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Catching a Falling Financial Knife

Monetary Causes of the US Immigration Crisis

Politics / Immigration Jun 25, 2007 - 12:08 AM GMT

By: Richard_C_Cook

Politics

There is nothing mysterious about the U.S. immigration crisis, or the presence of twelve million or more illegal aliens, or the fact that many more are coming to a neighborhood near you.

They are coming to the U.S. because they are human beings who have to eat.

They have to eat because they want to live.

They cannot eat and live in their own countries because there are no jobs.


There are no jobs because the monetary policies of the “Washington Consensus” have wrecked their economies.

It has wrecked their economies in order to benefit the financiers who are behind the Washington Consensus, including the ones in their own countries who act as partners in running the lending programs that have caused so much damage.

So what would be more fitting that the bureaucrats and politicians in Washington who approved these policies have the immigrants whose lives they ruined now greeting them with a nod every morning when they show up to mow their lawns, trim their bushes, and repair their homes? Not to mention the ones who are clamoring for social services and amnesty, who march in street demonstrations, who want to bring their relatives into the country with them, who may be starting to claim that the U.S. really belongs to them, and some of whom clog the jails of the border states. Then there are the ones who send billions of dollars home each year to float the economies of their hapless home nations whose domestic economies are so dismally poor.

When I was working at the U.S. Treasury Department there was a joke:

Question: “What did Davy Crockett say when he looked out over the wall of the Alamo?”

Answer: “Where'd all them lawn maintenance guys come from?”

Of course it really isn't a joke, especially when you realize the extent to which illegal aliens who work for low wages undercut the livelihood of so many American citizens. Or when you consider the human misery the illegals suffer from dislocated families, hiding from the law, being without health care, taking abuse from the criminals who transport them across the borders, or living every day in marginal or even subhuman conditions.

The Washington Consensus is the set of monetary and economic conditions imposed through “Structural Adjustment Programs” on developing nations by the International Monetary Fund, along with similar arrangements imposed by the World Bank and other Western political and economic agencies as conditions of receiving loans.

The SAPs are part of a broader neo-liberal economic agenda euphemistically called “free-market reforms” by newspapers such as the Washington Post. They are the price paid by countries for loans from the international bankers who control large-scale lending to their governments.

Such programs have deep historic roots. The IMF and World Bank date from the Bretton Woods agreements at the end of World War II. While these agreements aimed at stabilizing the world monetary system and established the dollar as a de facto world reserve currency, they had an underlying intent to ensure a positive trade balance for the United States in order to maintain the full employment economy brought about by World War II.

All the world's nations were expected to be part of this system. When the Soviet Union refused to participate, giving precedence in the process to U.S. objectives, we declared the start of the Cold War.

The IMF's SAPs include privatization of public resources and utilities, removal of barriers to investment by transnational corporations, the sale of state assets, elimination of price controls and subsidies from consumer markets, lowered business taxes, and layoffs of state employees. Then there are free-trade agreements such as NAFTA which has destroyed Mexican family agriculture.

The conditions also include a shift of indigenous economies to the production of export commodities, away from local self-sustaining agriculture and small business. This typically results in a mass exodus from rural areas to urban slums and causes poverty, unemployment, and crime. These financial programs benefit the local educated elite who work with the Western agencies and global corporations but cause a deep and permanent stratification among social classes.

The results have been the same everywhere in the world, particularly among the nations of Latin America, Africa, Southern Asia, and Eastern Europe. Everywhere the standard of living suffers for a majority of the local people. Now a worldwide crisis is developing, as the International Labour Organization reports that global unemployment has never been higher.

Developing nations are susceptible to this exploitation mainly because they have no independent monetary system. Most use the U.S. dollar as a reserve currency, which then feeds into the fractional reserve banking system that is operated by branches of banks headquartered in the U.S., Canada, Europe, and Japan.

