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Competition in Ignominy

Posted on Mar 2, 2010

By William Pfaff

DOHA, Qatar—On my flight to Doha, where money doesn’t seem to be a problem, I read in London’s Guardian about the vultures making serious money out of the poorest national economies in the current international crisis.

They buy debt from very poor countries in the expectation that generalized debt relief will eventually be organized by the international community. These speculators then elude such debt settlements through various subterfuges, mainly by reassigning the debt, and the nominal end-holder subsequently sues in a friendly court in the United States or Britain to recover the full value of the original debt, or to seize poor-country assets.

Liberia’s president, Ellen Johnson Sirleaf, last week asked British parliamentarians to back legislation to block a 20 million pound judgment, handed down in London in 2009, that favored American investors alleged by the BBC to have subverted the debt-relief process. The investors allowed Liberian debt-relief negotiations to proceed while transferring their own debt holdings to companies that then successfully sued under British law to obtain substantially more than had been accepted in settlement by 97 percent of the other international creditors.

Such people would seem to be members of the lowest order of present-day necrophagic speculation, were that category not already overcrowded by mortgage-scam operators, real estate salesmen and brokers, and debt repackagers in the great globalized free market who in recent years managed to turn home mortgage rip-offs to the poor in America into an international crisis unforeseen by either the former financial masters of the universe or the world’s central bankers.

The competition in ignominy remains keen. The players include the financiers who buy credit default swaps to profit from the national debt crises they are striving to provoke. But such merely are everyday Wall Street or City of London gentlemen looking to finance their sons at Eton or Groton, and their second wives’ shopping.


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There is a lot of money to be made by big international banks in impoverished small, and even medium-size, countries in times of world crisis. Let the Greek government of George Papandreou tell you about that. The conservative government that preceded his in Athens was advised by Goldman Sachs on using credit default swaps to disguise Greece’s national debt from European Union auditors. Traders now are speculating against the Greek economy and the euro.

U.S. Federal Reserve Chairman Ben S. Bernanke said last Thursday that the Fed will be examining these controversial credit default swaps. Gretchen Morgenson writes in The New York Times that Bernanke’s use of the word counterproductive about “the use of credit default swaps to crash an institution or a nation” sounds a trifle naive. It’s as if the Fed’s view of a bank’s betting against a client might disqualify the bank’s officers from the better sort of club. It doesn’t seem to. But perhaps the better sort of clubs no longer exists.

What about the people who are not running scams but furnished the brainpower for the system itself, and even now at the IMF and the European Central Bank are promoting lower wages and higher taxes?

An obvious problem in the United States is that it has so thoroughly outsourced its job creating and manufacturing, and mismanaged what was left, that there are practically no good jobs left in the country. This is the result of frivolous economic futurology in the 1960s and 1970s.

One of the big problems in Greece (and Italy and Spain) is that much of the GDP is on the black economy and untaxed. This is the result of wars, generations of inefficient or bad government, and national insecurity (the extended family has to look after you because the state is corrupt or can’t be counted on). The cause of this is history. What remedy does the IMF have for that?

There is something very strange when international authorities advise governments that they must practice stimulus and austerity both, and recommend lean labor forces, postponed pensions for workers and cuts in state health expenditure, while announcing there can be no economic recovery until the consumer begins to spend more money.

How does the consumer consume when he or she has no money, and sees little prospect for things getting better? This is monetarist economic ideology still at work in governments. Some American blogger suggested back when the crisis was starting that governments just hand out cash to families, rather than to banks. That probably would have worked.

Visit William Pfaff’s website at

© 2010 Tribune Media Services Inc.

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By copernicist, March 7, 2010 at 6:18 am Link to this comment

Re gerard at 12:54 AM, 7 March: point taken. A comma in right place – between “market” and “who”, would not have been wasted. One of the problems with English, being minimally inflected, is the ability of pronouns to get lost in the thicket of under-punctuated sub-thoughts. As you know, Mr Pffaf lives in Paris, where stopping for breath in the midst of a trope is nearly unthinkable.
Not trying to get side-tracked, but is it Faulkner’s occasionally never-ending sentences – all I was referring to – or his content, that you despise? 
As for Hrabal, a great Czech writer (1914-1997), I thought it possible his exuberant sense of humour might appeal to you.  But I agree, one can’t read everything in a bookworm lifetime: not even my late wife could manage it. I’m not suggesting you try.

