economics

Farmers in West Bengal, India have pushed Tata Motors off agricultural land.

"The West Bengal government acquired 1,000 acres of land for the Nano project in 2006.

"At least 10,000 farmers accepted compensation for their land, but approximately 2,000 of them rejected it as inadequate and demanded 400 acres of land be returned.

"'You cannot run a plant with police protection, you cannot run a plant when bombs are being thrown, you cannot run a plant when workers are being intimidated,' Tata said."

Harper during the debates:

"We are not in the kind of economic crisis we have in the US."

Merrill Lynch Canada Inc.:

"Households in this country are so indebted that it's only a matter of time before we see a major downturn here as well."

The Real Estate Board of Greater Vancouver:

"The Real Estate Board of Greater Vancouver says the number of residential property sales declined 42.9 per cent in September from a year earlier."

John Gray argues that the US financial crisis marks the end of the US/IMF model of "deregulation" economics, the end of US primacy, and the rise of economies that managed to avoid US/IMF strictures.

Ever since the end of the Cold War, successive American administrations have lectured other countries on the necessity of sound finance. Indonesia, Thailand, Argentina and several African states endured severe cuts in spending and deep recessions as the price of aid from the International Monetary Fund, which enforced the American orthodoxy. China in particular was hectored relentlessly on the weakness of its banking system. But China's success has been based on its consistent contempt for Western advice and it is not Chinese banks that are currently going bust. How symbolic yesterday that Chinese astronauts take a spacewalk while the US Treasury Secretary is on his knees.

(Article via Murray Dobbin's mailing list)

A strange and incredible amount of information is flowing from the Guardian about the inner workings of the $700 billion deal between Republicans and Democrats to bail out the US economy.

It's tough to judge what is real and what is fake but there some incredible stuff coming out.

According to one report, a deal had been reached by all parties until a group of hard-right, free-market Republicans met privately with McCain and threw a new "free-market" proposal into the mix.

Their behaviour at the meeting was a study in contrasts, according to press accounts. Obama, granted deference by his fellow Democrats, led off the debate.

Then [Republican minority house leader] Boehner made his move, throwing down a plan that differed wildly from the one under discussion. McCain, asked for his opinion, stayed silent - and that, according to those at the meeting, was taken by his fellow Republicans as a sign of his support for the Republican revolt.

Ironically, a Republican on the Senate banking committee, Richard Shelby, was doing his best to paraphrase the thesis of Naomi Klein's Shock Doctrine; that in a state of crisis the ideas lying around are the ones which get used:

"They're trying to push this in an emotional state, saying the sky's falling on our heads," he said. "Every time we have rushed to judgment in the past, we have paid for it."

With the bankruptcy of Lehman Brothers, the sale of Merrill Lynch and the subsiqent transformation of Goldman Sachs and Morgan Stanley, the titans of Americas investment industry has now been wiped off the map.

How bad is it and what does it mean?

A couple of US Congress members who had a nice little chat with the US Fed Chairmen and the US Treasury Secretary had this to say last Friday:

"We’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally. Somber doesn’t begin to justify the words. We have never heard language like this."

But is it all a smoke-screen designed to give the Fed and Treasury complete control over bail-out money? According to economist Paul Krugman:

"Mr. Paulson insists that he wants a "clean" plan. "Clean," in this context, means a taxpayer-financed bailout with no strings attached — no quid pro quo on the part of those being bailed out. Why is that a good thing? Add to this the fact that Mr. Paulson is also demanding dictatorial authority, plus immunity from review "by any court of law or any administrative agency," and this adds up to an unacceptable proposal."

Many popular anti-capitalists are interviewed in the Guardian regarding their view on the current sub-prime crisis.

Chris Harman - Socialist Workers Party

"The whole system is unwinding; the other day we saw the biggest nationalisation in the history of humanity and that still wasn't enough.

"This could be a big moment for the left. But we really need to stand up and use the "c" word, say this is a crisis of capitalism and that people are suffering."

Sheila Rowbotham - Socialist feminist

"The problem now - unlike in the 1880s, when people discovered the ideas of socialism, and in the 1930s, when it seemed that communism was the solution - is that the left doesn't have a coherent alternative vision."

Hari Kunzru - Novelist

"In New York apparently, 12,000 jobs went, just like that, and Wall Street represents 20% of the city's jobs and something like 90% its tax base. So there's a definite sense here of systemic crisis.

