By Johan Galtung
Washington, DC
The Big View is the West doing badly, euro and pound down with miserable growth rates; US $-growth rate better but erratic; China, India, Islam growing, Latin America (CELAC) getting its act together and probably growing. This matters for essentially bankrupt USA: China, India, Islam, CELAC are huge powers with huge minorities inside the USA: they could move in, take over. Last week’s prediction about Trump’s foreign policy came true the next day (Washington Post 22 Mar 2016): less wars, not affordable, less NATO, let Europe do it, no nation-building, building our own. He was then branded “isolationist” with US incapacity for a third option: foreign policy by peacefare.
Diagnosis
Any economy has two key faultlines: high vs low class, with inequality by exploitation; real vs finance economy, with crises by speculation. LEAP Press Review (noreply@leap2020.net 17 Feb 2016) traces “something Big was about to happen” to February 2006: no more M3 published (money printing); Iran’ stock market based on the euro, Iraq following (invasion). Before that, the Rest manufacturing, beating the West. Slow in coming, but then quickly; leaving the USA with agriculture and speculation, maybe to be followed by a Brexit UK.
Martin Wolf (Financial Times, english@other-news.info 24 Feb 2016) points to the world exhausting “monetary policy 1,2”-lower interest, printing money-and calls for nº 3: more spending, less saving to beat the “chronic demand crisis”. A non-starter: given the inequalities and crises, people will save for worse to come and for their children, not spend unnecessarily, and not accumulate debts to their children.
Joseph Stiglitz (above) puts it this way: “Banks choose financial speculation over lending /for/ economic growth”. The money supply “stimulated sharp increases in-financial-sector profitability”.
Rune Skarstein, the leading Norwegian global economist, focuses on the slipping locomotive effect from the Chinese economy;Read More »



