Hospitals & Asylums
Disseminating the World Financial and Economic Crisis and Its Impact on Development HA-14-8-09
By Tony J. Sanders
“Let love be genuine; hate what is evil, hold fast to what is good; love one another with brotherly affection; outdo one another in showing honor” (Rom 12:9-10)
1.The United Nations convened a three-day summit of world leaders from 24 to 26 June 2009 at its New York Headquarters to assess the worst global economic downturn since the Great Depression. The aim is to identify emergency and long-term responses to mitigate the impact of the crisis, especially on vulnerable populations, and initiate a needed dialogue on the transformation of the international financial architecture, taking into account the needs and concerns of all Member States. In his Encyclical Letter: Caritas in Veritate of 29 June 2009 Pope Benedict XVI implored for truth in charity. Together these documents direct the global financial and economic recovery in a world that is too corrupt to admit to Devaluating United Nations Currency Enforcement (DUNCE) in time to spare the developing world. As the result of both market distorting subsidies, to save a credit industry pre-conflict of interest economists were determined to bankrupt, and currency manipulation to artificially inflate the value of the dollar and Euro when they should be devaluated to offset the size of the bailout, under of Article IV of the Section I, paragraph iii IMF Articles of Agreement and the Agreement on Subsidies and Countervailing Measures from the Uruguay Round of WTO talks, the economic and financial slump has spread to the developing world where growth rates have typically been cut in half, per capita income growth has zeroed and the number of hungry and working poor is increasing to record levels exceeding 1 billion, jeopardizing the achievement of the Millennium Development Goals by 2015.
2. The Outcome Document of the United Nations Conference on the World Financial Crisis and Its Impact on Development, explains:
(A) The negative impacts of the crisis, which vary by country, region, level of development and severity, include the following: (1) Rapid increases in unemployment, poverty and hunger; (2) Deceleration of growth, economic contraction; (3) Negative effects on trade balances and balance of payments; (4) Dwindling levels of foreign direct investment; (5) Large and volatile movements in exchange rates; (6) Growing budget deficits, falling tax revenues, and reduction of fiscal space; (7) Contraction of world trade; (8) Increased volatility and falling prices for primary commodities; (9) Declining remittances to developing countries; (10) Sharply reduced revenues from tourism; (11) Massive reversal of private capital inflows; (12) Reduced access to credit and trade financing; (13) Reduced public confidence in financial institutions; (14) Reduced ability to maintain social safety nets and to provide other social services, like health and education; (15) Increased infant and maternal mortality; (16) Collapse of housing markets.
(B) A comprehensive global response to the crisis and undertake actions aimed at, (1) restoring confidence, economic growth, and creating full and productive employment and decent work for all; (2) safeguarding economic, development and social gains; (3) providing adequate support for developing countries to address the human and social impacts of the crisis, in order to safeguard and build upon hard-won economic and development gains to date, including the progress being achieved towards the implementation of the MDGs; (4) ensuring long term debt sustainability of developing countries; (5) seeking to provide sufficient developmental resources to developing countries without unwarranted conditions; (6) rebuilding trust in the financial sector and restoring lending; (7) promoting and revitalizing open trade and investment and rejecting protectionism; (8) fostering an inclusive, green, and sustainable recovery, and providing continued support for sustainable development efforts by developing countries; (9) strengthening the role of the United Nations development system in responding to the economic crisis and its impact on development; (10) reforming and strengthening the international financial and economic system and architecture, as appropriate, to adapt to current challenges; (11) fostering good governance at all levels, including the International Financial Institutions and financial markets; and (12) Addressing the human and social impacts of the crisis.
3. Although the economic crisis began in the industrialized nations and effective legal countermeasures could have resulted in a more equal world with a vibrant economy, resistance to global equal rights has caused the economic and financial crisis to become a global problem that is likely to have short and long term disparate impact on the poorest people. Recent global forecasts estimate that world gross product will decrease by 2.6 percent and world income per capital by 3.7 per cent in 2009. Once the bailouts had begun there was a brief window of opportunity to devaluate the US dollar and Euro to stimulate the export trade, which comprises 2/3 of economic growth, this would have offset the cost of the bailout and created a more equal world, justified by the forced devaluations of certain currencies in 1990s in what are now successful and resilient economies, but the banker’s interest controlled the media and the government, and justice was not done. Most significantly a rapid rise in unemployment has taken place since 2008 and is expected to worsen in 2009-2010. Initial projections of 50 million unemployed over the next two years could easily double and the numbers of working poor are increasing dramatically. The Food and Agriculture Organization projects that crisis will contribute to the number of hungry and undernourished people worldwide rising to a historic high exceeding 1.2 billion. In its midyear economic projections, the U.N. said developing countries have been disproportionately hard hit by the global economic crisis.
4. Growth forecasts for developing countries in 2009 stood at only 1.2 percent compared to 7.7 percent in 2007. At least 60 developing countries will suffer negative per capita income growth in 2009. Only 7 countries — down from 69 countries in 2007 and 51 in 2008 — will register per capita growth of 3 percent or higher this year. Growth of 3 percent is considered the minimum required to achieve significant reductions in poverty. Growth forecasts for developing countries in 2009 stood at only 1.2 percent compared to 7.7 percent in 2007. It is estimated that per capita income growth for developing countries will stagnate in 2009 as a consequence of these rapidly deteriorating external conditions. According to the latest UN forecast, growth of income per capita in developing countries will decelerate significantly. Growth of GDP per capita is expected to drop to zero on average for developing countries, down from 4 per cent in 2008 and almost 6 per cent on average per year during 2004-2007. Also, the recent exchange-rate depreciations have increased the domestic cost of imported food in many developing countries. In January 2009, the FAO food price index still was 27 percent above the 2005 level and 64 percent above the 2000 level. According to the FAO, higher food prices pushed an estimated 115 million people into hunger in 2007 and 2008, raising the total to close to one billion people. Moreover, already before the current crisis, two billion people suffered from micronutrient deficiencies. Even though food prices have declined significantly from their peaks in early 2008, they remain above recent historic trends.
5. Trade flows worldwide sharply declined from the end of 2008 and have continued to decline in the first quarter of 2009 at an annual rate of more than 40 per cent in the three months up to February 2009. The World Trade Organization (WTO) projects that the volume of world merchandise trade could plunge by 9 per cent for 2009 as a whole, while the United Nations World Economic Situation and Prospects expects an even steeper fall of 11 per cent, the largest decline since the Great Depression of the 1930s. The sharpest declines in trade have been observed among Asian economies, in some cases at annualized rates of 50 per cent or more. Both China and India have registered significant year-over-year declines in their exports for the first time in decades. From 2002 to mid-2008, many countries gained from the upward, albeit volatile trend in the prices of oil and non-oil commodities. The intensification of the global financial crisis since mid-2008 has led to a sharp reversal in this trend. Oil prices have plummeted by more than 70 per cent from their peak levels of mid-2008. Prices of metals dropped by 50 per cent, while prices of other commodities, including basic grains, also declined significantly. No significant rebound is expected in the outlook.
6. Now trade tends to be labor intensive, it takes human capital to manufacture and market goods, profit margins therefore tend to be small, so the vast majority of investment capital, not spent on materials, goes to the workers, who spend most of their money on consumer goods which helps to more stimulate economic growth. As the result of the downturn on the stock market from where the government swindled their financial sector bailout funds, there has been a downturn in employment, leading to a downturn in consumer spending and generalized economic slowdown that adversely developing nations and affects millions of individuals. Despite the financial sector bailout net private capital inflows to developing economies declined by more than 50 per cent during 2008, dropping from the peak of more than $1 trillion registered in 2007 to less than $500 billion. Another significant decline of 50 per cent is expected for 2009. The shortage of affordable financing will have major repercussions for infrastructure spending, which is critical for longer-term growth. The World Bank estimates that 98 of 104 developing countries are expected to fall short of covering their external financing needs, with an estimated external financing gap which could rise to $268 billion in 2009 alone, but may well be as high as $700 billion under an envisaged scenario of further declines in private capital flows and increased capital flight. For low-income countries alone, the IMF estimates that the balance-of-payments shock could amount to $140 billion in 2009. While some developing countries have accumulated vast amounts of international reserves, these are unequally distributed (most held by China) and most developing countries have insufficient reserves to cope with the magnitude of the external shock.
7. Aid flows may come under pressure in view of declining gross national income (GNI) in the major donor countries. The global economic slowdown of the early 1990s produced large fiscal deficits in donor countries leading to deep cuts in official development assistance (ODA), which fell from 0.30 per cent of their GNI in 1992 to 0.22 per cent in 1997. Prior to the crisis, ODA flows to developing countries were falling measurably during 2006-2007. In 2008, aid flows from DAC donors increased again, however, reaching almost $120 billion returning to a share of 0.3 per cent of donor countries’ combined GNI. An estimated additional $500 billion in enhanced long-term official financing will be needed to cover fiscal revenue gaps and provide developing countries the required space to protect social spending and finance fiscal stimulus packages during 2009 and 2010.
8. Remittance flows to developing countries have also moderated significantly. Totaling more than $300 billion in 2008, almost three times the amount of annual official development assistance (ODA) flowing to developing countries, remittance flows have become an important source of income support to sustain consumption of families as well as of investment finance in many developing countries. Remittance flows have been more resilient than other sources of foreign-exchange income during recent crises. Remittances, even if declining somewhat, may provide a buffer and a form of social insurance to households in home countries, but are not a good substitute for the lack of adequate social protection. Middle-income countries would be affected most, being the major recipients in absolute terms. In relative terms, however, remittance flows are very important for a number of small, both middle- and low-income countries, in some cases accounting for more than 20 per cent of GDP. For sub-Saharan Africa, the total income from remittances was $20 billion in 2008, more than what the region received in either foreign direct investment or country programmable aid. Remittance flows to Latin America and the Caribbean started to decrease from the third quarter of 2008 with the deterioration of the job market in the United States, source of 80 per cent of remittances to that region. Eastern Europe and Central Asia registered a significant slowdown in remittance flows since the Russian rouble started to depreciate. Remittance flows to South Asia are expected to experience a sharp slowdown in 2009 as a result of the expected deceleration of economic activity in the Middle East where many migrants from South Asia find employment.
9. Massive public funding amounting to $18 trillion or almost 30 percent of the world gross product (WGP) has been made available to recapitalize banks, taking partial or full government ownership of ailing financial institutions and providing ample guarantees on bank deposits and other financial assts. Many countries, mostly developed but also some developing nations have elaborated fiscal stimulus plans to halt the slide into recession and provide new jobs amounting, by April 2009, to about $2.7 trillion, about 4 percent of the WGP, to be spent over 2009-2011. The G20, whose national economies account for 80 percent of the global economy, announced $1.1 trillion in international financial support, which includes a tripling of resources available to the IMF to $750 billion (including a new SDR allocation of $250 billion), additional lending by multilateral development banks of at least $100 billion, and greater support for trade finance. Only a limited share, US $50 billion, of these resources was targeted specifically to low income countries. This reparation for the damage wrought by the financial sector subsidies is insufficient, perverse in its adherence to the failed philosophy of investing in the rich while doing nothing to compensate the humanitarian victims of the crisis, fails to admit the financial sector bailout is failed economic policy, and can only be interpreted as an attempt at re-asserting colonial dominance through a new round of loans the lenders cannot themselves afford and the borrowers do not to want.
10. It makes so much more sense to devaluate the US Dollar from September 2008 and create a wealthier world. In the aftermath of the market distorting effects of the illegal financial market subsidies, at mid-year 2009, the United Nations predicts the global economy will shrink 2.6 percent — a considerably deeper downturn than the 0.5 percent contraction forecast in January, the first such global downturn since the Great Depression. Between 2004 and 2007 the world economy grew at an average of nearly 4 percent per year and 2.1 percent in 2008. However, between September 2008 and May 2009, the market capitalization of U.S. and European banks declined by 60 percent, or $2 trillion. This Depression, in time and space, is an exact imprint of the stimulus package not afforded by international reserves.
11. For a full and speedy economic and financial recovery it is necessary to neutralize the propaganda undermining the truth of the United Nations Conference on the World Economic and Financial Crisis. Specifically, the bailout is a conflict of interest, not the solution, but the cause of the current economic and financial crisis. Despite the summaries of his work in college economic textbooks that equate his name with Great Depression subsidies and work programs, in his General Theory on Money, Interest and Employment John Maynard Keynes, condemned subsides as counterproductive and unpredictable. It is probably true that the economic crisis began in the US sub-prime mortgage markets when the foreclosure market became nationally monitored by RealtyTrac. The phenomenon of negative economic growth however first took hold in the more colonial European Union nations, who had conspired with the International Criminal Court (ICC) to cover up the assassination of prisoners in the Hague and then WHO Director General Lee Jong-wook in Geneva the day before he would have reported this indiscretion to the World Health Assembly 2006, the United Nations thereby censured their balanced development atlas eliminating colonial inequalities and the fickle EU had to be censured. Led by Hospitals & Asylums’ balanced budget, the United States managed to maintain positive economic growth, with only one shock when Manuel Noriega was trafficked to France, but the torture became unbearable after an unwise $200 billion GSE buyout drafted by the spy herself and the United States also had to be censored. Within a week the Bush Administration had bribed the Chairman of the Federal Reserve and a $700 billion bailout package was forced through Congress with the full support of both Presidential candidates. True to economic theory, without any currency reserve with which to finance this bailout the US Treasury bond promises immediately carved-out an exact depression in the relatively free, high employment, stock markets, that was reinvested in the low employment banking sector.
12. Undermining the international economic system there are two legal problems that must be contended with. First, banking, finance, international trade, economics and non-governmental organizations are not legal issues and the infringement of lawyers and the judiciary leads to ineffective, dictatorial financial institutions, whose controlling interest is to be so intractable as to need to be sued so the Court can crack open their piggy bank. The controlling corruption of this age is clearly that of the ICC that, having overthrown the International Court of Justice, has taken over and stricken illiterate the Human Rights Council and wherefrom seized the NGO Section of the UN Department of Economic and Social Affairs. Second, conflict of interest regarding the bribery of witnesses to propagate the bailout, bribery of central banks to proliferate loans, and employment of spies and assassins, that is probably the original problem, is rampant. Truth is therefore very elusive. The truth-tellers are ruthlessly poisoned and propagandists are lavished with honors and publicity. Instead of enforcing the current law the colonial powers forced their illegal bailouts and currency supports by overthrowing the International Monetary Fund first by discrediting their operations and second by completely re-staffing the organization to silence a decade of wisdom that had limited their loan portfolio from $100 billion to $5 billion before it was increased to $750 billion to finance the illegal bailout.
