Q&A

Globalization’s Aftershocks

What's the collapse of the Eastern bloc got to do with America's credit crisis? Author Loretta Napoleoni explains.

By Temma Ehrenfeld | Newsweek Web Exclusive

Apr 23, 2008 | Updated: 1:23 p.m. ET Apr 23, 2008

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Discuss

Posted By: Holly Garfield @ 04/25/2008 10:15:51 AM

Comment: I may agree that the problems Loretta Napoleoni cites exist. However, the main contribution to the current financial situation is still the US subprime market, opacity in vehicles attached to the toxic loans and very poor management at the top financial institutions. The rogue economic environment is a big problem, especially in the emerging and still closed markets, but the size of the problem is still no match for the subprime problems. The size difference of the underlying markets is still too great for rogue economics to be a major factor today. Her contention that unemployment went from virtual 100% to 0% at the Berlin wall collapse is economically impossible. Besides, if there had been 100% employment the Soviet bloc would never have collapsed in the first place. The doubling of the labor supply in the west clearly doesn't apply to the US. I live in an area with a huge immigrant population, and about 20% of the population here is first generation immigrants, including many from southeast Asia and Africa. How much of that doubling is from Soviet bloc countries migrating to NATO? Rogue economics is a problem that involves the maturing of currently developing economies. We need better regulation to bring transparency to the financial markets worldwide. We need central bank regulation to keep the normal economic cycles under control. Much of the economic swing is due to trying to artificially extend the normal upswing. The market in sex slaves may be repugnant, but is a drop in the bucket of the global economy. I notice there were no numeric analyses in this article to back up her contentions. Without those analyses her arguments are hard to either defend or deny. Without those numbers I really can't see justifying her conclusions. The numeric information she does give seems to have no basis in reality.
Posted By: Braes @ 04/25/2008 2:41:48 AM

Comment: We had no Marshall Plan. We called a peace dividend and unbuilt our defenses
Posted By: kdawg860 @ 04/24/2008 10:20:34 PM

Comment: on the contrary to mainstream economists' and the public's perceptions, it is the regulation of money, esp credit, by central banks such our american federal reserve that have led to the big booms and busts ever since the fed was created in 1913. we have had wealth destroying booms and busts for the past century all thanks to the fed regulated money. the great depression was caused by the inflationary policies of the fed that led to the expansion by cheap credit and decadent "roaring 20's", ultimately resulting in the crash of 1929. of course, public schools do not teach this. i teach at a high school in LAUSD. the economics that they teach at public schools is a complete sham. this includes ucla, berkeley, ucsd, rutgers and other public schools. ive talked to many friends who majored in economics at those schools and they have no idea what causes booms and busts and what role the federal reserve has or when it was even created.
Posted By: genecat @ 04/24/2008 1:56:40 AM

Comment: It is inverted that Ms. Napoleoni identifies "black markets" as the issue and that our financial troubles result from "rogue" economics. Here is the short on how it works: Central banks cannot bring economies into equilibrium under the best of conditions, let alone under periods of extreme intervention. Black markets react quickly to disruptions in supply and demand and are much more efficient in redistributing the current concentrations of wealth. Liberalization is a function of relaxing (or removing) cultural norms to allow for new job creation - if we had more time and money to train former soviet citizens to provide the quirky subset of legitimate western needs, then yes, they would not have to resort to selling sex to feed families. But, for a host of good reasons that won't be detailed here, that isn't going to happen. The argument is rather that markets form in response to supply and demand - to characterize them as "criminal' is to confuse effect for cause. Bottom line: the status quo has been a poor steward of the world's financial system, so in response, the world is changing. Its scholarly advocates, like Ms.Napoleoni, are promoting misguided but competitive arguments effectively winning over the simple minded and forcing the world's true intellectuals into becoming comedians.
Posted By: Medge @ 04/23/2008 10:24:52 PM

Comment: Loretta Napoleoni's book "Rogue Economics: Capitalism's New Reality," appears to be the twin brother of Naomi Klein's book, "The Shock Doctrine, the Rise of Disaster Capitalism. Both expose forms of economic gansterism. "Rogue Economics" addresses the excesses of globalization and its reliance on the absence of regulatory laws (or deregulation) that allow unscrupulous "businessmen" to use trade in the most despicable, unethical and crorrupt way they could think of, including violations of international laws and child
pornography.

