From 2010 to 2013, US authorities made agreements with banks, not to prosecute them in the home mortgage and illegal foreclosures scandal. Instead, they merely had to pay a small fine. Since the outbreak of the crisis in 2006-2007, more than 14 million families have been evicted from their homes — at least 500,000 illegally. With help from social movements such as Strike Debt [1], many victims have become organized to resist the sheriffs and refuse these evictions. In addition, thousands of lawsuits have been filed against the banks.
Banks and the New “Too Big to Jail” Doctrine
30 August 2014, byWe all know the saying, “Too big to fail”. The way governments have managed the crisis caused by the banks has given rise to, “Too big to jail,” [2] which is equally poetic! [3] Although the US government let Lehman Bros. go to the wall in September 2008, no other bank has been closed or broken-up, no directors have been condemned to prison [4]. The only exception in the western world is Iceland, where the courts have put three bank directors in prison. Larus Welding, the CEO of Glitnir, Iceland’s third biggest bank at the time, which went bankrupt in 2008, was condemned, in December 2012, to nine months in prison. Sigurdur Einarsson and Hreidar Mar Sigurdsson, the two principal directors of Kaupthing [5] were condemned to five years and five and a half years in prison in December 2013. [6]
The cancellation of German debt in 1953 versus the attitude to the Third World and Greece
26 August 2014, byThe United States cancelled the debts of some of its allies. The most obvious instance of this kind was the way the German debt was largely cancelled by the 1953 London Agreement. In order to make sure that the economy of West Germany would thrive and thus become a key element of stability in the Atlantic bloc, the creditor allies led by the United States made major concessions to German authorities and corporations - concessions that went beyond debt relief. A comparison between the way West Germany was treated after WWII and the current attitude to developing countries or to Greece today is a telling story.
Why the Marshall Plan ?
25 August 2014, byAs its initial name indicates (International Bank for reconstruction and development), the World Bank (WB) had two main objectives:
1. bring financial support to the reconstruction of the countries that had been devastated by the Second World War;
2. grant loans to contribute to the development of backward countries (as developing countries were then called). The US, that call the music at the WB and on the international scene, decided that they would do without the WB for their reconstruction mission in Europe and unilaterally set up a large financial programme intended to restore the European productive apparatus in the countries within their orbit.
A Renewed Strategic Perspective on Socialist Work in the Labor Movement
16 August 2014, byThis February, the Solidarity Labor Commission held a two-day retreat at which we reflected on Solidarity’s labor work and the rank-and-file union perspective that has guided it for decades. This outline of a renewed strategic perspective is what emerged from our discussions. Although there is much here that is new, this perspective reflects our attempt to interpret the trajectory of union reform work since the 1980s and the political dynamics of the current period through the lens of Solidarity’s long-standing commitment to a politics of “socialism from below.”
SUNFED versus World Bank
6 August 2014, byFrom 1950 to 1960, having no Marshall Plan to promote their growth, the developing countries proposed that a new UN body be created, based on a “one country, one vote” system designed to facilitate loans to their industries: SUNFED (Special United Nations Fund for Economic Development). The industrialized countries were fiercely opposed to this move, and successfully imposed a counter-proposal, the International Development Association (IDA), a branch of the World Bank, thus effectively putting an end to SUNFED. [7]
Early conflicts between the UN and the World Bank/IMF tandem
6 August 2014, byThe World Bank and the IMF are specialized institutions of the UN, comparable in theory to the International Labour Organization (ILA) or the Food and Agriculture Organization of the United Nations (FAO). As such, they are supposed to cooperate closely with the various UN bodies and the other specialized institutions to achieve the objectives set out in the Charter and in the Universal Declaration of Human Rights.
The World Bank assists the powerful witch-hunters
28 July 2014, byContrary to common belief, the mission of the World Bank is not to reduce poverty in developing countries. The Bank’s mission, as originally conceived by the victors of the Second World War, the United States and Great Britain in particular, was to help rebuild Europe, and secondarily to promote the economic growth of the countries in the South, many of which were still under colonial rule. It was this second mission that went by the name of “development” and which constantly increased in scope. The World Bank lent money first of all to the colonial powers (Great Britain, France, Belgium) to help them more effectively exploit their colonies. Then, when these colonies became independent, the Bank made them liable for the debt that had only been contracted by their former metropolis in order to better exploit their natural resources and their population.