13. Taking into consideration the total State failure of the times, at the heart of the credit crisis is the work of Muhammad Yunus, owner of Grameen Bank in Bangladesh who recently won the Nobel Peace Prize, not Economics, in apology for which he authored a second book titled, Creating a World Without Poverty: Social Business and the Future of Capitalism. As one of the lead proponents of microcredit as the vehicle for lifting populations out of poverty Yunus is both god in Bangladesh, where 90 percent of the population has benefited from these loans, that are 90 percent to women, and boasts a nearly 100 percent repayment rate, and devil whose propaganda regarding microcredit triggered the bailout panic that has undermined the colonial powers where militant feminists threaten the health and safety of the free thinkers post industrial society is entirely reliant upon for socio-economic progress. Yunus himself is the captain of a very nice bank that lends exclusively to the poor, that starts and runs numerous successful corporations around the developing world dedicated to the philosophy of social business. It is this philosophy, central to the operations of the United Nations, that needs elaboration to distinguish social business strategy in rich and poor nations, and to support the universal adoption of literate, self-determinate, socio-economic social banking and business practices in all financial institutions.
14. The primary difference between lending to people in industrialized and developing nations is that in developing nations the markets have not yet been monopolized by large stores that sell everything and with effective social support, a small loan can get a person started in a lucrative business in their community or exploiting natural resources for export. Large loans to developing nations however tend to be particularly detrimental to the elimination of poverty because they are indicative of poor governance, go to the richest of the rich in poor nations, and are a quantifiable loss of sovereignty. In post-industrial nations small loans, payday loans and credit cards are a horrible vice, partly because they come with no social counseling in thriftiness, and partly because the cost of doing business is out of reach with a microloan. The important lesson that Yunus has to teach nations of people affected by the economic and financial crisis is that all financial institutions need to be literate in public and private, guided by socially responsible ideals, responsive to the needs and lifestyles of their customers, strictly socio-economic and providing adequate and accurate social support for their customers to succeed in their freely chosen careers.
15. Art. IV of the IMF Articles of Agreement provides that the essential purpose of the international monetary system is to provide a framework that facilitates the exchange of goods, services, and capital among countries, and that sustains sound economic growth, and that a principal objective is the continuing development of the orderly underlying conditions that are necessary for financial and economic stability, each member undertakes to collaborate with the Fund and other members to assure orderly exchange arrangements and to promote a stable system of exchange rates. To do justice it will be necessary to re-iterate the legal principle of non-manipulation and enforce a mathematical principle of devaluation as both countermeasure and bailout, elaborating upon Devaluating United Nations Currency Enforcement HA-13-11-08, henceforth DUNCE, an acronym the Conference has gone to great lengths to explain, but falls shy of enforcing. The purposes of the United Nations, as set forth in its Charter, includes the objective of “achieving international co-operation in solving international problems of an economic, social, cultural, or humanitarian character,” and “to be a centre for harmonizing the actions of nations in the attainment of these common ends.” For the international economy to resume proper functioning and ameliorate the damages caused by the global recession, it will be necessary to cease both financial sector bailouts and the defiant currency appreciation. These practices of industrialized nations are clearly in violation of Article IV of the Section I, paragraph iii of the IMF Articles of Agreement whereby each member country shall: “Avoid manipulating exchange rates or the international monetary system in order to prevent effective balance-of-payments adjustment or to gain unfair competitive advantage over other member countries.” As the result of propping up financial sector bailouts on the currency exchange, between September 2008 and May 2009, the market capitalization of U.S. and European banks not only declined by 60 percent, or $2 trillion but numerous middle- and low-income countries have seen strong currency devaluations over the past 6 to 9 months, sometimes as strong as between 20 and 50 per cent..
16. Recovery from this economic disaster requires that the United Nations duly process the nearly infinite geographic speciation of bilateral international trade and monetary policy to best promote national interest. The following equation is fundamental to regulating the recovery and governing international monetary policy in the future, but there are other considerations as well and currency exchange rate manipulation must be done voluntarily and with the consent of the State parties, fully informed of the ramifications of their decisions. Although previous bailouts have been rife with loans and cash swaps, these only serve to mislead the economist and the United Nations from the primary variable in any international economic recovery – the Currency Exchange. Economic theory and nearly two decades of practice have proven that currency devaluation stimulates exports, the primary engine of economic growth and currency appreciation stimulates purchasing power. To be more prudent and legal than even the DUNCE response, currency devaluation should be the taken as the first step in response to demands for market subsidies to try to stimulate the economy by reducing prices on the international market before printing money. To simplify enforcement DUNCE proposes a simple mathematical equation to regulate currency devaluation. The equation for devaluating is quite simple. The currency is devaluated by the proportion of the size of the bailout less value of foreign currency reserves, divided by the size of the GDP. This will ensure that the GDPs of the nations who engaged in the bailout do not overvalue their currency and stifle trade, nor do nations, like China, who has accumulated significant foreign reserves, undervalue their currency and glut the market. This same formula can be used by the international financial system to penalize nations for excessive deficit spending. Whereas the United States has defied currency law and national best interest by appreciating their currency in the interest of their client financial institutions the devaluation of the US dollar should be from September 20, 2008. Therefore;
United States of America
Source: CIA World Fact Book December 31, 2007 last updated November 6, 2008
Total US reserves were $47 billion on Sept. 10, $180 billion on Oct. 8 and $329 billion on Oct. 22
17. Recent history has proven the effectiveness of devaluation for stimulating economic growth. In its communiqués of October 2004 and of February and April of 2005, G-7 Finance Ministers and Central Bank Governors stated: “… that more flexibility in exchange rates is desirable for major countries or economic areas that lack such flexibility to promote smooth and widespread adjustments in the international financial system, based on market mechanisms.” The best, most clear cut example noted in DUNCE, is that of China. Beijing began its astonishing rise by devaluing its currency 45 percent in 1994, slashing the prices of exports in half and making imports twice as expensive. China's worldwide trade surplus in manufactures, $31 billion in 2001, hit $401 billion in 2007, a 1,300 percent increase, and may reach $500 billion in 2008. China has shoved Germany aside to become the world's greatest exporter and now leads the world in the export of manufactured goods to Japan and the European Union, as well as the United States. Before 2004, China's manufacturing trade surplus with America was largely in textiles and apparel. But, since then, China's rocketing trade surplus in electronics, computers and parts has far exceeded her surplus in textiles and apparel. China's trade surplus in computers and components rose from $8.1 billion in 2001 to $73.5 billion in 2007. In cellular phones and parts, her worldwide trade surplus grew from $3 billion in 2003 to $50 billion in 2007, and may reach $60 billion by year's end. With her immense trade surpluses, China's reserves have surged from $200 billion in 2002 to $2 trillion. The success of the Chinese was so unbridles that it led to countermeasures on the part of the United States. In its May 2005 “Report to Congress on International Economic and Exchange Rate Policies,” the US Treasury summed-up its evaluation of China’s exchange rate policies as follows: “…current Chinese policies are highly distortionary and pose a risk to China’s economy, its trading partners, and global economic growth…. If current trends continue without substantial alteration, China’s policies will likely meet the statute’s technical requirements for designation as an economy that is manipulating its currency”.
18. The Mexican case of DUNCE, that is extremely similar to the current crisis, is clarified in the Legal Consequence of Off-Season Flu Delivery. In the early 1990s the Mexican economy seemed healthy except for the current account deficit of over $20 billion, 8 percent of gross national product (GNP) in 1992 and 7 percent in 1993, indicating a need to devaluate the currency, but NAFTA was a stunning opportunity to achieve a favorable balance of trade without devaluating, so it was not attempted, with disastrous consequences. However, NAFTA did not go smoothly. At first there were domestic problems. In January of 2004, an armed rebellion of Zapatistas began protesting the NAFTA deal for seven months. Second, the ruling party’s presidential candidate, Luis Donaldo Colosio, was assassinated on March 23. His death set off a financial panic that depleted foreign reserves from nearly $30 billion to $12.5 billion when President Zedillo took office on December 1, 1994. On December 20, 1994, the Mexican government devalued the peso. The financial crisis that followed cut the peso’s value in half, sent inflation soaring, and set off a severe recession in Mexico. To make matters worse , and to cast suspicion that the assassination involved foreign finance, foreign investors decided to engage in what is known as a speculative attack and rather than waiting for the central bank’s reserves to run out through a gradual process of current account deficits, speculators who realized that a devaluation was inevitable attacked the currency through massive capital outflows, totaling $5 billion, to force a devaluation.
19. On January 2 an $18 billion line of credit for Mexico was committed, half by the U.S. government and half by other major governments and a few large private banks. While the crisis deepened, on January 12 the Clinton administration proposed a larger package, $40 billion in loan guarantees. As the result of internal and external stressors brought about by Neo-liberalism and its domestic opponents Mexico did not get to enjoy the account balancing benefits of NAFTA until after they were humiliatingly forced to devaluate the peso. The Mexican economy has however subsequently been quite successful and by 2003 Mexico enjoyed an international trade surplus of $39.8 billion with the USA. According to current account balances, migration and inflationary trends the Mexican peso is in need of great appreciation against the US dollar that is in need of great depreciation, but the bilateral exchange rate has done the opposite. DUNCE reports the response to the Asian financial crisis, that was brought about primarily because of high levels of mortgage defaults was initiated by two rounds of currency depreciation that have been occurring since early summer 1997. The first round was a precipitous drop in the value of the Thai baht, Malaysian ringgit, Philippine peso, and Indonesian rupiah. As these currencies stabilized, the second round began with downward pressures hitting the Taiwan dollar, South Korean won, Brazilian real, Singaporean dollar, and Hong Kong dollar. Governments have countered the weakness in their currencies by selling foreign exchange reserves and raising interest rates.
20. DUNCE reveals the United States has long been a candidate for devaluation. With the record $1.75 trillion budget deficit, $600 billion international trade deficit and negative GDP growth, the US is running an account deficit exceeding 20% of the GDP. Whereas 2/3 of GDP growth is estimated to be the result of exports the United States needs to promote the export economy. A number of studies have estimated the amount of devaluation that the US dollar should undergo for the USA to achieve a favorable balance of trade from 3-30%. According to Stanley Fischer in his IMF Staff Paper for the Mundell-Fleming Lecture Series: Exchange Rate Systems, Surveillance and Advice of July 1, 2008, a currency that is overvalued, or a balance of payments deficit that is so large as to be unsustainable, can give rise to rapid exchange rate movements. One example is the current account deficit of the United States in recent years. There was no exchange rate manipulation; nonetheless, by most measures the currency was and is overvalued. In their unpublished report on Varieties and the Transfer Problem: The Extensive Margin of Current Account Adjustment for the Federal Reserve Bank of New York in 2007 Giancarlo Corsetti, Philippe Martin Paolo Pesenti estimated the amount of devaluation that would be needed to harmonize US balance of payments a symmetric two-country model. They examine the long-run consequences of the effects of improving net export deficits of 6.5 percent of GDP in one country to a balanced position. In the version of the model in which all adjustment takes place at the intensive margin, the authors find that closing the external imbalance requires a fall in long-run consumption (of the country undergoing the adjustment) by around 6 percent and a depreciation of the real exchange rate and the terms of trade by 17 and 22 percent respectively. When adjustment can also occur at the extensive margin, as the result of being able to choose a new trading partner should prices adjust, there is a much smaller depreciation in the real exchange rate and in the terms of trade, of 1.1 percent and 6.4, respectively.
21. Robert Dekle, Jonathan Eaton, and Samuel Kortum in their IMF Staff Paper Global Rebalancing with Gravity: Measuring the Burden of Adjustment of June 24, 2008 found the implications of eliminating current account imbalances for relative wages, relative GDPs, real wages, and real absorption impose severe constraints upon the relative influence of the US GDP. At the extreme, U.S. GDP falls by 30 percent relative to the world’s. With perfect mobility and an active extensive margin, the GDP of the United States, running the largest deficit must fall about 8 percent relative to the largest surplus. Without mobility, however, the decline is 22 percent. If there is no adjustment in supplier sourcing, the extensive margin, either, the decline is 44 percent. Regardless of whether the extensive margin is operative, eliminating current account deficits leads to a rise in the U.S. wage in manufactures relative to non-manufactures of around 30 percent, reflecting a 24 percent real increase for manufacturing workers and a decline of around 5 percent for nonmanufacturing workers. In the long run in which labor is mobile, this wage difference induces an increase in the manufacturing share of employment of 23 percent.
22. The reluctance of the United States to devaluate and of the international community to enforce such prudent action came to light in the United Nations Conference on the World Economic and Financial Crisis and Its Impact on Development and in the contemporary literature focusing on the waning of US and Western dominance such as Paul Starobin’s After America: Narratives for the Next Global Age published by Viking Penguin in 2009. Since the Second World War the dollar has been the predominant foreign reserve currency. Although alternative national and regional currencies (such as the euro) compete with each other as international reserve assets and means of international settlement, the dollar has maintained its predominant role in both regards, a predominance that became firmly established after the Second World War. In a significant sense, therefore, the post-Bretton Woods system has been a “fiduciary dollar standard”. This was identified as one of the main problems of the Bretton Woods system by Robert Triffin in the 1950s: the use of a national currency (the US dollar) as the international reserve currency generated a difficult dilemma: dollar deficits were necessary to increase global liquidity, but at the same time eroded the confidence in the dollar as a reserve currency, which generated in particular increasing risks as to the capacity to maintain the dollar-gold parity.