In a similar manner, Naomi Klein in her book exposes that "disaster capitalism", thrives on natural and man-mde disasters. Natural disasters like Katrina in New Orleans and the tsunami in Sri Lanka are but two examples in which the corporatists have taken over. For this they need the backing of dictatorships, like the one in Sri Lanka or corruipt government like the Bush Administration. In Sri Lanka they took over the prime real estate beach fronts to build swanky hotels for the tourist industry, befoe the fishermen could recover from the shock of the Tsunami, to claim their property back. The same thing happened in New Orleans after Katrina.
In Iraq, it was a man-made disaster, "Shock and Awe." The city was destroyed and the contractors and developers were allowed to come in and parceled out the city among themselves. There are more contractors in Iraq than soldiers. Halliburton leads the gang.
"Fear and disorder, are the catalysts for disaster capitalists to leap forward". Notice the verb "leap"--as in, a ferocious beast leaps on its prey.
- Posted By: Braes @ 04/26/2008 18:07:02
  
  Comment: While your reply may be posted repetitively, I think it should be read repetitively. I have read neither book. I am off to go get them..
Posted By: Medge @ 04/23/2008 10:24:36 PM

Comment: Loretta Napoleoni's book "Rogue Economics: Capitalism's New Reality," appears to be the twin brother of Naomi Klein's book, "The Shock Doctrine, the Rise of Disaster Capitalism. Both expose forms of economic gansterism. "Rogue Economics" addresses the excesses of globalization and its reliance on the absence of regulatory laws (or deregulation) that allow unscrupulous "businessmen" to use trade in the most despicable, unethical and crorrupt way they could think of, including violations of international laws and child
pornography.

In a similar manner, Naomi Klein in her book exposes that "disaster capitalism", thrives on natural and man-mde disasters. Natural disasters like Katrina in New Orleans and the tsunami in Sri Lanka are but two examples in which the corporatists have taken over. For this they need the backing of dictatorships, like the one in Sri Lanka or corruipt government like the Bush Administration. In Sri Lanka they took over the prime real estate beach fronts to build swanky hotels for the tourist industry, befoe the fishermen could recover from the shock of the Tsunami, to claim their property back. The same thing happened in New Orleans after Katrina.
In Iraq, it was a man-made disaster, "Shock and Awe." The city was destroyed and the contractors and developers were allowed to come in and parceled out the city among themselves. There are more contractors in Iraq than soldiers. Halliburton leads the gang.
"Fear and disorder, are the catalysts for disaster capitalists to leap forward". Notice the verb "leap"--as in, a ferocious beast leaps on its prey.
Posted By: Medge @ 04/23/2008 10:24:25 PM

Comment: Loretta Napoleoni's book "Rogue Economics: Capitalism's New Reality," appears to be the twin brother of Naomi Klein's book, "The Shock Doctrine, the Rise of Disaster Capitalism. Both expose forms of economic gansterism. "Rogue Economics" addresses the excesses of globalization and its reliance on the absence of regulatory laws (or deregulation) that allow unscrupulous "businessmen" to use trade in the most despicable, unethical and crorrupt way they could think of, including violations of international laws and child
pornography.

In a similar manner, Naomi Klein in her book exposes that "disaster capitalism", thrives on natural and man-mde disasters. Natural disasters like Katrina in New Orleans and the tsunami in Sri Lanka are but two examples in which the corporatists have taken over. For this they need the backing of dictatorships, like the one in Sri Lanka or corruipt government like the Bush Administration. In Sri Lanka they took over the prime real estate beach fronts to build swanky hotels for the tourist industry, befoe the fishermen could recover from the shock of the Tsunami, to claim their property back. The same thing happened in New Orleans after Katrina.
In Iraq, it was a man-made disaster, "Shock and Awe." The city was destroyed and the contractors and developers were allowed to come in and parceled out the city among themselves. There are more contractors in Iraq than soldiers. Halliburton leads the gang.
"Fear and disorder, are the catalysts for disaster capitalists to leap forward". Notice the verb "leap"--as in, a ferocious beast leaps on its prey.
Posted By: Medge @ 04/23/2008 10:24:16 PM

Comment: Loretta Napoleoni's book "Rogue Economics: Capitalism's New Reality," appears to be the twin brother of Naomi Klein's book, "The Shock Doctrine, the Rise of Disaster Capitalism. Both expose forms of economic gansterism. "Rogue Economics" addresses the excesses of globalization and its reliance on the absence of regulatory laws (or deregulation) that allow unscrupulous "businessmen" to use trade in the most despicable, unethical and crorrupt way they could think of, including violations of international laws and child
pornography.

