The World Bank is concerned that the economic crisis of the developed world will condemn poor countries to a decade’s long depression. Robert Zoellick, the World Bank President, claimed that the crisis has already driven 100 million people into poverty and it will continue if the major countries don’t keep the foreign aid checks flowing. Look for a rash of poor countries defaulting on their debts as the world passes through the most severe economic storm since the Great Depression. Look also for a discontinuation of foreign aid as we know it and the emergence of poor countries being pressured to join the new global economic structures that will soon emerge. Not that I’m actually predicting the emergence of a slick new economic colonialism that will be much classier than what’s been achieved in the past! The third world may cease to exist as poor countries are forced into collectivist arrangements when aid will be dispensed with more hands on management of their poor economies. Naturally this would be necessary for their own good. Consider the following from the Associated Press and the Jerusalem Post:
The World Bank agreed Sunday to help developing countries strengthen their economies, bolster their financial systems and protect the poor against the financial turmoil in international markets.
Robert Zoellick, the bank’s president, said the contagion affecting the global economy “has been a man-made catastrophe and responses to overcome it lie in all our hands.”
“The poorest and most vulnerable groups risk the most serious – and in some cases – permanent damage,” Zoellick said. “100 million people have already been driven into poverty this year and that number will grow.”
Zoellick said the financial crisis underscored the need for “concerted global action now not just to deal with the crisis but to put in place new architecture, new norms and new oversight to ensure that this crisis never happens again.”
Meanwhile back in , a thirty something player –the-Treasury Department, Neel Kashkari, held and exuberant press conference on how the $700 Billion Bailout would be structured, and how it would actually work. He was an impressive young man with a haircut like Telly Savalas and eyebrows like Joseph Stalin; the Wiz-Kid-Assistant to Paulson exuded all the right stuff. He was the kind of “citizen of the world” we need to administer this new “socialist” reform amid the New World Order of “collective action” among the democratic developed nations of the world. He must have been very convincing, along with the concerted actions in Europe and the encouraging statements from Japan, because as of this writing the Dow is up 936 points at 4:11 PM EDT. The Stock Market’s loving the socialism, disguised as temporary, as the fear of economic distress actually brings the United States and Europe a new and improved form of Fascism. (Corporatism if you prefer)
The administration’s interim bailout package chief, Neel Kashkari, said the government is moving quickly to implement the rescue program, including consulting with private law firms on how to buy stakes in banks to boost their cash reserves.
He spoke as The Bank of England, the European Central Bank and the Swiss National Bank jointly announced they would work together to provide unlimited short-term funds to make money available to ease the credit freeze. The Bank of Japan said it was considering a similar move.
To assist the European banks, the Fed said it was taking actions to assure enough U.S. dollar funds were available to meet demand.
“The government cannot just leave people on their own to be buffeted about,” said British Prime Minister Gordon Brown.
European governments said they are putting nearly $2 trillion on the line to protect the continent’s banks through guarantees and other emergency measures.
The Bush administration welcomed the moves in Europe, saying what was needed now was a strong effort to demonstrate the resolve of governments to deal with the problems.
“We must all act decisively, individually and collectively, according to our needs, to secure stability and growth for the world economic and financial order,” Treasury Secretary Henry Paulson said in statement. His prepared remarks to the closing session of the 185-nation International Monetary Fund and World Bank were read by Assistant Treasury Secretary Clay Lowery. Aides said Paulson was too busy working on the rescue program to attend the closing day of the three-day discussions.
Not to throw cold water on the fires of international unity and cooperation, to say nothing of a historic gain by Wall Street, but it might be wise to take into consideration this from Bill Gates as reported by Bloomberg:
Higher personal and governmental debt are contributing to the U.S. economic slowdown, Gates said today in comments at Harvard Business School in Boston. The U.S. unemployment rate climbed to 6.1 percent in August and stayed at that level in September.
It would seem that on the “long march” to regional corporatism, regional fascism, or simply the New World Order; we’re due for some bumps in the road like 10% unemployment and inflation in the aftermath of the bailout. We may well have avoided a depression but at the expense of throwing away our system of government and too much of our personal liberty. We did it to join a regional, ideological collective, with Europe, that will one day place us on a collision course with other emerging regional powers like China/India and the Russian Collective Powers. (The Old Soviet Empire)
We’ve failed to head the world of Benjamin Franklin who said: A People who would sacrifice their liberty for security (economic security in our case) deserves neither liberty nor security.
For today everyone is relieved and it looks possible that the government may solve the frozen credit riddle. And the world we know, except for an increasing number of “little things”, will continue for a time. The dreaded depression may have morphed into a “sharp recession” even as we’re encouraged to celebrate the emergence of new global institutions that will keep everyone safe.