23. Although abandonment of dollar convertibility and flexible exchanges rates eliminated some of these problems, it created new ones. Instead of uncertainty over the ability to maintain the dollar old parity, the “Triffin dilemma” is now associated with the large swings in the current account imbalances of the U.S. and associated volatility of the dollar exchange rate, and in the long run with the risk of the loss in the value of foreign exchange reserves held in dollars as U.S. external deficits increase. A major part of the fiscal impulse generated in the United States will significantly increase US public debt or, alternatively, lead to large issuance of dollars. Either way, this should precipitate a strong depreciation of the dollar. Given the dollar’s role as the world’s major reserve currency, this may have highly disruptive effects on financial markets. In a dollar-based system net holding of dollar assets by the rest of the world depends on the United States running current account deficits. If the United States stopped running deficits, the shortage of international liquidity would stifle global trade, investment and growth. If, on the other hand, the United States runs growing deficits and supplies adequate liquidity to the world economy, the accumulation of liabilities could undermine the confidence in the dollar, depressing its value vis-à-vis other reserve assets − namely, gold under the Bretton Woods system.
24. The current international system is marred by a number of sources of instability. One of the major problems, as noted, is that as holdings of the reserve currency accumulate over time, confidence in its value as a store of value is likely to wane. After abandonment of fixed exchange rates in the early 1970s, the main manifestation of the creation of excess dollar liquidity was a tendency for the U.S. dollar to depreciate. When the U.S. responds with action to reduce its external deficit, in part to restore the credibility of its reserve currency status, this generates dollar appreciation accompanied by contractionary pressure on the world economy. Irrespective of the phases of the global cycle of liquidity demand, U.S. monetary policies are implemented with little consideration of their international impact and are thus a potential cause of instability in exchange rates and global activity. Since the 1960s, the system has indeed been plagued with cycles of confidence in the U.S. dollar. These cycles have become particularly intense since the 1980s, leading to unprecedented volatility both in the U.S. current account deficit and the effective exchange rate of the U.S. dollar. As a result, the major attribute of an international store of value and reserve asset, a stable external value, has been eroded.
25. There is another sense in which the current system is unstable. With the dollar as the major international reserve currency, unless the U.S. is willing to be the “deficit country of last resort”, the adjustment will take place through a decline in global income. In turn, if the U.S. macroeconomic policies are overtly expansionary, unless other countries accept balance of payment surpluses the adjustment will take place through expanding global income and inflation. In both cases, the result is likely to be growing global imbalances, exchange rate instability and the erosion in confidence in the dollar as a reserve currency. Part of the reason that the United States was able to sustain an expanding external deficit was the decision of many emerging countries to respond to the financial crises in the 1990s by adopting policies to strengthen their external balances. The resulting increase in foreign exchange reserves, along with the increasing reserves accruing to oil producing countries from the rise in oil prices, were invested in official dollar assets and provided the financial counterpart to the rising US external deficits. Emerging market economies, like India, Republic of Korea, Ukraine and the Russian Federation, have seen steep declines of 20 to 40 percent in their foreign reserves, contributing further to downward pressure on the value of their currencies. In March, the Chinese Prime Minister Wen Jiabao said that “we have lent a huge amount of money to the US. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” He called on the US to “maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”
26. To relieve the United States and United Nations of this conflict of interest arising from reliance upon the dollar as the international reserve country the United Nations Conference proposes to substitute the IMF Special Drawing Right (SDR) as the international reserve currency. The current crisis provides, in turn, an ideal opportunity to overcome the political resistance to a new global monetary system. It has brought home problems posed by global imbalances, international instability, and the current insufficiency of global aggregate demand. A global reserve system is a critical step in addressing these problems, in ensuring that as the global economy recovers it moves onto a path of strong growth without setting the stage for another crisis in the future. It is also a propitious moment because the United States may find its reserve currency status increasingly costly. Most ironically is the fact that although the US dollar is the internationally preferred reserve currency as of September 10, 2008 total US reserves amounted to only $47 billion. Hypocritically, although the bailout should have completely drained the reserves US international reserves were shored up to $180 billion by October 8, 2008 and to $329 billion by October 22, 2008. Moreover, the US has embarked on a response to the crisis that will involve large domestic and also potentially large external imbalances, with unpredictable implications for the international reserve system. Thus, both the United States and foreign exchange reserve holding countries may actually find it acceptable to move in the direction of a new system. The former would be able to take policy decisions with less concern about their global impact; and not be relied upon by the international community as a deficit nation, the latter would be less concerned about the impact of US policies on their reserve holdings. The responsibility for managing the global reserve system could be given to the IMF, which currently issues the only global currency, Special Drawing Rights (SDRs), on which the system could be built.
27. The idea of an international reserve currency issued by a supranational bank is not new. It was broached more than seventy five years ago by John Maynard Keynes in his 1930 Treatise on Money, and refined in his Bretton Woods proposals for an International Clearing Union. There currently exist a number of alternative proposals for a new global reserve currency, for how the system might be administered, how the emissions of the new currency might be allocated, and how the transition to the new system might be managed. The global currency could be allocated to countries on the basis of some formula (“quota”), based on their weight in the world economy (GDP) or their needs (some estimation of the demand for reserves). Since developing countries hold reserves which are, in proportion to their GDP, several times those of industrial countries (26.4% of GDP in 2007 vs. 4.8% for high-income OECD countries), to manage the trade and capital account volatility they face, a formula that would allocate the currency according to some definition of demand for reserves would result in larger proportional allocations to these countries. At the time SDRs were created, it was hoped that they would become a major component of global reserves, thus creating a system in which the growth of global liquidity would depend on deliberate international decisions. This expectation has not been fulfilled, as SDRs have been created only episodically and in a total of a little over 20 billion SDRs, which represent only a minimal fraction of current world reserves. So long as the new currency is convertible into any hard currency that itself is convertible into other currencies, it could serve effectively as a reserve currency. The countries participating might also agree to reduce, over time, their holdings of other reserve currencies. Membership in this new “Reserve Currency Association” could be open to all that subscribe to its Articles of Agreement. The advantages of participation are sufficiently great that it is likely to grow over time, embracing more countries, holding a greater fraction of their reserves in the new global reserve currency.
28. A conflict of interest occurs when an individual or organization has an interest that might compromise their actions by exploiting their professional or official capacity in some way for their personal benefit. Conflicts of interest usually manifest in the form of self-dealing, outside employment, discriminatory hiring practices (usually involving one’s family), gifts from friends who also do business, or pump and dump where a stock broker artificially inflates the price of a security by upgrading it to sell it at a high price or spreads rumors to downgrade a security. The presence of a conflict of interest is independent of the execution of an impropriety and conflicts of interest are generally arbitrated under professional and government ethics and by neutral third parties rather than in courts of law and penal sentencing a unique afterthought in the United States Code where conflict of interest is more closely associated with the civil disorder of briber, graft (Chapter 11), child support (Chapter 11A and chemical weapons (Chapter 11B). Geo-political conflicts are generally not construed as conflicts of interest, but although somewhat awkward in the realm of international relations, the neo-liberal Obama administration, particularly in its selection of a Vice, freely admits that he has a conflict of interest, and after review of the law it is true, since the revision of racketeering statute, conflict of interest law is most applicable to the current financial, economic and political crisis, not to mention his own personal torture problem regarding being a bar certified black man in the White House.
29. Since the invasion of Iraq, after which time the economic boom cycle ran its course, Hospitals & Asylums has been the primary mediator of the global socio-economy, the unpaid, un-respected and unquestioned leader of the free world. The economic boom can be attributed to settlement of the largest reparation in history, the Iraq Reconstruction Fund, with the firm direction of a draft New Iraq Constitutional Elections (NICE) invigorated by this first and only settlement by the American Legal System and afraid of losing the economic benefits of the peace dividend there from, by the end of 2004 foreign policy had been redirected towards financing the fairly stable UN Millennium Development Goals. Likewise, besides the resentment of OPEC, the financial and economic crisis is even more closely associated with attacks upon the honor and family of the author of Hospitals & Asylums and lawful countermeasures censuring ne’er-do-well governments, who not having secured the author of their success with royalties, nor compensated him for injury, instead becoming completely dominated by conflict of interest therewith.
30. The financial crisis can be directly attributed to conflict of interest on the part of the oil rich Bush Administration. The Iraq War and other events which helped set off an increase in the price of oil had a further depressing effect on countries which import energy, including the U.S. The magnitude of the increase in energy prices was exacerbated by financial speculation. In the period before the outbreak of the crisis, inflation spread from financial asset prices to petroleum, and then to other commodities and food, as they became financial asset classes subject to financial investment and speculation. Going to war with and militarily occupying two Islamic countries, Afghanistan and Iraq, did not, and doesn’t help international relations between the West and the Islamic world. This military conflict by itself does not however constitute a conflict of interest. The fact that Osama bin Ladin was associated with the Bush Family and that both Bush and Cheney were heavily invested in oil and that Iraq, the nation they defied the United Nations to invade, was one of the founding members of OPEC gives rise to what has been publicly construed in terms supporting designation as a conflict of interest. Cheney so much his Halliburton kickback, of greater value than his salary, was brought into question as the salary of government officials and employees payable only by the United States under 18USC(11)§209 definitely compromised Halliburton contracting as an Act Affecting Personal Financial Interest under §208 and clearly constitutes Compensation to Members of Congress, officers and others in matters affecting Government at §203.
31. Although not public enough knowledge to have given rise to public allegations of conflict of interest the repeated military occupations and coups in Afghanistan could be attributed to a conflict of interest with subversive international law enforcement and multi-national armed forces, instead of the rightful pharmaceutical purchasers, regarding the establishment of a National Opium Agency, and quota system, that as 25% of the national economy, could theoretically extend the authority of the government in Kabul to cover the entire nation, that constitutes a failure of diplomacy on the part of Afghanistan under §208 to disclose their financial interest in a National Opium Agency (NOA). It would be unjust not to attribute the current financial and economic crisis to the impoverishment of Afghanistan. There was an economic recession after the 9-11 suicide attacks and the invasion of Afghanistan, and the economy did not pick up until after the invasion of Iraq whose oil interests appealed to capitalism. The plague of injustice in industrialized nations is very similarly focused on illiterate Taliban militants, Taliban means students in Arabic, and al Queda operatives, al Queda means the base in Arabic, and to put it all together, the leading cause of death in the United States is A&M University President. Secretary of Defense Robert Gates. Whose continuing employment, it must be added, is an aggravated offensive against the restriction on former officers, employees and elected officials of the executive and legislative branches at §207.
32. The DUNCE notes that the inflation in the OPEC controlled price of oil, and countervailing increases in energy, distribution and food prices, rose to the point where there was a significant shortage of money to meet costs and banks had to curtail their lending, so people and corporations could not cheat their way through the hard times, resulting in insolvency, bankruptcy, lay-offs and more foreclosures. The economic warfare of OPEC, that broke the camel’s back, was clearly in retaliation for the occupation of Iraq, a founding member of OPEC, and Afghanistan, and it was permitted to occur because the Bush administration and Congress and allied colonial leaders in the EU could benefit from the high cost of oil and energy, as the result of their own personal investments. The large sums of money and heated military diplomacy amounted to both Bribery in contravention to the ban on Compensation to Members of Congress, officers and others in matters affecting Government at §203 and Acts Affecting Personal Financial Interest at §208. As the result, energy interests went unchecked, and made enough profit price gouging to seriously damage the Social Services Block grant, that is from time to used to pay low income energy assistance, and to distort the market with their flight when regulators clamped down. Alan Greenspan himself admitted that he made a mistake by not regulating the markets more.
33. The massive profits made by oil and energy companies were unethically laundered in the stock markets, while poor consumers were massacred by the domestic spying mental health system trying to apply for low income energy assistance to pay the domestic spying energy companies. Much of the stock market bubble was the property of OPEC nations, who in retaliation against the Islamic deaths in the wars in Afghanistan and Iraq, have a vested interest in overthrowing the United States, who control or have considerable leverage in a lot of the US energy interests and who would have been prevented from investing so heavily in a properly regulated stock exchange. When confronted by President Bush, regarding increasing petroleum supply to decrease prices, OPEC explained that the oil price bubble was not in fact responsive to the law of supply and demand, but was instead the result of speculation on the stock market.
34. Aggravated energy prices the sub-prime adjustable rate mortgages were beginning to foreclose as the premiums became unaffordable for many low income borrowers. The Adjustable Rate Mortgage Ban of 20007 held the adjustable loans were a defective product but the legislature preferred to entertain the receipt of commissions or gifts for procuring loans without end under §215. To make matters worse the unaffordable loans had been securitized without regard for confidentiality and this was accepted loan or gratuity by financial examiners in contravention to §213. By 2008 the US economy was struggling and the European economy was beginning to go into recession, unable to afford the just compensation for Noriega v. United States. The Housing and Economic Recovery Act of 2008 P.L. 110-289 of July 30, 2008, sponsored by Speaker Nancy Pelosi, cost $200 billion and put Fannie Mae and Freddie Mac into conservatorship and immediately led to the highest number of foreclosures in history. In August the total number of U.S. properties that received foreclosure filings as well as the national foreclosure rate were the highest in any month since RealtyTrac began issuing reports in January 2005. 303,879 foreclosures in August 2008 was an increase of 12% from the previous month and 27% from August of the previous year. The flaw in this bill, typical of all Pelosi does is that every section set up a spy network, although spying on sensitive private financial information by RealtyTrac is probably the real cause of the large number of defaults in the first place. As a conflict of interest, with disastrous results, like all that Pelosi tampers with, the Housing and Economic Recovery Act constituted the offer of loan or gratuity to financial institution examiner in contravention to §212.
35. The Presidential political campaign was a big let down. Although, after two terms, liberation from the Bush Administration was guaranteed, torture had become the foundation of the economy and life was hard. The campaign went well until June when Obama betrayed his constituency to vote for FISA domestic spying re-authorization in contravention to ban on prosecuting claims against the United States under §205(a)(1). Having plugged into the torture network, Obama’s next move was to come to my then hometown, Cincinnati, Ohio, for a campaign stop with the black mayor and elector, who was similarly craven to the armed force but less guilty in the killing civilians in front of my face, as noted in Butler County v. Hamilton County, that unethically amended racketeering statute to omit the labor racket, an offer for the procurement of elective office §210. The next day Obama began his foreign tour in Afghanistan with a massacre of civilians for which he bears responsibility as an officer or employee acting as an agent of foreign principal under §219.
