Episode MMDXXIV of The American Political Melodrama: Robert Zoellick defends ‘Liberty’, ‘Open Doors’ & America as the indispensable nation, a comment by Old Socialist

Headline: With Trump, the US foreign policy framework is at risk

Sub-headline: America has been a voice for liberty, open doors and leader of the free world

The estimable Mr. Zoellick appears regularly in the pages of The Financial Times, in this instance , as defender/advocate for ‘Liberty’ and ‘Open Doors’ and America as indispensable. In breathless tones Mr. Zoellick  constructs a nearly perfect political melodrama, in which no political cliche masquerading as American History , television style, is almost brought to life, for the black and white 21 inch world of 1959!

Some pre-World Bank political/economic advocacy of Mr. Zoellick’s past, may interest the more astute, curious reader: who should direct their attention to Gavan McCormick’s essay ‘Koizumi’s Coup’ in the New Left Review 35, September-October 2005, as uncomfortable as that may be, for the diehard Capitalist Class of readers, for a collection of insights into Mr. Zoellick not as advocate for  ‘Liberty’  and  ‘Freedom’ but as Neo-Liberal political actor and Capitalist Bureaucrat: president of the World Bank from 2007 to 2012.

‘The office of the us Trade Representative has played an active part in drafting the Japan Post privatization law. An October 2004 letter from Robert Zoellick to Japan’s Finance Minister Takenaka Heizo, tabled in the Diet on 2 August 2005, included a handwritten note from Zoellick commending Takenaka for the splendid job he was doing. Challenged to explain this apparent us government intervention in a sensitive domestic matter, Koizumi merely expressed his satisfaction that Takenaka had been befriended by such an important figure. When Bush raised the Postal Savings System with him in New York in September 2004, Koizumi is said to have replied: ‘Shikkari yatte ikitai—I will do my utmost’. It was tantamount to an absolute commitment, and the President duly expressed his satisfaction.

It is hard to overestimate the scale of the opportunity offered to us and global finance capital by the privatization of the Postal Savings System. Its aim, as the Japan External Trade Organization puts it, is

to develop a banking and business culture that can efficiently allocate capital according to market mechanisms and the basic tenets of modern credit analysis . . . It marks a definitive shift from an approach that relied upon allocated government funding to an autonomous and flexible system based on market principles. [4]

‘Privatization would lead to the development of ‘more sophisticated and efficient financial and capital markets’, as Japanese savings were directed into the private sector. As a result, jetro hopes that households will become ‘far more receptive to a wider range of investment instruments’. At that point, ‘Huge amounts of pent-up household capital would be moved into private financial markets’. In the us, about 50 per cent of the population are share-owners, and 36 per cent trade them; the respective figures for Japan’s 127-million-strong population are 10 and 3 per cent. ‘It’s a big space for us to grow into’, as one broker puts it.

The pss has long been the main—undemanding—customer for Japanese Government Bonds. Privatization would break this link, and the private and overseas investors who would henceforth be the main bond purchasers would have the virtue, jetro suggests, of subjecting state expenditure to more rigorous disciplines. Foreign investors:

are less likely to be forgiving about chronic budget deficits. They will also need to perceive a risk–reward ratio that effectively balances the ability of jgbs to provide stability, liquidity, diversification and Yen exposure with the interest rate offered. This transition will be difficult and the resulting upward pressure on interest rates does hold the potential to slow down economic recovery in Japan.

The implication, then, is a prolongation of high unemployment levels and a further deterioration of the social fabric, while rising interest rates compound the crisis of Japan’s fiscal deficit. By way of reassurance, jetro cites a study by Christian Broda of the New York Federal Reserve and David Weinstein of Columbia University which argues that, given the 2017 deadline, Japan’s government officials ‘have ample time and latitude to meet their obligations via higher taxes or reduced benefits and services’. [5]

None of these issues were publicly argued during the election campaign. Nor was there any serious scrutiny of the implications of Japan Post privatization for the future of postal delivery and local branches, especially those in remote regions which often serve as a focus for social services. Under the proposed legislation, once the functions are separated into four discrete companies in 2007, employees will lose their civil-servant status and branches will have to operate according to market principles. The role of the Postal Savings System in providing back-up for the innumerable family shops and small businesses that still form the backbone of a distinctively Japanese daily life was also ignored; they are likely to be obliterated once local savings are invested according to the dictates of global capital.

https://newleftreview.org/II/35/gavan-mccormack-koizumi-s-coup

Mr. Zoellick is not a defender of ‘Liberty’ or ‘Freedom’ for all, but for a special class of political actors, entrepreneurs,  who destroy public institutions under the banner of ‘reform’, allied to political mendacity and duplicity as strategic tools: that places profit above the public good, the raison d’etre of the Neo-Liberalism of the Hayek/Mises/Friedman troika. The collapse of that Neo-Liberal practice, as it ramified over time, ushered in the Republican political nihilism, after the Obama victory in 2008. Which was predicated on an ersatz  Hope and Change, and the subsequent appearance of the Tea Party  Jacobins, that were the immediate precursors of Trump, and his base in an exhumed Know-Nothing politics.

Old Socialist

https://www.ft.com/content/e6112b5c-c159-11e6-81c2-f57d90f6741a#comments

 

 

 

 

 

About stephenkmacksd

Rootless cosmopolitan,down at heels intellectual;would be writer.
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