Update: April 5, 2009 added Pt 2
Can G20 avert the crisis?
Leo Panitch: G20 trying to patch up the ‘old world order’
Following the G20 summit yesterday, British Prime Minister Brown made the announcement that a “new world order is emerging” that will allow the global society to be more open, fair and sustainable.
However, it sounds more like a plan to try to keep the same world order that was around in the 80s and 90s according to Leo Panitch, Canada Research Chair in Comparative Political Economy at York University and the author of American Empire and the Political Economy of International Finance.
“It’s impressive that the 19 leading world states…and the European Union have not fallen apart during this tremendous crisis and they’ve come together with an agreement around a bunch of rhetoric, but also around some measures,” said Panitch.
The rhetoric is that the countries are in this together, which is significant considering that in the economic struggle of the 30s the capitalist governments all turned on each other. Since then the same class and state structures exist.
The measures being taken is a provision of $500-billion to the International Monetary Fund since exorbitant interest rates have stalled international trade.
“This is not the kind of thing that’s going to get us out of this problem,” Panitch said. “The central problem is that banks aren’t lending. And all of the brew ha ha in the run up to this meeting about whether there was going to be more regulation for when the banks start lending again, ’cause right now it’s doesn’t matter. It’s not like they’re engaged in speculation. They aren’t speculating. They aren’t lending at any level of risk. And the fiscal stimulus doesn’t address that either.The trouble with the fiscal stimulus is that unless the banks are lending then the multiplier effect of that fiscal stimulus doesn’t kick in. There’s nothing that the G20 is doing that is really addressing that except ensuring that the bankers don’t get more frightened.”
Leo Panitch: Too big to fail? Nationalize
Leo Panitch: Can G20 avert crisis Pt2