36. Obama was swiftly brought to trial in Human Rights Campaign (HRC), Citizens Commission on Human Rights (CCHR), et al, plaintiffs v. US Presidential Candidates Barack Obama and John McCain whose foreign policies fail Asia and the Near East (ANE), US Congress in defense of Title 22 Foreign Relations and Intercourse (a-FRaI-d) and the Court of International Trade (CoITUS), defendants to reparate for the civilian casualties, make peace with Afghanistan and to reform the US foreign service. In this, like the personal injury claims, Obama failed to appear. Instead with the counsel of now Attorney General Eric Holder, he embarked on his biggest crime – selection of Joseph Biden to be his Vice President in contravention to §211. As a sponsor of the Customs Court Act that created the CoITUS, that bears superior criminal responsibility for the HIV/AIDS epidemic that has tortured 33 million and killed 11 million, and the more recent Violence against Women Act it now appears not only that Jo Biden had his daughter and wife killed in a deal with the devil in his first run for office, but that Obama killed both his mother and father. To bring Holder into line with former ABA President Gray, an African American opposed to the judicial slave trade, Holder was reprimanded for selecting the person who had killed more black people than anyone else in the world.
37. The economy was not pleased with this selection. In August the credit extensions declined for the first time in recent history and foreclosures were at their highest. The banks weren’t going to finance torture and borrowers lost all hope of relief there from. In September I filed my quarterly report early to inform the United States government that I would no longer be serving them, skipped town and remain a fugitive from copyright royalties, much improved without a family to incite the residential torturers or get hired in the commission of murder for hire by government officials in contravention to the petitioner’s interpretation on Acts Affecting Personal Financial Interest §208. Despite, or more probably because of, the obvious failure of the plan to place Fanny Mae and Freedie Mac in conservatorship the Bush Administration placed an offer for procurement of a Federal Reserve bank loan and discount commercial paper is contravention to §214. On the day my newsletter would have counseled Congress the administration force a three page $700 billion Legislative Proposal for Treasury Authority to Purchase Mortgage-Related Assets introduced on September 20, 2008 whose only legal reference was to bribe witnesses in support of the bailout under §201. The bailout quickly grew to a 109 page Emergency Economic Stabilization Act H.R. 3997 that failed to pass in the House by a vote of 205 to 228. Following this defeat, the stock market lost $1.2 trillion in a single day, some of which was restored in the days following. Caving in to this market manipulation by the hundreds of billions secretly invested by the Bush Administration and allied financial institutions, the Senate passed the measure on a bipartisan vote of 74-25.
38. Betraying their constituents both Presidential candidates rushed to Washington to advocate for the bailout bill in contravention to §201(b)(2) On Friday October 3, 2008, 29 lawmakers changed their minds, far more than the dozen needed, and the House passed a second version, titled A bill to provide authority for the Federal Government to purchase and insure certain types of troubled assets for the purposes of providing stability to and preventing disruption in the economy and financial system and protecting taxpayers, to amend the Internal Revenue Code of 1986 to provide incentives for energy production and conservation, to extend certain expiring provisions, to provide individual income tax relief, and for other purposes H.R. 1424, by a vote of 263 to 171. The bill number previously belonged to the Mental Health Parity Bill and by passing this bill Congress and the President elect declared themselves to be insane until 2010 to allow the former administration to flee with their stolen money and the honor that the fascists were not the worst for the economy when it is obvious that the social liberals are totalitarians. The large bankers didn’t really want the bailout but were convinced to take the discount loans. For every bailout bond the stock market suffered severe withdrawals of nearly exactly the dimension of the bailout. Investing the bailout in financial institutions has proved devastating to employment because of the law of diminishing returns in regards to the employment per investment in banks in comparison to the stock market.
39. This nearly brings us to the status quo. As the result of his disastrous choice of Vice, Obama has had a hard time getting his nominees through the Senate. As one of his first appointees Obama named Peter Orszag to be the Director of the Office of Management and Budget. He was formerly the chief of the Congressional Budget Office, but never managed to balance the budget, even when confronted with such a document three years in a row by Hospitals & Asylums. At the time of his appointment I had just subscribed to the CBO newsletter and been scared away by his only statement regarding the acceptance of an honor from the Institute of Medicine in contravention to §201(b). Thus the most imbalanced person in the world sought to poison his dominance. To make matters worse Orszag sought to secure the continuing financial crime enterprise under §225 by requiring his approval on all employment decisions. It is ridiculous that the government’s worst problem, who had gone so far as to claim to be medically armed, would be given control over all hiring decisions. The result is that the truth has badly damaged by the bribery of witnesses §201 who take all the grants and honors for propaganda supporting the bailout, such as his mentor who led the UN Expert Report on the World and Financial Crisis and by his monopolization of the acceptance or solicitation to obtain appointive public office under §211.
40. The other financial criminal is the Chairman of the Federal Reserve. Before securing this offer for procurement of Federal Reserve bank loan and discount commercial paper under §214 the Federal Reserve newsletter had gone without citing authors for nearly 6 months. In a stupor they blindly agreed to steal from Peter to pay Paulson and sabotaged the economy to abet the Bush administration in making their get away. To achieve the objective of a balanced budget, which is the priority of a good government, these two financial criminals shall have to be overcome. The Federal Reserve will have to be ordered to get their scholarship back on track, and be subjected to the investigation sought by Rep. Ron Paul (R) under the theory that the bailout was a mistake and all funds not already distributed must be returned and funds distributed repaid as swiftly as possible. Orszag will have to relinquish his grip on federal hiring, cease promoting propagandists in his inner circle and learn to respect his status as the most corrupt official in the government.
41. The problem is that as the result of bribery, graft and conflict of interest the United States failed to make a clean break from Bush and Dick v. Her Majesty the Queen. Sections 1-3 of Hospitals & Asylums Political Platform 2009-2012 call for the replacement of Vice President Jo Biden, Speaker of the House Nancy Pelosi, Federal Reserve Chairman Ben Bernanke and Secretary of Defense Robert Gates. Let us first look at the case of the Vice President. This is the second worst pick Vice President in a row and the Presidential campaign must not again be allowed to privately militarize with “the most homicidal official in the world”. The XII Amendment needs interpretation in light of these hell fires. The XII Amendment is for the most part obsolete. Candidates for President and Vice President are not voted for in “distinct ballots”. Nor are vote recounts typically the domain of Congress but instead the judiciary. Most importantly, for the last two administrations the clause “But no person constitutionally ineligible for the office of President shall be eligible for that of Vice-President of the United States”. Dick Cheney should have been ineligible because he was the Secretary of Defense for Bush Sr. a war president with one just war and one unjust war whose primary victim remains behind bars after the expiration of his term.
42. Jo Biden should have been ineligible because as the result of his legislation he bears superior criminal responsibility for the HIV/AIDS epidemic, the sharp spike in divorce rates and the current spike in militant feminist domestic violence, he butchers the English language and as the result of his actions is responsible for more wrongful deaths than anyone else before witnessed, until the next election. To prevent further degradation of the reputation of and quality of life in the United States, in the future the XII Amendment must be interpreted by the political parties so that the President is the most popular candidate and the Vice President is the runner up. In this case the proper candidate would have been Hillary Clinton. She was only a few percentage points behind Obama, she would have also brought a lot of experience balancing the budget, and made for a beautiful platform of non-discrimination, both racial and sexual, instead, racial and sexual violence runs rampant, and the perpetrators are not incriminated. It is therefore proposed, that in the best interest of the United States, Hillary Clinton lead a counter-coup, to seize the office of Vice President under the XXV Amendment to the US Constitution.
43. As for the rest of the officials compromising the integrity of the new administration, it will be necessary, for the defense, welfare and liberty of the nation, to remove them from offices of trust. Nancy Pelosi is a spy, she makes no bones about it, a large percentage of her constituents have fled the jurisdiction of her secret police. As long time member of the Permanent Select Committee on Intelligence she is not morally qualified to be the Majority Party leader. Intelligence does not qualify as intelligent and the Permanent Select Committee has no reports, treatise or atlases to back up their claim of intelligence. In practice she is the most ruthless suppressor of intelligence among the people in recent memory. She should be removed from her leadership position as Speaker of the House on grounds that as the result of her close association covering up the atrocities of the Bush administration to the point she censured the case against him this association constitutes the bribery of a public official under §201and acceptance or solicitation to obtain appointive public office, namely Democratic leader and Speaker of the House, constitutes a conflict of interest under §211 and as the result of her conviction regarding private energy stocks that biased her judgment is guilty of Acts Affecting Personal Financial Interest at §208. Let her be removed from office of Speaker and throw her to the fair election of her constituents in the now small village of San Francisco.
44. Federal Reserve Chairman Ben Bernanke conspired with the Bush administration to sabotage the economy, first by being completely illiterate by the standards of his office, then by turning the financial crisis into an economic crisis by the offer for procurement of Federal Reserve bank loan and discount commercial paper under §214. Bernanke needs to be replaced because the bailout was a mistake, he is responsible for the disastrous bailout, the bailout was a ploy of the Bush administration, as the result of the bailout he and the economy still works for the Bush administration, and most of all because this economic crisis resulted from his policy of financial illiteracy. There is no position more determinant of a loss of sovereignty than that of Secretary of Defense. Robert Gates was appointed by Bush. He was the President of A&M University and is both cause and result for the dramatic surge in militancy by institutions of higher education. Although he is so skilled as to plagiarize the foundation of African Command from Hospitals & Asylums, he has not brought peace to Afghanistan, he is a Bush crony and needs to be replaced, the Honorable Anthony J. Principi, former Veteran’s Secretary and fiscally responsible BRAC Commissioner, is recommended for the position although §211 jeopardizes the political integrity of 26USCI(F)(VI)§527. The First Lady needs to cease her wage discrimination in the pay rates of her social secretary, from $113,000 to $114,000 and social deputies from $65,000 to $70,000 a year.
45. For a successful economic recovery the most important thing to do is for the federal government to demonstrate cognizance that the bail-out was a mistake. The sub-prime crisis, which led to a wider crisis in credit markets, was partly engendered by an “excess” supply of liquidity and the failure of the Central Bank in the United States and some other advanced industrial countries to act to restrain liquidity and dampen the speculative increases in housing prices. The problems of bad lending were aggravated by high leverage and other risky behaviour, as well as by a lack of transparency. The resulting collapse of credit reinforced the underlying weakening of aggregate consumption, leading to a rapid decline in global aggregate demand. Monetary policy operates by increasing the availability of money and credit and easing the terms at which credit is available. Much of credit availability is mediated through the banking and financial system. Providing more liquidity to financial institutions may not, however, lead to more lending. Banks with large risks to their balance sheets, which have seen large erosions in their net worth, and facing prospects of high default rates on existing risky loans, are not disposed to increase lending. United Kingdom was warned by Standard and Poor’s Ratings Service that it may lose its triple-A credit rating on account of its projected debt-to-GDP ratios. This is a sobering event for the United States as well, given that U.K. projected debt levels are about the same as those projected for the United States levels over the next five years. This suggests either that the United States could face a similar threat of downgrade or that some other factor, such as the dollar being the de facto world reserve currency, prevents that outcome.
46. But a country’s status as the reserve currency issuer may well depend on its underlying fiscal health. When policy intervention involves the purchase of the liabilities of particular private sector issuers this may be equivalent to an implicit subsidy on the financing costs for that sector. If it is restricted to very large firms it may place small and medium sized firms at a disadvantage. Bail-outs of financial and non-financial institutions have become a distinguishing feature of the macroeconomic policy responses to this crisis. They have changed the expectations of the future development of global financial markets. The efficiency of the bail-outs will affect the pace of recovery, the level of the national debt, and the ability of a country to pursue a broader range of objectives. One of the important goals of the bail-outs should be to facilitate a restructuring of the financial sector in ways which enhance economic stability and growth. Bailout decisions must be made with future design of financial structure in mind. The financial system of the future must avoid the structural flaws revealed in the recent crisis. In many countries, the financial system had grown too large; it had ceased to be a means to an end, but an end in itself.
47. The ideas and ideologies underlying key aspects of what has variously been called neo-liberalism, market fundamentalism, or the Washington consensus doctrines have been found wanting. As the international community approaches the challenge of working towards a quick return to robust and sustainable growth and a reform of international institutions and arrangements that ensure long term democratic, equitable, stable, and sustainable growth, it does so with a broader respect for a wider range of ideas and perspectives. At the beginning of this decade, the U.S. fiscal picture was bright. After running deficits every year from 1961 to 1997, the federal budget was in surplus in fiscal year 2000 for the third year in a row, and the surplus was an all-time high – $236 billion, or 2.4 percent of GDP. Future fiscal prospects looked strong as well. The Congressional Budget Office (2001) projected rising surpluses over time, totaling $5.6 trillion over the succeeding 10 years. Despite the well-known shortfalls in Medicare and Social Security finances, estimates of the long-term fiscal outlook showed the government as a whole in manageable shape, at least for the succeeding 70 years. A key fiscal concern was the prospect of paying off all redeemable public debt, which was expected to occur by the middle of the decade. In the absence of a market for Treasury debt, leading policy makers and academics were concerned with how monetary policy would be conducted and where investors would find safe assets.
48. CBO projects the 2009 deficit to be $1.7 trillion, about 12 percent of GDP. This represents the largest deficit share of the economy since World War II. In 2009, the U.S. federal deficit will be larger than the GDP of all but six other countries in the world. The deficit would be significantly larger but for record-low interest rates, which have substantially reduced federal net interest payments. The 2009 budget figures are the most extreme in more than 50 years. CBO’s baseline projects fiscal year 2009 revenues of 15.5 percent of GDP – the lowest share since 1950 – and expenditures of 27.4 percent of GDP – the highest share since 1945. At 11.9 percent of GDP, the deficit share is at its highest since the end of World War II, and debt held by the public will rise to 54.8 percent of GDP, the highest share since 1955. The 2009 deficit and debt would be even higher were it not for the extremely low interest rates on government debt that have recently prevailed. Whereas debt service accounted for $253 billion – 1.8 percent of GDP – in fiscal year 2008, it is projected to drop to $170 billion – 1.2 percent – in 2009, despite the increase in debt relative to GDP.
