“If we end up 12 months from now with countries taking protectionist measures, everyone will suffer. I think the absolute imperative for this weekend [at the G20] is a clear demonstration that every member of the G20 recognises that the imbalances are a problem . . . If we don’t do that then I fear the next 12 months will be an even more difficult and dangerous period than the one we have been through,” said Mr King.
Some forms of protectionism are smart and responsible. Too much protectionism shuts countries off from the rest of the world and that is of course very negative and even dangerous. We however, have lost our balance. We need to re-balance ourselves. Governments have a responsibility to their citizens, and markets are there to facilitate transactions. To allow social relationships, especially business relationships, to be formulated solely in terms of state and capital, however, is ignore the particular identities and agreements.
Some of the stimulus measures that have been taken to respond to this economic crisis are ridiculous, propping up people and institutions that have proved themselves unworthy of trust. Rather than decrying trade or tariffs in general, the real task is to work towards government and market policies and realities that work towards justice on a global scale, and are non-exploitative, both of humanity and nature.
We are now hearing the usual chorus of how the government must act to make sure that this type of crisis “never happens again.” It won’t. Each government-spawned crisis has unique elements because real-world conditions change continuously. This is a major source of government failure: the failure to anticipate future development. Government is always behind the curve in dealing with crises because policy is driven by politics, and politics is driven by public opinion. Ordinary voting citizens are by and large not experts on financial markets.
Since most of us are not financial experts and do not have intimate knowledge of financial markets, future financial trends and problems are generally not well understood. Politicians are therefore in a position where they must please those who know the least about the future situation by reacting to high-profile news stories regarding past events only. Worse still, those who do posses intimate knowledge of financial markets have an incentive to capitalize on public policies through their lobbying efforts.
Greenspan warns over currency weakening by Reuters
The United States is pursuing a policy of weakening its currency, driving up exchange rates in the rest of the world, former Federal Reserve Chairman Alan Greenspan warned on Wednesday.
In a guest column for the Financial Times, Greenspan also said that as China holds down the renminbi, the upward pressure on other currencies risks a return to widespread protectionism.
“America is also pursuing a policy of currency weakening. The suppression of the renminbi and the recent weakening of the dollar are, of necessity, producing firming exchange rates in the rest of the world,” Greenspan wrote ahead of the Group of 20 summit in Seoul on Thursday. “Something has to give in this arena of zero-consolidated current account balances.”
The G20 summit has been pitched as a chance for leaders of the countries that account for 85 percent of world output to prevent “currency wars” and a rush to protectionism that could imperil global recovery.
Truth about Greenspan
Alan Greenspan was only “following orders” from the US presidents he happened to work under and has nothing to do with why we had a global economic meltdown. He said that the central bank he managed “lacked authority to regulate the lenders that issued most sub prime mortgages.” It seems that the last time the “following orders” defense was used they (the “minion”) were hanged.
Greenspan was an incompetent parasite, with the right credentials and ‘power’ connections, that fed on the public purse and was slimy enough to be retained by several US administrations supposedly for his above average understanding of economic matters. This guy just happened to ride the world economic boom at the right time while claiming fame for his great steermanship of the US economy. The global meltdown showed everyone exactly who and what Alan Greenspan was, just another greedy crook.