The local nations pay a heavy price for this service, not only through payment of market interest rates but also because banking profits leave the country for the financial centers elsewhere. Foreclosures and bankruptcies also result in a migration of property ownership outside the country.

But change is stirring. Venezuela, for instance, has dropped out of the IMF and the World Trade Organization and plans to make its own way using funding from its oil revenues. Other Latin American nations are beginning to work with Venezuela as well as with Russia and China in locating alternative funding sources. China is replacing the IMF in some African countries by providing loans without conditions using dollars acquired from the U.S. in trade.

It is likely that the Washington Consensus will eventually disappear as the rest of the world grows up and realizes that the victor of World War II cannot keep everyone else under their thumb forever. The big question is whether the U.S. will go down fighting by attempting to control the rest of the world by force of arms, as it is now doing in the Middle East, or will it find a way to adapt to the new realities and live as a partner in peace with other nations and peoples.

One thing is certain. The only way to stop the flood of illegal immigrants from completely overwhelming the U.S., Canada, and Europe is for these nations to help their less fortunate brethren become prosperous. This means abandoning the Washington Consensus and giving up the claims of the Western financiers to near-total domination of worldwide resources.

It means, above, all, helping developing nations establish monetary systems that can unlock the productivity of their own people, minerals, and land. The problem is that the U.S. and other developed nations themselves do not have democratic monetary systems.

They too are suffering from their own overhang of massive amounts of unpayable debt due to their own fractional reserve banking systems that benefit the financial elites at the expense of their own populations. In fact the average citizen of the more prosperous nations is growing poorer every day and coming more and more to resemble economically the immigrants who are threatening their jobs.

Wrapped around the souring of the debt-laden national economies is the worldwide financial bubble that every responsible analyst knows must deflate. The answer is not the so-called “soft landing,” which in reality is a “controlled” worldwide financial crash that could last a decade or more, with the rich having the inside track on laundering and harboring their assets.

Instead, the author has written a series of recent reports based on over twenty years of study with the U.S. Treasury and the monetary reform movement. This program explains how the U.S. can establish a new monetary system using American constitutional principles that would treat credit as a public utility rather than the private playground of the monetary controllers. These principles could be applied by developing nations as well.

Once these principles were adopted, countries could build healthy, productive indigenous economies based on maximizing self-sufficiency and participating in regional and worldwide trading systems that benefit all parties. Then there would be no reason for millions of people to risk their lives, health, and social well-being to flee the deadly poverty of their homelands for the marginal poverty they find here. There really is no other answer.

By Richard C. Cook
http:// www.richardccook.com

Copyright 2007 Richard C. Cook
Richard C. Cook is a former federal government analyst who was one of the key figures in the investigation of the space shuttle Challenger disaster. He is author of the book - Challenger Revealed: An Insider's Account of How the Reagan Administration Caused the Greatest Tragedy of the Space Age is Richard C. Cook's personal story of how he disrupted the cover-ups surrounding the Challenger disaster.

Richard C. Cook Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Carson Dugal
25 Jun 07, 00:30
I'm getting a kick out of this Article because I'm NOT an Economist

When the economy collapses I figure it will be because of the illegal labor, and this problem is now worldwide.

I'm in the U.S. so I’m getting a kick out of some of the comments here because I’m NOT an economist.

I can sort of see how a myopic economist may be able to see an increase in profits by snuffing the descendants of the founders of this country. That makes room for the criminals in business’s illegal labor. Not only can many of the illegal invaders be paid off in token wages but that also leaves the honest workers stiffed with the criminal’s taxes, medical and social services. It’s a pure genius way of eliminating any competition. They won’t be able to compete on that playing field. Every day more and more will go under.

The part that confuses me is I can see examples of some of the illegal aliens previous work. How will all of the crime that surrounds illegal immigration be helping you out when the honest people are forced to join in, in the lawlessness?

They (who) seek to establish systems of government based on the regimentation of all human beings by a handful of individual rulers. . . call this a new order. It is not new and it is not order.

-- Franklin D. Roosevelt


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