49. A prolonged credit boom, supported by low interest rates and lax underwriting standards, and the expectation of rising house prices, came to a halt in 2007. The burst of the U.S. housing bubble led to rising foreclosures, which further depressed house prices. Foreclosures are on the rise because of household debt overhang,24 coordination failures in arranging pre-foreclosure. About 10 million U.S. homeowners reportedly have negative equity, and more than half of subprime borrowers have debt-to-income (DTI) ratios exceeding 38 percent, a level below which loans are generally deemed affordable in the United States. workouts, and legal impediments to loan workouts. The U.S. federal government has introduced or sponsored a number of homeowner “rescue” programs, starting with the FHA Secure program announced in August 2007, and more recently the Hope for Homeowners (H4H) program,27 which was activated on October 1, 2008. These efforts have met with only very limited success in stemming foreclosures. In addition, the Federal Deposit Insurance Corporation (FDIC) has introduced a streamlined modification program for the mortgage loans it picked up from failed mortgage lender/servicer IndyMac. A similar program for Fannie Mae and Freddie Mac guaranteed mortgages loan modification does not involve fees or other charges for the borrower. The general principles are that people can walk away from mortgages they can’t afford, refinance mortgages at 90% of the houses current appraised price, ensuring all debt payment are at or below a certain percent of income, Several large U.S. banks have recently designed voluntary workouts of distressed mortgages. For example, Citigroup announced early November 2008 that it would modify terms on mortgages with debt-to-income ratios in excess of 40 percent. Modifications would include a lowering of the interest rate, extension of the terms of the loans, and as a last resort a reduction in principal. Also, some states have imposed foreclosure moratoriums, typically of three-to six months long, but these are just temporary palliatives that are unlikely to be effective in the long run in the absence of a more comprehensive approach.
50. CBO evaluates the $700 billion appropriation for TARP to increase the deficit by $336 billion in 2009 but to increase the public debt by more than that amount. Similar treatment of the Treasury’s purchases of mortgage-backed securities contributes $248 billion in debt accumulation in fiscal year 2009 but very little to the deficit. These interventions have larger impacts on the accumulation of federal debt than on the current deficit because of the estimated increase in offsetting financial assets. In contrast, the budgetary treatment of Fannie Mae and Freddie Mac adds more to the deficit than to debt. As in the cases just considered, CBO treats these government-sponsored enterprise (GSE) bailouts on a present value basis when computing the current-year deficit, estimating that guaranteeing the GSEs’ liabilities will add $218 billion to the 2009 deficit. But unlike in the cases of TARP and related Treasury asset purchases, CBO adds nothing to its calculation of the public debt in connection with the GSE guarantees. This approach can be justified by the argument that the federal bailout did not create any new public borrowing, and that legal considerations constrain what can be included as “debt held by the public.” On the other hand, if these agencies are really now part of the federal government, it would make sense to add all of their very considerable liabilities – at the end of 2007 the GSEs had combined outstanding debt of $1.5 trillion and had provided mortgage-backed securities totaling $3.5 trillion – to the national debt.
51. More than 40 states were forced to reduce their budgets midway through fiscal year 2009 and 47 states are expected to face budget shortfalls in either or both 2009 and 2010. State budgets are expected to shrink by 2.5 percent in 2010, well below the historical growth rate of 5.9 percent. Total projected budget shortfalls are estimated to be $145 billion in 2010 (about 19 percent of state general fund allocations) and $180 billion in 2011. California’s budget shortfall is the most severe. In February, the state legislature took steps to close a two-year budget shortfall in excess of $40 billion, only to find itself with a $21 billion shortfall in May.
52. To bring the fiscal and economic crisis to a close the federal government must admit that the bail-out was a mistake. Not only did the bail-out lead get the United States into record levels of debt, but the bail-out caused the financial crisis to metastasize into an economic crisis. For every bail-out bond that was written an equivalent amount was withdrawn from the stock market. By investing in only the largest banks relatively free capital in the stock markets, that was used to employ large numbers of workers, were frozen in very low intensity work in banks. The justification for the bailout, to recapitalize the credit industry was ludicrous. The adage goes, “neither a borrower nor a lender be”. The credit industry is not known for being virtuous, or truthful, and in recent years has become so unpopular amongst economist that the practice was nearly eliminated from the International Monetary Fund. The bank recapitalization scheme was completely arbitrary, the government suddenly upped their requirements for financial institution recapitalization, and billed taxpayers for it. Banking corporations struggling with sub-prime loans should have gone to bankruptcy court or restructured on their own.
53. The government intervention was a total failure, it served only to turn financial problems, stemming from the inability of Congress to recall adjustable rate mortgages and securitization industry that had sprung up around the defective product, into a full blown economic crisis equivalent, in damage to employment and consumption, to the Great Depression. It should be noted that the Great Depression was aggravated by similar unwise social liberal policies of government work programs and unaffordable bank recapitalization programs that only served to prolong the crisis. The fastest way out of the financial and economic crisis is for Obama to allow Hillary Clinton to resolve the personal issues, admit the bail-out was a mistake, repeal all bail-out legislation, return all unspent bail-out funding to the treasury to eliminate the debt incurred demand the speedy repayment of loans already made there under and write off the social protection spending for taxpayers as somewhat wasteful and provoking corporations to fascism and banks to totalitarianism. The real financial solution to the health of the economy is to adequately staff the Social Security Administration so as to process the disability petitions and get to the bottom of the torture as directed in the Social Work Act of 2008.
54. To enforce international economic regulation, the reliance upon the dollar peg as an international reserve currency that has encouraged unsustainable deficit spending on the part of the world’s largest economy must be overcome, but to achieve the political consensus needed to enforce the law against the United States and Europe, the international socio-economic and political system must be totally overhauled. In his Encyclical Letter: Caritas in Veritate Pope Benedict XVI states, the development of peoples depends, above all, on a recognition that the human race is a single family working together in true communion, not simply a group of subjects who happen to live side by side. In the face of the unrelenting growth of global interdependence, there is a strongly felt need, even in the midst of a global recession, for a reform of the United Nations Organization, and likewise of economic institutions and international finance, so that the concept of the family of nations can acquire real teeth. One also senses the urgent need to find innovative ways of implementing the principle of the responsibility to protect and of giving poorer nations an effective voice in shared decision-making. This seems necessary in order to arrive at a political, juridical and economic order which can increase and give direction to international cooperation for the development of all peoples in solidarity.
55. To manage the global economy; to revive economies hit by the crisis; to avoid any deterioration of the present crisis and the greater imbalances that would result; to bring about integral and timely disarmament, food security and peace; to guarantee the protection of the environment and to regulate migration: for all this, there is urgent need of a true world political authority. Short of ratifying the United Nations Charter Legitimate Edition (UNCLE) this means, in light of the corrupt civil society intelligence system undermining the economy, that the freedom of political participation must be protected against prosecution or other forms of violent retaliation or investigation, but kept in confidence that those in political, judicial and economic power are censurably corrupt and their blasphemy has stirred the passions of the people to violence and genocide along economic lines, so that the truth will illuminate the way to solvency.
56. The Bretton-Woods institutions, created in July 1944, have been held responsible for the current economic and financial crisis. This is fair because the economy is their responsibility and they are far from non-colonial democratic institutions. To be fair however, the Bretton-Woods institutions are entitled to a defense against a hostile take-over by the military powers that are actually, directly and indirectly, undermining global civil society and socio-economy, through their new toxic trans-Atlantic slave trader, the Prosecutor of the ICC, whose trademark shamelessly infringes on the International Chamber of Commerce, and has turned the entire United Nations into a metaphysical warship of satan, Hebrew for prosecutor, the homicidal intelligence network it was designed to be. The United Nations itself has always boasted what is probably the most extraordinarily undemocratic form of government in the world.
57. While war deaths have declined dramatically since its foundation after the Second World War, the United Nations has malevolently set the stage for an alarming increase in the number of civilian casualties from disease and poverty. Giving rise to widening income gap between wealthy and poor nations, after a brief honeymoon of liberation from colonialism, the United Nations has drafted some immortal human rights treaties but is otherwise detrimental to global governance, the devil having undermined the Millennium Development Goals. For all their talk of helping developing nations prosper the United Nations is crippled when it comes to giving love because the truth of the matter is that the United Nations is the boldest faced military dictatorship of any government in the world. This fault appears to have arisen at the San Francisco Conference of October 24, 1945, at the height of the Second World War, that maliciously re-drafted the UN Charter to worship war while viciously cursing the socio economy with every trick in the book, in spite of moral and material contributions of the original author(s), whose good intentions became much clearer in the redrafting of what is coined the United Nations Charter Legitimate Edition (UNCLE).
58. Hospitals & Asylums Political Platform 2009-2012 notes that for centuries moral reflection on international relations was focused on matters of war and peace. These issues are still important but since WWII and the foundation of the subversively designed United Nations, world poverty has overtaken war as the greatest source of avoidable human misery. More people, some 300 million, have died from hunger and remediable diseases in peacetime in the seventeen years since the end of the Cold War than have perished from wars, civil wars and government repression over the entire twentieth century. Some 830 million human beings are chronically undernourished, a number that has increased to over 1.2 billion as the result of the current economic crisis, 1.1 billion lack access to safe water, 2.6 billion lack access to basic sanitation, 2 billion lack access to essential drugs, 1 billion lack adequate shelter, and 2 billion lack electricity, 774 million adults are illiterate and 218 million children between five and seventeen do wage work outside of the household. The great catastrophe of human poverty is ongoing, as is the annual toll of 18 million.
59. We face victims of natural calamities, victims of historical or contemporary wrongs such as colonialism, slavery and genocide, some committed by our own country, and victims of domestic injustice associated with race, gender, ethnic identity, religion or social class. We confront global threats and dangers such as the proliferation of weapons of mass destruction, climate change, new infectious diseases as well as personal responsibilities towards our family, friends, and professional associates. By many measures, global income inequality is high and rising. In 1950, the average Ethiopian had an income 16 times less than that of someone living in Europe or the United States of America. Half a century later, Ethiopians have become 35 times poorer. The reason for these widening inequalities is now clearly the fault of the United Nations’ flawed design as a military dictatorship, who’s socio-economic capabilities are undermined by military domination, ambition and violent tendencies that know no bounds.
60. The UN Charter Legitimate Education was drafted on February 28, 2009 to create a civilian form of government that the parliaments of the world could consent to elect in general elections with a clean conscious. The general principle of the reform is to set down the General of the United Nations (GUN) and elect a Secretary of the United Nations (SUN) in general elections around the world on the same day. In drafting the document however numerous other issues came to light. To cut down on unnecessary operations and viciousness of the domestic strife and conflict of interest in job seekers and petitioners to the United Nations, the term organ is changed to branches, in hopes of promoting the human family. The name of the General Assembly is changed to Parliament to allow for the freedom of expression by peaceful political parties of States. The name of the Economic and Social Council (ECOSOC-k) is changed to Socio-Economic Administration (SEA) to eliminate organized crime, the laundering of monetary instruments and murder for hire that is the current reward for socio-economic behavior. After much protest by Member States the permanent membership to the Security Council is abolished. A 1% income tax, that would appear on worker’s paystubs, is set for wealthy nations to administrate social security benefits to individuals in least developed countries. The Trusteeship Council is repealed and replaced with a Human Rights Council that does make reference to organs protected by a Committee against Torture. So that money does not continue to be cursed in Art. 66 some Chapters and Articles have been renumbered and the Preamble now refers to enforcing Chapter IX, so that “Nein” would be on the tip of everyone’s tongue when the issue of military action arose, as appears to have been the original intention of the author before the San Francisco conference sabotaged it. To ratify this Charter before it is brought before a referendum of all the people in the world a Parliamentary Conference is called for.
61. The ICC bears individual criminal responsible for the current economic and financial crisis. The ICC This criminal responsibility cannot and must not be transferred to financial and political institutions. For the most part, the inequalities, laundering of monetary instruments and murder for hire associated with these institutions, can be easily traced to the inequities of the lawyers and generals who have fished their way into the global economic institutions at the expense of the book worms, for blatantly colonial reasons, for the gain of what we shall disdainfully call the institutions of higher levels of toxicity. In decrying the fisherman it is critical to distinguish between the hook of Judgment and the social safety net, so that social diversity prevents the toxicity of any one school of fish from poisoning the decision-maker. Justice is a martial art focused upon the application of the law to redress individual criminal responsibility, while Justice frequently intervenes in civil and political matters, this should be only to disentangle the ambitions of its members from civil society. Economics, on the other hand, deals with money and the manufacture and distribution of all sorts of goods and services needed for the functioning of society, like public health economics is a statistical study of populations to direct the individual to the most rewarding behavior. The rise of the International Criminal Tribunals and Court have been problematic, to say the least. The International Bar Association ICC ICC Monitoring and Outreach Programme called the International Criminal Tribunal for the Former Yugoslavia “politicized” and alluded to violence on the part of the ICC, without elaborating. More specifically. The International Forum for Social Development in New York treatise upon Social Justice in an Open World: The Role of the United Nations by the Department of Economic and Social Affairs Division for Social Policy and Development in 2006 re-distributed on World Social Justice Day 20 February 2009 bitterly complains that the ICC has undermined social justice.
62. To provide a legal defense in the spiritually treacherous waters of criminal prosecution, there are five issues for the mandatory reform of the ICC. First, the ICC needs to change its name to International Penal Court (IPC) so as not to infringe upon the International Chamber of Commerce (ICC). Second, the title Prosecutor is distasteful to the Hebrew language and should be changed to Attorney who should devote more than half of his practice to the discipline of corrupt judicial officers, from both developed and developing nations. Third, the ICC needs to be expelled from the H(Pl)ague whereas they have overthrown the ICJ and as the result of their behavior their prison fails to uphold Dutch standards. Fourth, the ICC must cease seizing the UN and Non Governmental Organizations specifically this must be the last ICC High Commissioner of Human Rights and the seizure of the NGO Section must be immediately redressed and victims compensated by the apologetic NGO Section. Fifth, the Statute of the International Criminal Court should not infringe upon the work of the Secretary General of the United Nations but instead declare their inferiority to the International Court of Justice.