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By gerard, March 6, 2010 at 8:54 pm Link to this comment

Re:  Faulkner and that other guy:  I despise Faulkner.  The other guy I haven’t heard of.  Can’t read everything in one lifetime. Don’t know about you, but I needed a deep breath along about ...“debt repackagers in the great globalized free market who in recent years managed ...”  Wheweee! It was along about there that the pronouns stopped relating and the financial masters of the universe began butting heads with the world’s central bankers.  I ducked out for safety.

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By LocalHero, March 4, 2010 at 9:19 pm Link to this comment
(Unregistered commenter)

Mr Pfaff, You can’t possibly believe that the crisis was “unforeseen by either the former financial masters of the universe or the world’s central bankers.”

To the contrary. It was just another of their carefully organized events made to appear, from the outside, like random chaos. They’ve been doing it for centuries - yet you still haven’t caught on.

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By TAO Walker, March 4, 2010 at 2:41 pm Link to this comment

“....your huddled masses” have certainly come by their own institutionalized ignorance (about the make-believe world-o’-hurt they’re trapped-in) honestly enough.  So their noisy alarm (already verging-on or even well-into panic in places) at the increasingly ‘in-your-face’ (and indecent) exposures of the truly ugly ruthlessness of “civilization” and its cannibalistic eCONomic ‘operating system’ is hardly surprising….to this Old Savage anyhow.

What is a little, though, at-least here in Indian Country, is the cockamamie belief still rampant among the plutoligarchy and their professional retainers that the damn thing will stop somehow short of devouring theirownselfs….that if they can just shovel enough ‘others’ into its voracious maw first, it will be satisfied at-last and submit finally to their “management.”  Talk about your sucker-bets, eh?

The “global” money-mongers can’t print the stuff fast enough anymore.  The (by some reckonings) quadrillion-dollar (and growing) black-hole at the rotten core of this inevitable “financial collapse” is sucking “money” into its own never-never-(to-be-be-seen-again)-land beyond its perception-warping ‘event-horizon’ at virtual speeds now exceeding even those near-light velocities at which “information” itself hits The-Wall.  Those hapless Human “individuals” who cling witlessly to the toxic, corrosive, and habit-forming “substance” that IS “money,” are in-for some terrifying times….and they’ve already begun.

It really is “your money or your life,” tame Sisters and Brothers….perishing alone in a disintegrating death-dealing illusion or Living together in the Vision of our Mother earth.


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By copernicist, March 3, 2010 at 5:11 pm Link to this comment

Really, gerard:, that Pffafian sentence ruffling your feather, though perhaps not succinct, is perfectly comprehensible and rather accurate, which someone as perceptive as you usually are must surely recognize is what counts. Indeed, given the grim denouements this posting foresees,  a dose of emotive expression – if that is the offending aspect   – should,, as the saying used to go,  Be Our Biggest Problem.
Breathless? Have you tried Faulkner, or Bohumil Hrabal?

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By Vic Anderson, March 3, 2010 at 4:18 pm Link to this comment
(Unregistered commenter)

No $, only S’ in who actually works, as well as in actual progress.

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By gerard, March 3, 2010 at 2:30 pm Link to this comment

Mr. Pfaff:  Please don’t write breathless sentences like this one:

“Such people would seem to be members of the lowest order of present-day necrophagic speculation, were that category not already overcrowded by mortgage-scam operators, real estate salesmen and brokers, and debt repackagers in the great globalized free market who in recent years managed to turn home mortgage rip-offs to the poor in America into an international crisis unforeseen by either the former financial masters of the universe or the world’s central bankers.”


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oldog's avatar

By oldog, March 3, 2010 at 10:56 am Link to this comment

Why do foolish citizens keep re-electing senators and
congressmen/women who give our national resources to
big business?

All of the wealth of this country has been sold at
rock bottom prices to international corporations and foreign countries who owe no allegiance to US
interests. We the citizens do not own property, we
own debt because the government (supposedly OUR
representative) need millions in corporate campaign
contributions to get elected.

While corporate-owned entertainment outlets (i.e.
mainstream media) distract us with social gadflies
like abortion and immigration, our income tax revenues subsidize the rape of our country.

Democracy only works when you have an enlightened

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