Concerning the founding of the Bretton Woods’ Institutions
28 July 2014, by70 years ago, July 22 1944, the United Nations Monetary and Financial Conference, better known as the Bretton Woods [8] Conference, that had lasted for three weeks, reached a conclusion.}} It was attended by representatives from 44 countries [9].
In order to prevent a recurrence of economic crises like the crash of 1929, but also to ensure world leadership in the post-war era, the United States government began to plan for the creation of international financial institutions as early as 1941. The World Bank and the International Monetary Fund saw the light of day at the Bretton Woods Conference of 1944 held in Bretton Woods, New Hampshire. Initially, the Roosevelt administration was in favour of creating strong institutions capable of imposing rules on the private financial sector, including Wall Street. But noticing the hostility of the banking world Roosevelt backed down. Indeed, the distribution of votes within the World Bank and the International Monetary Fund clearly illustrates the will of certain major powers to exert domination over the rest of the world.
Freedom Summer, 1964: An Overview
9 July 2014, byJust two weeks after the August 28, 1963 March on Washington, four girls aged 11-14 — Addie Mae Collins, Cynthia Wesley, Carole Robertson and Denise McNair — died in the bombing of the 16th Street Baptist Church in Birmingham, Alabama.
Footnotes
[1] Strike Debt, ’United States : The Debt Resisters’ Operations Manual’, 25 March 2014, http://cadtm.org/The-Debt-Resisters-Operations
[2] The author thanks Daniel Munevar, economist at the CADTM, who produced a very useful and concise preliminary study on the subject and authorised the easy use of his work. I have built on his research. See the original article by Daniel Munevar, « La doctrine «trop grandes pour être condamnées» ou comment les banques sont au-dessus des lois », 20 September 2013, www.cadtm.org/La-doctrine-trop-grandes-pour-etre (in French or Spanish)
[3] The English-speaking media have been using this phrase for about two years : see for exemple: Abc News, "Once Again, Is JPMorgan Chase Too Big to Jail?", 7 January 2014, http://abcnews.go.com/Blotter/madoff-ponzi-scheme-prosecutors-find-jpmorgan-chase-big/story?id=21448264 or Forbes, "Why DOJ Deemed Bank Execs Too Big To Jail", 29 July 2013, http://www.forbes.com/sites/tedkaufman/2013/07/29/why-doj-deemed-bank-execs-too-big-to-jail/
[4] Another way of saying that no bank has had it’s obligatory licence for banking activities revoked.
[5] The failure of its “Icesave” subsidiary in the UK and the Netherlands caused a diplomatic crisis between these two coutries and Iceland. This crisis is still ongoing since the two countries are attempting to bring the case before Icelandic courts in spite of the judgement, without possible appeal, by the AELE court that ruled in favour of Iceland in January 2013. See Financial Times, “Iceland premier repels Icesave lawsuit”, 12 February 2014.
[6] The Financial Times said 13 December 2013, “Iceland, almost uniquely in the western world, has launched criminal cases against the men who used to lead its three main banks that collapsed after the global financial crisis in 2008 after collectively becoming 10 times the size of the island’s economy.” See: http://www.ft.com/intl/cms/s/0/eab58f7e-6345-11e3-a87d-00144feabdc0.html#axzz2thdbsViQ
[7] This section is largely based on Van de Laar, Aart. 1980. The World Bank and the Poor, Martinus Nijhoff Publishing, Boston/The Hague/London, 1980, p. 56-59 ; Mason Edward S. and Asher, Robert E. 1973. The World Bank since Bretton Woods, The Brookings Institution, Washington, D.C., pp. 380-419 ; Gwin, Catherine. “U.S. relations with the World Bank, 1945-1992”, in Kapur, Devesh, Lewis, John P., Webb, Richard. 1997. The World Bank, Its First Half Century, Volume 2, pp.205-209; Rich, Bruce. 1994. Mortgaging the Earth, Earthscan, London, p.77.
[8] Bretton Woods is located in the mountains of New Hampshire.
[9] This text has been first edited in French by Eric Toussaint, Banque Mondiale: Le Coup d’État permanent, CADTM-Syllepse-Cetim, Liège-Paris-Genève, 2006, chapter one. The book has been edited in English, The World Bank : A critical Primer. Pluto Press, 2007.