In a recent report prognosticating Latin America’s future, the National Intelligence Council, an advisory group to the CIA, NSC, and Pentagon made up of military and academic national security experts, fretted that indigenous movements, such as those found in Bolivia protesting corporate control of gas reserves, could “evolve into more radical expressions,” converging “with some non-indigenous but radicalized movements – such as the Brazilian ‘landless,’ the Paraguayan and Ecuadorian peasants, and the Argentine ‘picketers.’” “In this scenario,” the report went on, “by 2020 the groups will have grown exponentially and obtained the majority adherence of indigenous peoples in their countries, and a ‘demonstration’ or ‘contagion’ effect could cause spillover into other nations. The resulting indigenous irredentism would include rejection of western political and economic order maintained by Latin Americans of European origin, causing a deep social fracture that could lead to armed insurgency, repressive response by counter-insurgent governments, social violence and even political and territorial balkanization.”
– pgs. 213, 214, EMPIRE’S WORKSHOP, by Greg Grandin, Owl Books, New York, 2006.
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If, as virtually all the pundits agree, the decision to have Uncle Sam take over that pair of moribund siblings, Fannie Mae and Freddie Mac, is a no-brainer, we can all breathe a sigh of relief. For who, pray tell, is better equipped for a no-brainer than the crew in Washington tending the economy?
The rationale for the mother of all bailouts – the companies taking on water fast have a combined $5.3 trillion in debt, which even in these extravagant times is not exactly small change – is that they are “too big to fail” (try telling that to the dinosaurs). As someone recently noted, President Nixon, when informed that a corporate goliath in dire straits was too big to fail, chuckled wickedly and said: “Tell it to get smaller.”
– pg. 5, BARRON’S, Monday, September 15, 2008
The Statistical Institute of Belize last week revealed that inflation in Belize had jumped 6.5 percent from November 2007 to May of 2008. This means that there was that much more money in circulation than hard production – real Belizean goods and services, hence prices of necessary commodities rose by that much. Our money lost value. Inflationary trends will not have slowed since May, even though the primary cause of inflation – surging oil prices, began to return to a semblance of “normality” in the last few weeks.
The greatest danger of inflation is how it affects those Belizean citizens who do not have a financial comfort zone, which is to say, cannot reduce their standard of living without beginning to suffer and becoming distressed on the personal level. Inflation, where the community and society are concerned, always causes crime and social unrest.
As it is, Belize already has too much crime, but not the accompanying social unrest. The reason there is little social unrest is because Belizeans were so relieved to be rid of the previous Musa/Fonseca government, that they have ignored the clear signs of incompetence in the present UDP Cabinet.
The people of Belize are feeling pain, and the suffering will grow worse. The most relevant financial system for Belize, Wall Street in New York City, is experiencing, as one commentator described it, “a tectonic shift” in its landscape. Over the weekend, the 158-year-old Wall Street investment bank, Lehman Brothers, filed for bankruptcy. Another Wall Street centurion, Merrill Lynch, is being saved from collapse by a US $50 billion Bank of America bailout. AIG, the firm with which the famed financial guru Alan Greenspan is involved, just lost US $3.1 billion.
Lehman’s collapse means 20,000 jobs are lost. This affects Belize’s economy directly, because some of those who lose jobs will be New York City Belizeans, who have always assisted family members back home. And Indirectly, Lehman’s catastrophe will hurt the tourism industry in Belize, a tourism industry which already just declined in Belize for two successive quarters, according to the Statistical Institute, the first time this has happened in ten years!
Lehman’s bankruptcy is not occurring in a vacuum. Wall Street is reeling from financial hurricanes. The week before Lehman’s crashed, the United States Federal Reserve had to bail out, to the tune of billions, Fannie Mae and Freddie Mac, Wall Street’s mortgage-financing titans. A few months ago, another Wall Street institution, Bear Stearns, collapsed and was taken over. Wall Street’s woes will not only affect Albert Street – Belize City’s Wall Street, negatively. The financial institutions worldwide are exposed to each other in almost incestuous ways. Where Wall Street goes, the world will follow.
Crude oil has fallen to US $95 a barrel from a high of around $147 a couple months ago. Belize therefore loses a quick 35 percent where its oil windfall tax futures are concerned, but the Belizean consumer does not simultaneously see a 35 percent drop in gasoline and diesel prices. So, from the Belizean layman’s standpoint, surging oil prices hurt us at the pump the whole of this year, and now falling oil prices will hurt us at the Treasury – the classic double whammy.
Between 1998 and 2004, Belizeans were living way above our means. In a sense, we were being anesthesized by Ralph Fonseca, while he and his cronies looted the Social Security Board, the Development Finance Corporation, and mortgaged our future to the same Wall Street brokerage firms which are now in absolute panic. Had there not been a G-7 revolt in the PUP Cabinet in August of 2004, and a resultant uprising in the streets a few months later, Belize would no doubt now be in sovereign default.
The relevance of the previous paragraph is this. Those who made hundreds of millions off Ralph’s neoliberal privatizations, bloated contracts, sweetheart deals, and overall reckless financial management, are finding it difficult to accept that the party’s over. They are still trying to control the Opposition PUP under the guise of being “genuine investors.” Bull s—t. They never invested anything. They used the Belizean people’s money, with Ralph’s connivance and George Price’s blessing, to buy monopolies like Port Authority, the national bus runs, BTL, etc. They received sovereign capitalization and they were given profit margins guaranteed by the elected government of Belize. These “genuine investors” never functioned in a free marketplace. There was no risk involved, only cream. They had managed to take over a people’s political party, and they used it as a government front to rip off the Belizean people.
There is a bottom line here. 44.3% of the people of Belize are under 18, and the youth unemployment rate has officially reached 24%. It is probably much higher than that. When the people of Belize realize the UDP Cabinet does not have the ability or the guts to address the root problems here, the people of Belize will not return to the PUP “old guard” and their “genuine investors.” Rather, something will happen in Belize, socio-politically speaking, which will be out of control. In the words of Bob Dylan, “a hard rain’s gonna fall.”
Power to the people.