63. The Report of the Secretary-General declares a fundamental reform of the governance structure of the Bretton Woods institutions is needed, the Expert Report concurs. At the Doha Conference on Financing for Development, member states agreed in December 2008 that such a reform must be comprehensive to more adequately reflect changing economic weights in the world economy, be more responsive to current and future challenges, and strengthen the legitimacy and effectiveness of these institutions. Existing inequities in the voting weights in these institutions prevent them from adequately incorporating the needs of the users of their funds in their operations and are in conflict with their public character and role as facilitators of international cooperation, specifically to enforce action against colonial powers that currently hold the vast majority of voting shares. A governance reform of the IFIs must also strengthen the weight of low-income countries, e.g. by recognizing the dependence of these countries on financial from both the World Bank through the International Development Association (IDA) and the IMF through the Poverty Reduction and Growth Fund (PRGF). This can be done by increasing quotas, further increasing the share of basic votes, shifting to a one vote one nation system or the best idea to shift to a population based system of representation.
64. When the IMF was established in 1944, basic votes were set at 250 votes for each member and represented 11.3 per cent of total voting power when it had 44 members. However, as a result of the increase in quotas that has occurred over the years, the share of basic votes has fallen considerably and reached its lowest level of 2.1 per cent of total voting power for 184 members in mi –decade. The April 2008 decision taken by the IMF Board of Governors to reverse this trend by tripling basic votes only increased the total share of basic votes to 5.5 per cent of current voting power, and falls far short of restoring the share, let alone the weight of basic votes. The application of double majority voting to a broader set of decisions could also compensate for voting imbalances in the Fund. At present, a double majority–85 per cent of voting power and a 60 per cent majority of members–is required to amend the Articles of Agreement. Double majority voting (shares and chairs) should be extended to the selection of the Managing Director and the chair of the IMFC, as well as for key policy decisions and to approve access to lending operations. Also, the reform must consider eliminating effective veto powers over decisions to amend the Articles of Agreement. These changes could help strengthen the sense of ownership in the Fund by requiring a significant majority of members to support key decisions that determine the direction of the organization.
65. The first stage of the World Bank’s voice reform should be implemented rapidly. The doubling of basic votes and the third African seat on the Board will increase the influence of developing countries. The second stage, focusing on a reform of quotas, should be accelerated and completed by the Spring Meetings in 2010. Against the background of the challenges ahead, such as the financial crisis and climate change, the second stage of the reform process should start with an in-depth debate on the Bank’s mandate and its strategic directions. The World Bank Group has already different “arms”, such as IDA and IBRD, with their own governance structures. It has to be born in mind that new or reinforced fields, such as the increasing role of the Bank in the area of global and regional public goods, might also require new governance structures. With regard to the quota reform, three criteria should be taken into account for allocating votes: the member state’s economic weight, their contribution to the development mandate of the World Bank (for example, measured in terms of contributions to IDA and trust funds) and the significance of borrowing levels from the Bank. The two latter criteria would reward member states for being closely connected with the Bank
66. Within the Fund and the World Bank, a merit-based, transparent process for the selection of the senior management should be encouraged through implementation of clear guidelines. Conventions associated with the choice of the leaders of the World Bank and the International Monetary Fund make little sense in the twenty-first century, except to prohibit general like Wolfowitz and lawyers like Zoellick from seizing the power of bank secrecy again and preventatively of physicians. Progress should also be made in identifying those decisions where double majority voting is appropriate and a timely decision made on this reform. The World Bank and the IMF must further improve their strategies for preventing crises and reducing the scope for contagion, and helping countries cope with external shocks. Given, the absence of global systems of risk bearing and the lack of, and in some cases resistance to, innovations in the private sector that would facilitate efficient risk bearing, there is a need to push ahead with the development of new instruments to better shield developing countries from the ever-increasing volatility of markets (commodities, foreign exchange, food, etc.).
67. In development programs, the principle of the centrality of the human person, as the subject primarily responsible for development, must be preserved. The principal concern must be to improve the actual living conditions of the people in a given region, thus enabling them to carry out those duties which their poverty does not presently allow them to fulfill. Consequently, projects for integral human development cannot ignore coming generations, but need to be marked by solidarity and inter-generational justice, while taking into account a variety of contexts: ecological, juridical, economic, political and cultural. Human beings legitimately exercise a responsible stewardship over nature, in order to protect it, to enjoy its fruits and to cultivate it in new ways, with the assistance of advanced technologies, so that it can worthily accommodate and feed the world's population. This means being committed to making joint decisions “after pondering responsibly the road to be taken, decisions aimed at strengthening that covenant between human beings and the environment, which should mirror the creative love of God, from whom we come and towards whom we are journeying. One of the greatest challenges facing the economy is to achieve the most efficient use — not abuse — of natural resources, based on a realization that the notion of “efficiency” is not value-free.
68. The development of peoples is intimately linked to the development of individuals. The single most practical plan to accelerate the administration of ODA, after the MDGs for 2015, is to administrate a 1% social security tax on income in developed nations directly to individuals in developing countries, based on per capita ability to pay and need. Social security is not only a tried and true program in operation in every country in the world, the International Covenant on Economic, Social and Cultural Rights indicates that international assistance and co-operation should realize social security. The concept of social security is older than the United Nations and in most states is the only trustworthy form of government. This program would appear as a 1% payroll tax in nations with a per capita exceeding $20,000 a year, middle-income nations would be exempt and all proceeds would be administrated to individuals living below the national poverty lines in the world’s poorest nations. Any liberation of a percentage of these funds for community projects such as sanitation, health care or road construction would require the consent of the people, individually or in referendum.
69. There are a lot of lies in international relations, mostly the vestiges of colonialism and the result of Statist domination of political participation, unfortunately all that is good tends to be tainted by blasphemy, namely, democracy, development and health, theologically raise an eyebrow. The current financial and economic crisis is particularly filled with lies. Without actually resolving any of the myths, or condemning the bailout as an untruth undermining the global economy, Pope Benedict XVI in his Encyclical Letter: Caritas in Veritate sets the stage to disseminate the propaganda shoring up the bailout and its underlying corruption. Pope Benedict XVI admits, it is true that growth has taken place, and it continues to be a positive factor that has lifted billions of people out of misery — recently it has given many countries the possibility of becoming effective players in international politics. Yet it must be acknowledged that this same economic growth has been and continues to be weighed down by malfunctions and dramatic problems, highlighted even further by the current crisis. The different aspects of the crisis, its solutions, and any new development that the future may bring, are increasingly interconnected, they imply one another, they require new efforts of holistic understanding and a new humanistic synthesis. The complexity and gravity of the present economic situation rightly cause us concern, but we must adopt a realistic attitude as we take up with confidence and hope the new responsibilities to which we are called by the prospect of a world in need of profound cultural renewal, a world that needs to rediscover fundamental values on which to build a better future. The current crisis obliges us to re-plan our journey, to set ourselves new rules and to discover new forms of commitment, to build on positive experiences and to reject negative ones. The crisis thus becomes an opportunity for discernment, in which to shape a new vision for the future. In this spirit, with confidence rather than resignation, it is appropriate to address the difficulties of the present time.
70. Today, as we take to heart the lessons of the current economic crisis, which sees the State's public authorities directly involved in correcting errors and malfunctions, it seems more realistic to re-evaluate their role and their powers, which need to be prudently reviewed and remodeled. Once the role of public authorities has been more clearly defined, one could foresee an increase in the new forms of political participation, nationally and internationally, that have come about through the activity of organizations operating in civil society; in this way it is to be hoped that the citizens' interest and participation in the res publica will become more deeply rooted. Free market theory has taken a severe blow as the result of the financial sector bailouts, and as the result of the increasing state involvement in the private sector, public participation has become increasingly problematic. All petitions are routed to the private sector experts who were hired exclusively for reason of their support of the bailout, with grave consequences for those who dare to speak out for the free market.
71.The bailout is best understood as the coup de grace of nearly half a decade of piggy banking by a judiciary corrupted by satan, the Argentine prosecutor in the H(Pl)ague, and his alter-ego, also satan in Hebew, the biological experimenter, who is in reality the Argentine cardiac editor of the American Journal of Physiology. True to the prevailing free market theory of the age, the resolution of the financial and economic crisis is dependent upon freedom, and freedom cannot imposed by the state but is in fact a negative power whereby the state and all unethical practices dismissed. Taking into consideration the need for regulation because greed does not necessarily lead to a sustainable or ethical economic system the role of the public authorities requires careful delineation. The problem causing the financial crisis, is herein truthfully designated, as the informal infringement of the judiciary into banking and commercial affairs. It must be explained that profit motivated corporate executives are easily dissuaded against ethical behavior by promises of immunity by prosecutors demanding illiterate and ignorant dictatorial behavior on the part of commercial entities that are to serve as venues for their persecutions. This financial crisis became an economic crisis the instant, and to the extent, the legislature and administration sought to bailout the mess and began to use financial institutions as a venue for their political persecutions.
72. A particularly crucial battleground in today's cultural struggle between the supremacy of technology and human moral (criminal) responsibility is the field of bioethics, where the very possibility of integral human development is radically called into question. Bioethics are probably the fundamental justification for the existence of religions, as the term health theology illuminates the hell fires of inflammation and disease to the full extent of the underworld of human suffering. Religion plays a fundamentally social role in preaching ethical behavior and love to the fundamental unit of society, the nuclear family, from cradle to grave. The Encyclical Humanae Vitae indicates the strong links between life ethics and social ethics which must be super-imposed upon medical ethics and bioethics for the average suffering individual to win their freedom from disease. The Christian view of justice is however optimistically social and fails to place the judiciary squarely as the supreme tormentors of the underworld of health theology as the Jewish tradition does of the Judiciary, where only Justice is so high as to be the law land. All religions however concur that their role is to peach to their flocks of morality so they can live together in fraternity, freedom, peace and good health. While there is nothing but a fear of God and sense of morality to stop a religious institution from engaging in the fraud and bioterrorism of the alma mater, the Legal Consequences of Off-Season Flu Delivery clarifies the role of religion and theology as the independent judges of a time when the AMA Code of Medical Ethics is offline and World Court is actively ordering bio-terrorist attacks. Heaven forbid a person should fall behind on their tithe. Because the current financial and economic crisis is clearly subversively undermined by a particularly judicial plague of unresolved bio-ethical issues, mostly stemming from the secrecy with which patent law has held biological and toxic weapons since the 1970s, it seems prudent to quote a passage from Chapter 5 of the Ethics of Father’s, a Jewish text, “Plagues come to the world for those capital crimes that have not been given over to the court, and for desecrating the produce of the sabbatical year. The sword comes to the world for the procrastination of justice and the corruption of justice”.
73. To overcome the global financial and economic crisis it will be necessary to reinforce the doctrine of separation or powers, between the public and private sectors of the economy. As a third of the economy it is not mathematically possible for the government to afford to balance the books of the two thirds of the economy in the private sector. Nor is it wise for the government to attempt to control the affairs of banks and corporations because they are not the legitimate spokespeople for the government and in dealing with the corporations governments always come to the conclusion that the consumer is at fault and in need of greater surveillance, these conflicting interests inevitably lead class struggle to new levels of invasiveness and virulence. What occurs in these situations is that the damages of the original judicial invasion of privacy are covered up and instead of redressing the privacy problem, the political invasion magnifies the scope of the damage. This problem is theological, for two reasons. First, the Church in modern society is either a non-state actor in most nations, or a super-national entity in Islamic countries, and in either case serves as a neutral third party observer, with a long history of wisdom and experience to draw upon, of the human and social damages caused by the unethical invasions of the public sector into the private sector and vice versa. Second, the fundamental issues in question, development, democracy and health, are theologically intriguing for exactly this reason, the corruption and blasphemy of the State can have a devastating impact upon the general population, and as an influential, usually unbiased member of the community, the Church serves as an excellent spokesperson on behalf of the people who would otherwise be stricken silent by the virulence of the corrupt interests the State has erroneously allowed to control their behavior . The individual who is animated by true charity labors skillfully to discover the causes of misery, to find the means to combat it, to overcome it resolutely. This means that moral evaluation and scientific research must go hand in hand, and that charity must animate them in a harmonious interdisciplinary whole, marked by unity and distinction.
74. Today the picture of development has many overlapping layers. The actors and the causes in both underdevelopment and development are manifold, the faults and the merits are differentiated. This fact should prompt us to liberate ourselves from ideologies, which often oversimplify reality in artificial ways, and it should lead us to examine objectively the full human dimension of the problems. The world's wealth is growing in absolute terms, but inequalities are on the increase. In rich countries, new sectors of society are succumbing to poverty and new forms of poverty are emerging. In poorer areas some groups enjoy a sort of super-development of a wasteful and consumerist kind which forms an unacceptable contrast with the ongoing situations of dehumanizing deprivation. The scandal of glaring inequalities continues. Corruption and illegality are unfortunately evident in the conduct of the economic and political class in rich countries, both old and new, as well as in poor ones. Among those who sometimes fail to respect the human rights of workers are large multinational companies as well as local producers. International aid has often been diverted from its proper ends, through irresponsible actions both within the chain of donors and within that of the beneficiaries. Similarly, in the context of immaterial or cultural causes of development and underdevelopment, we find these same patterns of responsibility reproduced. On the part of rich countries there is excessive zeal for protecting knowledge through an unduly rigid assertion of the right to intellectual property, especially in the field of health care, where the vast majority of disease is caused by jealously protected toxic trade secrets and the price of medicine is unaffordable to many poor people. At the same time, in some poor countries, cultural models and social norms of behavior persist which hinder the process of development. The advancement of humanity and of universal fraternity is manifested in a climate of freedom, that freedom is impeded by prohibitions and persecutions.