"This will only genuinely become a crisis of capitalism if people generally become aware that much of the growth and prosperity produced by capitalism is a fiction."

First a series of mortgage companies. Then UK bank Northern Rock. Then Bear Sterns, followed by Fannie Mae and Freddie Mac.

Now another major US bank, Lehman Brothers, is about to crumble under the weight of disastrous decision making in the wake of the subprime mortgage crisis and ensuing credit crunch.

Lehman Brothers controls almost $700 billion in assets. According to the Guardian, the US authorities have authorized emergency trading of Lehman's shares should it file for bankruptcy.

Though the US bailouts of Bear Stearns, Fannie Mae and Freddie Mac were supposed to prevent a 'domino effect' of US banks collapsing, it appears banks are failing anyways.

Should Lehman Brothers, the fourth largest bank on Wall Street collapse "it will be one of the biggest failures in Wall Street history"...again.

BC finance minister, Colin Hansen, has just released a report showing that forestry revenues in BC are down by 36 per cent.

Hansen was quoted in the Tyee's new election blog "The Hook" as saying: "The downturn we are seeing in the forest sector is unprecedented. Since 1993 it has never even come close to being that low."

The pine beetle, sub-prime crisis, high dollar and a series of forestry strikes in BC have all contributed to the downturn which the NDP finance critic Bruce Ralston characterized the industry as being "in a tail spin".

You would think something like a detailed road map of ‘the modernization of the Canadian forces’, at the big fancy 8th Conference of Defense Ministers of the Americas (CDMA) would elicit some sort discussion or analysis from the Canadian media/ chattering class. At the conference, Peter Mackay began to spin links between the need to respond to ‘natural disasters’ and ‘security of the Olympics’ with armed security. The highlight of the conference was the release of Canada's 20-year, $490 billion “Canada First Defense Strategy,” a detailed plan to modernize its armed forces and its military industry. McKay also signed a Memoranda of Understanding with his counterparts in Honduras, Guatemala and Bolivia, which falls under the Military Training Assistance Programme (MTAP). Yet hardly a boo, has been published about this week long conference, as the Republican convention in St Paul and the buzz around the soon to be announced election provided a nice blackout about things that were going on, that the media and lobbyist just aren't so interested in regular folks to know about.

So what do we know happened this week in the luxury resort of Banff where the delegates from 34 countries met under the theme of ‘Co-operation and Collaboration”?
According to CP Canadian Defense Minister and host of the conference, Peter MacKay addressed the crowd by stirring their shared belief that "Now more than ever, we are all connected and need to cooperate to achieve the security, democratic development, and prosperity we all desire”.

Over $5 trillion in troubled mortgages have been taken over (read: nationalized) by the US government. Freddie Mac and Fannie Mae (the two largest mortgage providers in the US) have been put into "conservatorship" in order to stop them from collapsing.

This is the biggest government bailout in US history and comes on the heels of Royal Bank chief executive Gordon Nixon saying that the global financial system has been "pushed to the brink".

A new study says high-income Canadians got a lot richer between 1992 and 2004, while the rest of the population made little financial progress.

The Statistics Canada study, which used tax returns to explore trends among high-income earners, found the top five per cent of the tax-filing population accounted for about 21 per cent of total income in 1992; by 2004 it accounted for 25 per cent.

The study found little improvement among the rest of the population and it says that while there were more high-income earners who were women in 2004, their share of the pie was depleted.

Three-quarters of the 1.2 million high-income Canadians were men, even though men were a minority (48 per cent) of individual income recipients in general.

--Report on Business (not, I note, the National section)

Much has already been written about the now front-page story of police provocateurs captured in a video posted on Youtube. The scandal has managed to cleanly separate the story of the protest from the story of the SPP itself, but it is definitely an unlikely story to have become front-page news.

Photo: IMC Montebello

The tear gassing appears to have started around 5:30 PM. By that time, much of the corporate media had left Montebello, and many of the demonstrators had left for Ottawa and Montreal.

‘They’re going to wait for the media to leave before they start to clear the demonstrators,’ my friend Kabir had remarked 20 minutes before. It ended up being a dead-on prediction.

The Liberal party, currently the confused chameleon of the Canadian political scene, is attempting to brand itself as an ardent critic of the secretive Security and Prosperity Partnership.