From Volume 36, Issue 38 of EIR Online, Published Oct. 2, 2009

Global Economic News

G20 Maintains the Delusion, and the Bailouts

Sept. 28 (EIRNS)—The principal policy statements coming out of the meeting of world leaders in Pittsburgh, Pa., under the auspices of the G20, were two: first, to congratulate themselves for having carried out the most massive bailout in history—which they decided had to be continued for the time being; and two, to declare that the G20, not the G8, should now be considered the responsible international body for making global economic policy.

The delusional nature of the whole affair is exemplified by the first five points of the communiqué:

"1. We meet in the midst of a critical transition from crisis to recovery to turn the page on an era of irresponsibility and to adopt a set of policies, regulations and reforms to meet the needs of the 21st century global economy.

"2. When we last gathered in April, we confronted the greatest challenge to the world economy in our generation.

"3. Global output was contracting at pace not seen since the 1930s. Trade was plummeting. Jobs were disappearing rapidly. Our people worried that the world was on the edge of a depression.

"4. At that time, our countries agreed to do everything necessary to ensure recovery, to repair our financial systems and to maintain the global flow of capital.

"5. It worked...."

IMF Fascist Blanchard Calls for Overhauling Health-Care, Raising Retirement Age

PARIS, Sept. 25 (Nouvelle Solidarité)—Olivier Blanchard, IMF chief economist, called once again, in an interview in L'Express on Sept. 23, for France to overhaul its health-care and retirement expenses, because the financial markets will not continue lending if the deficits grow too large. Blanchard does not hide the fact that the present upswing is "technical," and "the phenomenon is temporary," as are the stimulus packages, "whose impact will only be felt up to the first quarter of next year, and will then start diminishing."

Asked how to avoid a "Japanese-style scenario" of 20 years of stagnation, Blanchard says that the stimulus, which was intended to be temporary and therefore cost less and less, might have to be continued, combined with structural reforms. But when it comes to health-care and retirement costs, "we're taking a route toward problems which, over time, will be much greater than those occasioned by the stimulus plans."

We have to work on two fronts, he says, "lest financial markets sooner or later lose confidence in states' ability to repay. We don't know when or how, but the consequences could be extremely unpleasant. Reforms are therefore all the more necessary today. In France, for example, that means raising the retirement age. In the United States, health-care reform, to bring in a more equitable and effective system, is crucial for the same reasons."

Milk Strikers Force EU To Propose 'New Regulation'

Sept. 27 (EIRNS)—The European Milk Strike, after two weeks of successful action by more than 100,000 dairy farmers from France, Belgium, Italy, Germany, the Netherlands, Luxembourg, Austria, and Switzerland, forced the European Union to accept to convene a EU Council meeting on Oct. 5, to cope with the sharp drop of prices and the market deregulation resulting from the EU's own decisions. Until that date, dairy farmers have decided to "suspend" the strike temporarily to give decision-makers a chance to offer them an alternative. If their voices are not heard, the strike will intensify. (See article in InDepth, for background.)

In a policy statement on Sept. 25, LaRouche's co-thinker in France, Jacques Cheminade, president of the Solidarity and Progress movement (Solidarité & Progrès), reacted by warning farmers not to be fooled by this "Franco-German" call for "new agricultural regulation" (which is in reality a letter to the EU co-signed by French Agriculture Minister Bruno Le Maire and German Agriculture Minister Ilsa Aigner and now supported by 20 EU member states).

Farmers are right in telling their governments, "We don't want money, we want a policy!" Cheminade proposed that a good policy has to be "the protection of producers and consumers in a framework of mutual economic development allowing both a fair price for the producer and high salaries for the consumer. That means a break from the current monetarist system and a return to policies of productive state credit." So far, concluded Cheminade, "Europe has made the opposite choice and France is submitting to that choice."

Lyndon LaRouche in the United States and BüSo Chancellor candidate Helga Zepp-LaRouche in Germany, have defended these policies for decades.

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