In a similar manner, Naomi Klein in her book exposes that "disaster capitalism", thrives on natural and man-mde disasters. Natural disasters like Katrina in New Orleans and the tsunami in Sri Lanka are but two examples in which the corporatists have taken over. For this they need the backing of dictatorships, like the one in Sri Lanka or corruipt government like the Bush Administration. In Sri Lanka they took over the prime real estate beach fronts to build swanky hotels for the tourist industry, befoe the fishermen could recover from the shock of the Tsunami, to claim their property back. The same thing happened in New Orleans after Katrina.
In Iraq, it was a man-made disaster, "Shock and Awe." The city was destroyed and the contractors and developers were allowed to come in and parceled out the city among themselves. There are more contractors in Iraq than soldiers. Halliburton leads the gang.
"Fear and disorder, are the catalysts for disaster capitalists to leap forward". Notice the verb "leap"--as in, a ferocious beast leaps on its prey.
Posted By: Medge @ 04/23/2008 10:00:57 PM

Comment: Loretta Napoleoni's book "Rogue Economics: Capitalism's New Reality," appears to be the twin brother of Naomi Klein's book, "The Shock Doctrine, the Rise of Disaster Capitalism. Both expose forms of economic gansterism. "Rogue Economics" addresses the excesses of globalization and its reliance on the absence of regulatory laws (or deregulation) that allow unscrupulous "businessmen" to use trade in the most despicable, unethical and crorrupt way they could think of, including violations of international laws and child
pornography.

In a similar manner, Naomi Klein in her book exposes that "disaster capitalism", thrives on natural and man-mde disasters. Natural disasters like Katrina in New Orleans and the tsunami in Sri Lanka are but two examples in which the corporatists have taken over. For this they need the backing of dictatorships, like the one in Sri Lanka or corruipt government like the Bush Administration. In Sri Lanka they took over the prime real estate beach fronts to build swanky hotels for the tourist industry, befoe the fishermen could recover from the shock of the Tsunami, to claim their property back. The same thing happened in New Orleans after Katrina.
In Iraq, it was a man-made disaster, "Shock and Awe." The city was destroyed and the contractors and developers were allowed to come in and parceled out the city among themselves. There are more contractors in Iraq than soldiers. Halliburton leads the gang.
"Fear and disorder, are the catalysts for disaster capitalists to leap forward". Notice the verb "leap"--as in, a ferocious beast leaps on its prey.
Posted By: olderwiser @ 04/23/2008 9:09:25 PM

Comment: The central bankers were just trying to postpone our pain. The longer they postpone it, the greater the pain will be. Methinks that they are trying to pass it on to someone else to make it look like someone else screwed up the works.
Posted By: olderwiser @ 04/23/2008 9:05:56 PM

Comment: The deregulation of most everything opened the door. Bundling up mortgages with high percentages of high risk borrowers and selling them afar to make a profit at the expense of those who thought that we did reliable business did us a lot of damage. Charging very high rates of interest on credit cards in order to expand the number of borrowers to make a profit. Shame. Enron dealings. Mercy. It's everywhere. You had a chance and you blew it. You will have to be regulated and don't scream so loud next time about government regulation. You can't be honest without it.
Posted By: expatincebu @ 04/23/2008 7:06:35 PM

Comment: Just more stupid journalism. The credit crunch has occurred for one reason only, the Federal Reserve put interest rates blow the rate of inflation igniting asset bubbles first in stocks and then in real estate. This alone is all that was needed but combined with total deregulation of financial institutions and you have our current meltdown. Nothing to do with crime, other than that of the central bankers of our own country who should all be lynched.
Posted By: Braes @ 04/23/2008 3:22:06 PM

Comment: The Cold War had no Marshall Plan. Only Germany had a plan to integrate its east. In our Markets, we have funds designed to destroy for profit, buying up competitive products and patents to protect inferior offerings with current market share. (See Cobasys being owned by Chevron, taking a good vehicle battery off the market)
As for a US turn around, it will begin with the Anti-Trust stick being whipped on the major oil monopolies.