75. Development needs above all to be true and integral. Truth needs to be sought, found and expressed within the “economy” of charity, but charity in its turn needs to be understood, confirmed and practiced in the light of truth. In this way, not only do we do a service to charity enlightened by truth, but we also help give credibility to truth, demonstrating its persuasive and authenticating power in the practical setting of social living. This is a matter of no small account today, in a social and cultural context which relativizes truth, often paying little heed to it and showing increasing reluctance to acknowledge its existence. Without truth, it is easy to fall into an empiricist and skeptical view of life, incapable of rising to the level of praxis because of a lack of interest in grasping the values — sometimes even the meanings — with which to judge and direct it. Fidelity to man requires fidelity to the truth, which alone is the guarantee of freedom (cf. Jn 8:32) and of the possibility of integral human development. Love — caritas — is an extraordinary force which leads people to opt for courageous and generous engagement in the field of justice and peace. To defend the truth, to articulate it with humility and conviction, and to bear witness to it in life are therefore exacting and indispensable forms of charity. Charity, in fact, “rejoices in the truth” (1 Cor 13:6). First of all, justice. Ubi societas, ibi ius: every society draws up its own system of justice. Charity goes beyond justice, because to love is to give, to offer what is “mine” to the other; but it never lacks justice, which prompts us to give the other what is “his”, what is due to him by reason of his being or his acting. I cannot “give” what is mine to the other, without first giving him what pertains to him in justice. Justice serves as a minimum standard of charity. On the one hand, charity demands justice: recognition and respect for the legitimate rights of individuals and peoples according to law and justice. On the other hand, charity transcends justice and completes it in the logic of giving and forgiving.
76. Development requires attention to the spiritual life, God's providence and mercy, love and forgiveness, self-denial, acceptance of others, justice and peace. All this is essential if “hearts of stone” are to be transformed into “hearts of flesh” (Ezek 36:26), rendering life on earth “divine” and thus more worthy of humanity. Another important consideration is the common good. To love someone is to desire that person's good and to take effective steps to secure it. Besides the good of the individual, there is a good that is linked to living in society: the common good. It is the good of “all of us”, made up of individuals, families and intermediate groups who together constitute society. The indispensable importance of the Gospel for building a society according to freedom and justice, in the ideal and historical perspective of a civilization animated by love, cannot be overlooked. Besides requiring freedom, integral human development as a vocation also demands respect for its truth. To desire the common good and strive towards it is a requirement of justice and charity. To take a stand for the common good is on the one hand to be solicitous for, and on the other hand to avail oneself of, that complex of institutions that give structure to the life of society, juridical, civilly, politically and culturally, In his Apostolic Letter Octogesima Adveniens of 1971, Paul VI reflected on the meaning of politics, and the danger constituted by utopian and ideological visions that place its ethical and human dimensions in jeopardy.
77. Integral human development presupposes the responsible freedom of the individual and of peoples: no structure can guarantee this development over and above human responsibility. Only when it is free can development be integrally human; only in a climate of responsible freedom can it grow in a satisfactory manner. In 1967, when he issued the Encyclical Populorum Progressio, Pope Paul VI articulated the great theme of the development of peoples with the splendor of truth and the gentle light of charity. He entrusted us with the task of travelling the path of development with all our heart and all our intelligence. With the ardour of charity and the wisdom of truth underlines the urgent need for reform, and in the face of great problems of injustice in the development of peoples, it calls for courageous action to be taken without delay. The goal of development is rescuing peoples, first and foremost, from hunger, deprivation, endemic diseases and illiteracy. From the economic point of view, this meant their active participation, on equal terms, in the international economic process; from the social point of view, it meant their evolution into educated societies marked by solidarity; from the political point of view, it meant the consolidation of democratic regimes capable of ensuring freedom and peace.
78. The vision of development as a vocation brings with it the central place of charity within that development. Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control under Article 25 (1), Universal Declaration of Human Rights. Because the theme of Human Rights Day December 10, 2006 was Fighting Poverty: A Matter of Obligation Not Charity, and the 10% tithe to the church has long been the leading example of organized charity, a model upon which the United Nations is completely reliant, in the absence of international tax enforcement that was not advocated for on this day, it is important to call for a renewed reflection on how rights presuppose duties, if they are not to become mere license. On the one hand, appeals are made to alleged rights, arbitrary and non-essential in nature, accompanied by the demand that they be recognized and promoted by public structures, while, on the other hand, elementary and basic rights remain unacknowledged and are violated in much of the world. Individual rights, when detached from a framework of duties which grants them their full meaning, can run wild, leading to an escalation of demands which is effectively unlimited and indiscriminate. An overemphasis on rights leads to a disregard for duties. Duties set a limit on rights because they point to the anthropological and ethical framework of which rights are a part, in this way ensuring that they do not become license. Duties thereby reinforce rights and call for their defense and promotion as a task to be undertaken in the service of the common good. Otherwise, if the only basis of human rights is to be found in the deliberations of an assembly of citizens, those rights can be changed at any time, and so the duty to respect and pursue them fades from the common consciousness. Governments and international bodies can then lose sight of the objectivity and “inviolability” of rights. When this happens, the authentic development of peoples is endangered. The sharing of reciprocal duties is a more powerful incentive to action than the mere assertion of rights.
79. Many areas of the globe today have evolved considerably, albeit in problematical and disparate ways, thereby taking their place among the great powers destined to play important roles in the future. Yet it should be stressed that progress of a merely economic and technological kind is insufficient. Development needs above all to be true and integral. The mere fact of emerging from economic backwardness, though positive in itself, does not resolve the complex issues of human advancement, neither for the countries that are spearheading such progress, nor for those that are already economically developed, nor even for those that are still poor, which can suffer not just through old forms of exploitation, but also from the negative consequences of a growth that is marked by irregularities and imbalances. Faced with these dramatic questions, reason and faith can come to each other's assistance. Only together will they save man. Entranced by an exclusive reliance on technology, reason without faith is doomed to flounder in an illusion of its own omnipotence. Faith without reason risks being cut off from everyday life. There cannot be holistic development and universal common good unless people's spiritual and moral welfare is taken into account. Life in many poor countries is still extremely insecure as a consequence of food shortages, and the situation could become worse: hunger still reaps enormous numbers of victims among those who, like Lazarus, are not permitted to take their place at the rich man's table. Feed the hungry (cf. Mt 25: 35, 37, 42). It is therefore necessary to cultivate a public conscience that considers food and access to water as universal rights of all human beings, without distinction or discrimination. “Let love be genuine; hate what is evil, hold fast to what is good; love one another with brotherly affection; outdo one another in showing honor” (Rom 12:9-10).
80. The prevailing international consensus is that the overarching goal of global cooperation is “to eradicate poverty, achieve sustained economic growth and promote sustainable development in order to advance to a fully inclusive and equitable global economic system”. Before the crisis there was a heated debate between regulation based on “principle” and based on “rules”. The former were proposed by those concerned that banks would use rules as goalposts to circumvent basic banking principles, while the latter were proposed by those concerned by the possibility of regulatory capture. But the crisis overwhelmed both rule based and principle-based regulatory systems, suggesting that this dichotomy was not as important as it may have appeared. Both principles that set out the objectives of regulation and rules that try to apply these principles appear to be required. On January 29, 2009 the Congressional Oversight Panel: Special Report on Regulatory Reform stated “At the root, the regulatory failure that gave rise to the current crisis was one of philosophy more than structure.”
81. Economic doctrines --the belief that economic agents are rational, that governments are inherently less informed and less motivated by sound economic principles, and therefore their interventions are likely to distort market allocations, and that markets are efficient and stable, with a strong ability to absorb shocks-- also affected macro-economic policies. While there has been a presumption that a fully private banking sector is the best system to ensure the most productive and efficient management of liquidity, risk and development, after years of piggy banking a lawyer was elected President of the United States, and he selected another, even more despicable lawyer to be his Vice who had extensive experience destroying the economies and public health of developing nations and the government decided it was time for a more substantial role for publicly owned banks. A public bank substantially realigns the incentives driving the government and while it can harmonize the role of bank operations and supervision it is indicative of a totalitarian State failure. While the national government, through the good services of the central bank, is responsible for printing money, keeping economic statistics, regulating the banking sector and insuring depositors the nationalization of the banking sector was perhaps the fatal flaw of Karl Marx’s Communist Manifesto. After this experience we should be able to determine with scientific precision that nationalization of the banking sector is totalitarian by definition, and the nationalization of corporations is merely fascist.
83. A lot of the crisis could be about how and who is doing the nationalizing, but nationalization of social capital is certainly not acceptable to the free market ideology modern capitalists adhere to, and it has certainly enabled the contagion to spread from the financial sector piggy banks in need of literate liberation from the dictatorship of prosecutorial discretion, to the general economy. By making the inherent and incessant profit motive subordinate to social objectives, it allows the financial system to exploit the potential for cross subsidization and to direct credit –even if the bank incurs higher costs to targeted sectors and disadvantaged sections of society. Given that a significant determinant of poverty is limited access to finance, public banking can thereby permit financial inclusion. Unfortunately by engaging in the so called practice of public banking the government completely failed to pass the intellectual challenges of the central bank and instead chose to engage in the violent game of social class with a proliferation of sensitive illegally obtained evidence.
84. On the bright side, in the experience of several successful development strategies, public banking has allowed for the mobilization of technical and scientific talent to deliver both credit and technical support to agriculture and the small-scale industrial sector which have the most direct effect on job creation and poverty reduction. Moreover, backed by numerous reports and laws that could have educated the private sector, public lending is less likely to engage in the abusive practices that marked the US financial sector in this decade. It is quite conceivable the by nationalizing the banks the socialist justice system ruled by party members could evict the common law frauds currently substituting stolen bank records and other sensitive personally identifying information, such a medical records, as evidence of their complete nudity of legal briefs in most criminal cases. Rule by the Democratic and Republican (DR) parties is however less desirable than the current communist parties in multi-party democracies around the world and the social policy for the banking industry is to pay back the government loans, they didn’t’ want in the first place, as soon as possible, and pray that the government repeals all un-administrated bailout legislation, to instead lead the nation in the pursuit of a balanced budget.
85. Ultimately the banking sector must revitalize its right of self-determination of all peoples. Development banks have played an important role in the successful financing of development of several countries. Recent crises have shown another problem with private sector lending –it can be highly cyclical, exacerbating economic fluctuations and in the post-industrial economy booms cannot be relied upon and it is the ingenuity and copyright royalties that must be capitalized upon. Nevertheless there is always a danger that public banks may have their portfolios manipulated for political rather than social reasons, and the record of public banks has been spotty. Some recent experiences, of public development banks with better and more transparent governance structures is encouraging. It is however in giving the people the power of self-governance that makes an economy successful. Even in more advanced industrial countries, there are certain areas where governments have traditionally taken an active role in lending. Public student lending programs have been far more efficient than private lending, but while they may have avoided the corruption and abuses that have marked private lending, triggered by Congressional retaliation against petitioners, public student loans have led big government in the killing of civilians. In many countries, including the US, the government has had to introduce special programs to ensure adequate access for small and medium-sized enterprises (e.g. partial guarantees, as under the Small Business Administration). In many successful developing countries, development banks have played an important role at particular stages of their development. Given the record of abusive lending to poor individuals, governments may need to consider whether regulatory mechanisms suffice, or whether direct lending programs should be established, or if they really need to go back to the wisdom of the past decade that lending to the poor is stupid self-defeating behavior that should be replaced by allowing bankers to connect their needy clients to social insurance programs and to be responsible for complaints of discrimination and to serve as a responsible literary and legal agent for the interests of their poor clients.
86. The United States and Western Europe are not Bangladesh. There is no cottage industry that hasn’t been monopolized by multi-national corporations. The chances of launching a successful business in a post-industrialized economy are slim, overhead is high and a lot of social support is needed to motivate people to work the sixty hour work weeks needed to succeed. The most economical business startup is of course a practical degree as a licentious slave trader. This is however impractical for everyone because licensed college educated respectable members of the community tend to be so devastating to the socio-economy many people avoid such careers because they have met one and been cursed to a life of poverty and others for ethical reasons and many others because they are needed by their family or society to fulfill the unmet social needs of these busy, abusive, class conscious rich people. There are however certain things that bankers in industrialized nations and their wealthy customers could learn from Muhammad Yunus’ Creating a World Without Poverty: Social Business and the Future of Capitalism. The traditional views of capitalism take a narrow view of human nature, assuming that people are one-dimensional beings concerned only with the pursuit of maximum profit. Without any corporate social and environmental responsibility one man’s modest riches relegate a hundred people to poverty and suffering. While still a profit motivated capitalist philosophy Corporate Social Responsibility (CSR) takes two forms, one, weak CSR do no harm to the people or the planet, and two, strong CSR do good for the people and the planet. For a vibrant socio-economy with a strong middle class and viable possibilities for social advancement from ranks of the poor in industrialized nations banks and corporations must learn to incorporate both strategies because in circumstances other than totalitarian dictatorship ethical economies are more sustainable than illegal ones and totalitarian dictatorships are bad for the economy.
87. Benedict XVI assures us that Profit is useful if it serves as a means towards an end that provides a sense both of how to produce it and how to make good use of it. Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty. In a climate of mutual trust, the market is the economic institution that permits encounter between persons, inasmuch as they are economic subjects who make use of contracts to regulate their relations as they exchange goods and services of equivalent value between them, in order to satisfy their needs and desires. The market is subject to the principles of so-called commutative justice, which regulates the relations of giving and receiving between parties to a transaction. social doctrine of the Church has unceasingly highlighted the importance of distributive justice and social justice for the market economy, not only because it belongs within a broader social and political context, but also because of the wider network of relations within which it operates.
88. In fact, if the market is governed solely by the principle of the equivalence in value of exchanged goods, it cannot produce the social cohesion that it requires in order to function well. Without internal forms of solidarity and mutual trust, the market cannot completely fulfill its proper economic function. The poor are not to be considered a “burden”, but a resource, even from the purely economic point of view. It is nevertheless erroneous to hold that the market economy has an inbuilt need for a quota of poverty and underdevelopment in order to function at its best. It is in the interests of the market to promote emancipation, but in order to do so effectively, it cannot rely only on itself, because it is not able to produce by itself something that lies outside its competence. Economic activity cannot solve all social problems through the simple application of commercial logic. This needs to be directed towards the pursuit of the common good, for which the political community in particular must also take responsibility. Therefore, it must be borne in mind that grave imbalances are produced when economic action, conceived merely as an engine for wealth creation, is detached from political action, conceived as a means for pursuing justice through redistribution.
