is scheduled to visit Turkey next month to discuss bilateral ties and regional issues.

During his two-day visit on Sept. 5-6, Heiko Maas is expected to meet his Turkish counterpart Mevlüt Çavuşoğlu and other senior officials in the capital Ankara.

Later the two top diplomats will travel to Istanbul for a celebration at the city’s German School marking its 150th anniversary.

Maas’ trip to Turkey comes ahead of Turkish President Recep Tayyip Erdoğan’s key visit to Germany on Sept. 28-29.

Over the past two years political relations between Ankara and Berlin have suffered setbacks, but in recent months both sides have taken steps towards improving ties.

EU heavyweight Germany remains Turkey’s main economic and trade partner, despite political disagreements between the governments on a number of issues.

http://www.hurriyetdailynews.com/europe-should-react-to-us-sanctions-targeting-turkey-china-turkey-german-fm-136189

http://english.almanar.com.lb/568742

The Final Demise of Dollar Hegemony? — Covert Geopolitics

Sanctions left and sanctions right. Financial mostly, taxes, tariffs, visas, travel bans – confiscation of foreign assets, import and export prohibitions and limitations; and also punishing those who do not respect sanctions dished out by Trump, alias the US of A, against friends of their enemies. The absurdity seems endless and escalating – exponentially, as […]

via The Final Demise of Dollar Hegemony? — Covert Geopolitics

US economists oppose Trump’s trade tariffs

WASHINGTON – U.S. business economists are concerned about the risks of some of President Donald Trump’s economic policies, saying they fear his tariffs and higher budget deficits could eventually slow the economy.

trump

Everyone’s out of step but us!

More than 90 percent of economists surveyed by the National Association for Business Economics (NABE) in a report being released Monday said they think the Trump administration’s current and threatened tariffs will harm the U.S. economy.

The administration has imposed tariffs on goods from many of America’s main trading partners — from China and Europe to Mexico and Canada. Trump officials argue that the tariffs, which are taxes on imports, will help the administration gain more favorable terms of trade. But so far, U.S. trading partners have simply retaliated with tariffs of their own.

Source

signe_cartoon_1_percenters_600AND . . . Why is there serious unemployment in the USA? Why are their former industrial cities rusting away? Not because of cheap imports from exporters like Turkey, but because of the greed of US industrialists who chose to move their factories offshore to exploit cheap Third World labour. The Big DT should realise that the United States’ “One Percent” have no loyalty to their own flag, country and people – their only interest is increasing their profit margin.

world-inequality

And the Top 1%?