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Global EconomyAdvocacy International’s director, Ann Pettifor, brings to the company more than fifteen years of analysis, research and insight into developments in the global economy. Together with Prof Kunibert Raffer of the University of Vienna, and a group of London-based economists (led by Prof. Victoria Chick) she promotes Raffer’s proposal for an international Chapter 9 for sovereigns; and Keynes’ proposals for stability in global trade and finance through the establishment of a more balanced, and economically just international financial architecture. 
On my wall hangs the original of a cartoon of 12 June, 1999 by the FT’s Ingram Pinn. It is of an African bent over double by a burden of debt, while G8 leaders sit at a table perched precariously on top of the burden – ignoring the suffering African. The impoverished man is surrounded by campaigners, hollering at the G8 and with banners proclaiming: “Cancel the Debts” “Jubilee 2000”. Behind that cartoon lies a story.
The Middle East is known to Asians as the Middle West. This is the name given to a meeting (the West Asian and North Africa forum) convened by HRH Prince Hassan of Jordan with the backing of the Nippon Foundation of Japan. Ann Pettifor is in Amman as a guest of HRH Prince Hassan, and is one of the opening speakers at the three day forum. The forum exists, in the words of Prince Hassan, to “promote collective regional action to resolve conflicts, to promote good governance, to raise living standards, to protect the environment – to face challenges that no nation can tackle alone. You can read more here >
By Ann Pettifor: April 25th Huffington Post The humiliating surrender of Greece’s economic autonomy came just last Friday, 23 April, 2010. The democratically elected Prime Minister, George Papandreou transferred to unelected officials in Brussels and Washington the power to determine Greece’s fiscal policy. In other words, decisions about taxation, and how tax revenues should be spent. In a 26 April interview with the Financial Times on the island of Rhodes, the Prime Minister, George Papandreou admitted his country had accepted “a partial surrender of sovereignty”. Our struggle” he went on to say, “will be to recover our autonomy and liberate Greece from the surveillance imposed by the forces of conservatism”.
Back in 1765 Bostonians such as James Otis and Samuel Adams regarded “taxation without representation as a form of tyranny”. Today, a nation that served as the cradle of western democracy will effectively be governed by remote, invisible and unaccountable officials. Ann joins Joseph Stiglitz, Tariq Ali and Ruth Lea on Al Jazeera’s “Empire” With Saturday’s Iceland referendum due in just a couple of days (6th March), Ann and Jeremy have an op-ed article in today’s Morgunbladid, Iceland’s main daily newspaper. English version> Icelandic version> Press release> Full text of the article follows: So the negotiations have broken down, British and Dutch “bullying” (FT 27 February, 2010) continues and the referendum goes ahead. What next? We emphasize that this is not a sovereign debt crisis, even if the British and Dutch want us to think it is. It is a crisis of EU regulatory failure, and of the Anglo-American economic model. The people of Iceland have a deep democratic tradition, and through the referendum have the opportunity to assert their sovereignty and autonomy. Their leadership and example will encourage people in other democracies to reject harsh cuts in public services and living standards made at the behest of the very people and institutions responsible for the crisis. For through the wholesale nationalisation of private losses, we are all – not only in Iceland – asked to pay the price of private, reckless risk-taking. My conversation with Elena Sisti – of Italy’s Altreconomia on macro-economics, reform of the finance sector, money, and yes, how we women have left the all-important matter of finance to the boys. Big mistake. It’s time to get in there, and exercise influence. Too much is at stake.
Women will have to work to feminise macrofinance – by taking economics courses; by challenging economic orthodoxy; by taking positions in banking and finance. Above all, by understanding the nature of credit and bank money. From the Guardian.co.uk I was astonished to read Lord Myners’s assertion that banks use our deposits to lend out to businesses and homebuyers. (Comment, 25 January). This is simply not the case, and has not been the case since 1694 when the British banking system was established, and intangible bank money began the process of creating deposits in the banking system. We have just lived through a period of asset price inflation fuelled by credit-creation that bore little relation whatsoever either to a) our deposits in banks, or b) to the underlying value of assets. Far from the bank starting with a deposit or reserves as a basis for lending, the bank starts with an application for a loan, the asset (eg property) against which to guarantee or secure repayment, and the promise to repay with interest. A bank clerk then enters the number into a ledger/computer, and charges it to the account of the borrower. This is credit and has been known since 1694 as bank money – intangible and essentially free. The bank does not need savings, deposits or reserves to create credit. If this were the case there would only be as much credit as there are deposits in the bank. These limits would have constrained an asset price bubble, as assets would not have been artificially inflated by underregulated credit creation. Once the loan is agreed, the bank then applies to the Bank of England for the cash element, which is a very small proportion in these days of debit/credit cards. The fact that small businesses cannot obtain loans from banks, except at high rates of interest, has nothing to do with our deposits, but with the failure of bankers to fulfil their role and meet the needs of society and the economy. Which is why Lord Turner was right to dismiss them as “useless”. That failure may not have occurred if the Treasury had a better understanding of monetary theory and practice. Ann Pettifor One is president of a country of about 300,000 people — Iceland — a country about the size of Virginia, President Olafur R. Grimsson. The second is president of a country of about 300,000,000 people, the United States. President Obama. Both their presidencies have been scarred by the financial crisis. Both have had to balance the interests of their people against the interests of their bankers. President Obama has allowed that balance to tilt in favor of the bankers. |
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