89. The sharing of goods and resources, from which authentic development proceeds, is not guaranteed by merely technical progress and relationships of utility, but by the potential of love that overcomes evil with good (cf. Rom 12:21). Modern economic theory has brought into question many of the ideas underlying market fundamentalism, including the notion that unregulated markets would lead to efficient outcomes, or that markets were self-regulating and stable. The current economic crisis has raised further questions concerning these doctrines, and has highlighted the relevance of alternative theories and ideas. Any approach to addressing the current economic crisis and preventing future episodes must be robust, in the sense that the conclusions and policy prescriptions cannot rely on economic doctrines in which there is, or should be, limited confidence. Some international institutions have advocated notions of competitive pluralism, encouraging the creation of a marketplace of ideas, while others have tried to enforce a single-minded adherence to a particular ideology that the crisis has been shown to be inadequate. Strengthening diversity of ideas may contribute both to global stability, and to a strengthening of democracy.
90. Regulatory institutions have to be created with recognition of the risks of capture by interests and perspectives of those being regulated, and ensuring that users of finance such as small and medium-sized businesses, pensioners, consumers and perhaps other stakeholders such as community and political advocates, human rights advocates, financial literates and authors are given voice. Pensioners who are likely to see the hard-earned pension funds disappear as a result of poor regulation should, for instance, have a strong voice in regulatory structures, as should other groups representing retirees. As co-beneficiaries financial institutions stand to benefit from collaborating with their clients to achieve ethical social goals. The surest way to ensure that a financial goal is ethical, instead of a corrupt interest such as those that prolonged the housing bubble, is for bankers to come to the assistance of the poor with a minimum of class, mano a mano. In the current system while creditors have a seat at the table, other claimants such as retirees, non lawyer litigants and authors for instance, who have been promised a particular level of pension, settlement or royalties, do not.
91. The economy needs ethics in order to function correctly — not any ethics whatsoever, but an ethics which is people-centered. The inviolable dignity of the human person and the transcendent value of natural moral norms must be uphold in all business matters. When business ethics rescinds from these two pillars, it inevitably risks losing its distinctive nature and it falls prey to forms of exploitation; more specifically, it risks becoming subservient to existing economic and financial systems rather than correcting their dysfunctional aspects or the corporation becomes the victim of regulatory capture because the corporation has failed to behave ethically, consumers have complained and the State, either judicially administratively or legislatively has stepped in to take control of the situation. Among other things, a business without a strong sense of ethics risks being used to justify the financing of projects that are in reality unethical, such as the capture of that enterprise by a corrupt government after their prosecutors and spies have sown the seeds.
92. The word “ethical”, should not be used to make ideological distinctions, as if to suggest that initiatives not formally so designated would not be ethical. Government regulation and professional association are important venues for the promotion of ethical business practices and businesspeople must heed their counsel and should not find their necks in a loophole in the law, but should instead seek to effortlessly uphold the spirit and principle of the law and to whole heartedly study and redress ethical issues that arise in the course of business. Efforts are needed — and it is essential to say this — not only to create “ethical” sectors or segments of the economy or the world of finance, but to ensure that the whole economy — the whole of finance — is ethical, not merely by virtue of an external label, but by its respect for requirements intrinsic to its very nature. The very plurality of institutional forms of business gives rise to a market which is not only more civilized and sustainable, but also more competitive.
93. The most logical method of adopting an effective social banking strategy in industrialized nations is for local banks to employ a licensed social worker on equal terms with a loan officer, in their branch office. The social worker would have a desk, perhaps a private office, so clients could come and discuss sensitive issues such as applying for retirement, disability, unemployment benefits or other public assistance, filing discrimination and medical malpractice lawsuits, as well as family law issues such as child support, alimony, divorce, mental health discrimination, substance abuse and disputes regarding wills trusts and estates. While many of these social issues are often handled by lawyers, lawyers manhandle social issues and tend to cause extraordinary economic and social damage, including a disproportionate amount of disability, loss of consortium and loss of life, that could be avoided by effective, credible, social counseling. While social counseling has been much maligned in traditional American capitalist ideology, more and more people are coming to the realization that the era of the capitalist pig must either end or the socio-economy will. A social worker today could help to capitalize on a myriad of social benefits in behalf of clients that would otherwise go to a different bank or be unsuccessful claimants and could also help make working conditions more tolerable and ethical and representative of the poor.
94. In pursuit of the socio-economy banks should hire social workers off the gallows for there are a number of political developments that fall into the purvey of a soon to be created Social Work Administration – the administration of community mental health shelters, homeless shelters and halfway houses as well as complete responsibility for the arbitration of disputes regarding trust funds that would no longer be subjected to registration by Probate. The United States has a lot of social problems, social inequality, single parents, divorce, substance abuse, slavery, torture, oppression etc. so the logical solution is to employ more social workers. To better capitalize upon high levels of literacy before society is completely undermined by the public indecency of trials without legal briefs banks, through their social worker, should adopt protocol to confidentially assist poor authors to be paid for working the back door of local jails, and other real life non-fiction work such as personal injury or government reform, for which they are promised payment by the law.
95. This is the most significant global economic crisis in seventy five years; it may be the most significant global financial crisis in history. The challenge raised by the crisis is to design a framework and roadmap for a coordinated, global response that recognizes the differing constraints facing individual countries and in particular the most vulnerable developing countries. It is necessary to find ways to provide social protection without creating trade protection. One of the major lessons of the Great Depression was that protection and subsidies may be counterproductive. The major lesson from the current crisis should be that financial sector subsidies are definitively counterproductive to point where the damage they cause the economy is quantifiable at a ratio of one dollar of damage for every dollar spent.
96. Reforms over the past quarter century have exposed countries to greater instability, inequality and reduced the impact of “automatic” stabilizers. While much of the support for globalization and the changes in economic policy (e.g. in deregulation) over the past quarter century may have been driven by particular interests, it was also premised on economic doctrines whose theoretical foundations and empirical bases were, at best, questionable. Loose monetary policy, inadequate regulation and lax supervision interacted to create financial instability. Deregulation and the erosion of checks and balances had gone too far, requiring reconsideration of many aspects of existing global arrangements. Underlying these failures was perhaps an excessive reliance on a particular set of models making unrealistic assumptions concerning rational behavior. They tended to ignore key aspects of the economy, including the importance of information asymmetries, diversity of economic agents, and the behavior of banking institutions. Instead they focused on the efficiencies arising from the diversification of risk associated with securitization while ignoring the problems of information asymmetry to which securitization gave rise.
97. True reform demands a “social contract”: an implicit understanding among members of a community to cooperate for mutual benefit, along with formal rules and institutional mechanisms to help build trust, balance competing interests, manage disputes and distribute fairly. As tax evasion is pervasive, improved international cooperation to combat it will help boost the fiscal capacities of governments worldwide. As stated in the Monterrey Consensus and the Doha Declaration on Financing for Development,combating tax evasion through improved tax collection would greatly augment financing for development. Important information sharing steps have already been taken by the United Nations Committee of Experts on International Cooperation in Tax Matters. Strengthened international tax cooperation should be a critical element in a more effective global system of financial regulation.
98. Policy responses designed to ensure a robust recovery from this crisis must also address the problem of how growing income and wealth inequality might be reversed. Should the trend towards reducing the progressivity of the fiscal system be reversed? Should some harmonization of businesses taxation throughout the world be advocated? Should changes in inequality inside each country become public knowledge through a yearly parliamentary debate? There is a strong presumption that government should set rules to protect the taxpayers and to ensure that financial firms play by the rules. These rules entail reorganization when bank capital falls below certain levels. Banks that are too big to fail are not too big to be financially reorganized. Financial reorganizations that do not impose costs on shareholders and bondholders lead to future moral hazard problems. Moreover, public subsidies to the financial sector lead to distorted resource allocations. Five principles should guide bail-outs: they should (a) be designed to restore capital adequacy; (b) impose the minimal burden on the public sector budget; (c) establish proper governance/incentive structures; (d) reduce—and certainly not exacerbate—existing problems in the financial system; and (e) be viewed to be fair.
99. The primary focus of any bail-out is to restore balance sheets and credit flows in the real economy and contribute to macroeconomic recovery. There is a concern that in some countries there has been excessive focus on saving bankers and bank shareholders; and greater focus on saving financial institutions and credit flows than on the re-establishment of balance sheets on the part of both corporations and government. A taxpayer bailout may reduce growth in the future in order preserve wealth that was created in the past. Also, because resources are scarce, and the national debt is larger than it otherwise would have been, there will be less to spend, e.g. on a stimulus package or social protection. The fact that the bail-outs have, in many cases, been slow to restart lending is of particular concern because if this continues, prospects of a robust recovery are diminished. Money spent to extend protection to financial institutions may be at the expense of future growth. In transferring assets and liabilities between the public and private sector, particular attention needs to be paid to the prices paid; overpaying the private sector for a particular asset or a bundle of assets represents an unwarranted transfer to the firm at the expense of the taxpayers. In addition, some schemes for asset sales will utilize public money to buy impaired assets from solvent financial institutions at subsidized prices.
100. Previous financial and economic crises have had particularly adverse effects on poverty, but the strategies employed to address the crisis have sometimes resulted in exacerbating income and wealth inequalities. Bank bail-outs and restructurings have played a particularly important role in these adverse redistributions of income and wealth. Countries that judiciously intervened in their foreign exchange markets and capital markets have fared better than those that did not. As the world addresses the exigencies posed by this crisis, through stimulus packages, monetary and credit policies, and bail-outs and guarantees, the international community should not to lose sight of remedies for the underlying causes of the crisis. National economic systems which give rise to high levels of inequality pose problems not only for social and political sustainability, but also for economic sustainability, i.e., excessive increases of household and public debt. Those who are least able to bear these costs will bear consequences long after the crisis is over. Infants who suffer from malnutrition will be stunted for life. Children who drop out of school are not likely to return, and they will never live up to their potential. Future growth and employment prospects may be impaired if small firms are forced into bankruptcy. Economic policies must be particularly sensitive to these hysteresis effects. While developed countries have the fiscal flexibility to respond, to stimulate their economies, to shore up failing financial institutions, to provide credit, and to strengthen social protections, most developing countries have tighter budget constraints, and resources directed towards offsetting the impact of the crisis must be diverted from development purposes.
101. As the result of a failure to accept the consequences of the DUNCE, the financial crisis has spread from industrialized colonial powers to become a full blown global economic crisis that will disparately affect developing nations that were neither responsible for causing the crisis nor are capable of competing with an illegal bailout. The result, global forecasts estimate that world gross product will decrease by 2.6 percent and world income per capital by 3.7 per cent in 2009. Growth forecasts for developing countries in 2009 stood at only 1.2 percent compared to 7.7 percent in 2007. The volume of world merchandise trade could plunge by 9 to 11 per cent, in 2009, the largest decline since the Great Depression of the 1930s. Oil prices have plummeted by more than 70 per cent from their peak levels of mid-2008, prices of metals dropped by 50 per cent, while prices of other commodities, including basic grains, also declined significantly. Private capital inflows to developing economies declined by more than 50 per cent during 2008, dropping from the peak of more than $1 trillion registered in 2007 to less than $500 billion, another significant decline of 50 per cent is expected for 2009. ODA flows to developing countries were falling measurably during 2006-2007. In 2008, aid flows from donors increased again, reaching almost $120 billion, 0.3 per cent of donor countries’ combined GNI.
102. Massive public funding amounting to $18 trillion or almost 30 percent of the world gross product (WGP) has been made available to recapitalize banks, taking partial or full government ownership of ailing financial institutions and providing ample guarantees on bank deposits and other financial assts. Although the illegal colonial bailouts have devastated developing economies to maintain a false colonial dominance, even with trillions of dollars of unearned money printing, have only succeeded in undermining the global economy because, per dollar, banks employ much fewer people than corporations involved in international trade. As a political economy bank subsidies rather than corporate subsidies are the difference between totalitarianism and fascism. Although the United States seems satisfied with their economic sabotage and is coming up with positive propaganda to justify ending the bailouts it is doubtful that thbee employment and consumption the real economy is reliant upon will recover until the bailout has ceased and been marginalized over time.
103. To coordinate effective counter-measures under the WTO Agreement on Subsidies and Countermeasures and Art. IV of the IMF Articles of Agreement the case for DUNCE must be again argued in light of the spreading crisis that might provoke protectionism on the part of developing countries. The prevailing wisdom is that devaluating a nation’s currency stimulates the export trade, which is responsible for 2/3 of economic growth, now that the economic crisis has spread to developing nations, these nations might now be resistant to appreciating their currencies. These middle-income and developing countries must be reassured that currency appreciation will increase their purchasing power and their people will be able to purchase more technology and commodities with which to advance national development efforts and bolster the domestic and financial markets. To quickly neutralize the financial and economic crisis there is no other solution but to enforce the devaluation of the currencies of the colonial nations that printed money for the bailout to the full extend of the bailout. Otherwise, the recovery will take much longer to balance out the distorting effects of the illegal subsidies. In November, before news the contagion had spread to developing nations, it was estimated that the US dollar needed to devaluate 7% and the Euro 5.5%.
104. In light of the total $18 trillion amount of the bailout, 30% of the GDP, reported by the UN Conference, these devaluation estimates need to be re-evaluated. Keeping in mind that the currency exchange is a bilateral affair, and nations have unique positions, such as China that has invested heavily in US Treasuries and would stand to lose if their currency were unduly appreciated against the dollar and should therefore not be kept the same. The estimated benefits that would accrue from devaluating the dollar and Euro 30% it can be taken into consideration that the G-20 accounts for 85% of the world economy and a 30% appreciation of 15% of the $64 trillion world economy, would increase the economic value of middle income and developing nations from $9.6 trillion to $12.48 trillion dollars, an increase of $3.1 trillion to counter a loss of $2 trillion for a $67 trillion GWP and 2% economic growth rate for 2009, rather than a 2.1% decline. The end result of bilateral devaluation would thus be a richer and more equitable world, a victory of international monetary policy against the financial and economic crisis of the colonial powers struggling to maintain their dominance, after the American century ran out of drugs and fuel, ending the viability of Western domination, leading us to a more democratic society led by the peaceful people power of China and India and the socio-economic interests of developing nations. If the colonial banking nations resist their self interest to devaluate their currencies, the IMF can organize developing nations to purchase SDR, under Art. XV Section 1, as their reserve currency, at favorable rates, to enforce the law that was enforced by the dollar in so many emerging markets in the 1990s.
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