America’s Pacific Century?: APEC Summit in Hawaii Seeks to Implement Free Trade Agreement of the Asia Pacific Region by Tina Gerhardt /CommonDreams.org

Published on Friday, November 11, 2011 by CommonDreams.org

America’s Pacific Century?: APEC Summit in Hawaii Seeks to Implement Free Trade Agreement of the Asia Pacific Region

by Tina Gerhardt

HONOLULU, Hawai’i -- As international attention focuses on the economic situation of the EU - the rollercoaster political-economic ride of events unfolding in Greece and Italy and the G20 summit in Cannes - and domestic attention focuses on the Occupy Wall Street movement and the XL Keystone Pipeline protests, President Obama shifts gears this week to the Asia Pacific region.
On Tuesday, the Asia Pacific Economic Cooperation (APEC) summit kicked off in Honolulu, Hawai’i.
Running through Sunday, November 13, the summit brings together 21 Pacific Rim economies.
Established in 1989, in the face of the perceived collapse of communism, APEC seeks to promote free trade in the Asia Pacific region. In particular, the current APEC meeting seeks to pave the way for a Free Trade Agreement of the Asia Pacific (FTAAP) region.
In a talk given at the University of Hawai’i East-West Center today, Secretary of State Hillary Clinton referenced the importance of transatlantic systems for the 20^th-century. She stated “The 21^st-century will be America’s Pacific Century.”
The Asia Pacific region continues to increase in economic might -- witness China’s offer to bail out the EU a mere two weeks ago – President Obama is attune to these geopolitical shifts.
Together, the 21 member economies account for over half of global GDPs, purchase over half of US goods and form almost half of world trade.
Seven of the U.S.’s top 15 trade partners are located in the APEC region.
President Obama has sought agreements to benefit from the region since the very outset of his presidency.
A Harbinger of Things to Come: The Korea-US Free Trade Agreement (KORUS FTA)
On February 10, 2011, the United States and South Korea signed two agreements – amendments to the Korea U.S. Free Trade Agreement (KORUS FTA) ratified on June 30, 2007.
The agreements - the most significant the U.S. has signed in over 16 years, since the North America Free Trade Agreement (NAFTA) - reduce Korean tariffs on U.S. goods exported to Korea.
They were approved last month by Congress on October 12, 2011 and await the decision of the Korean National Assembly.
The Office of U.S. Trade Representative stated that “under the FTA, nearly 95% of bilateral trade in consumer and industrial products will become duty free within five years .. and most remaining tariffs would be eliminated within 10 years.”
Additionally, the KORUS FTA will also allow greater access to the Korean financial market.
“As the first U.S. FTA with a North Asian partner,” the Office of U.S. Trade Representative stated, “the KORUS FTA is a model for trade agreements for the rest of the region, and underscores the U.S. commitment to, and engagement in, the Asia-Pacific region.”
In other words, the KORUS FTA is a harbinger of possible things to come.
Christine Ahn, Executive Director of the Korea Policy Institute, stated that “the proposed KORUS FTA undermines South Korean democracy in significant ways: it undermines approximately 180 South Korean laws.”
“In particular,” Ahn continued, “the KORUS FTA has two really negative effects: first in the pharmaceutical industry and second in the agricultural arena. Korea has a universal health care system. While it is not like Sweden’s healthcare system, it does provide basic care for everybody. As part of it, Korea has a strong generic pharmaceutical industry. Concerns abound that the KORUS FTA would drive up costs so much, that universal healthcare would be untenable and Korean health care would essentially be privatized.”
“The FTA would also negatively impact agriculture,” Ahn stated, “As anyone who has been following the World Trade Organization knows, Korean farmers have already been intensely affected by their policies.” At the 2003 WTO meeting in Cancún, Korean farmer Lee Kyung-Hae committed suicide at the frontline barricades to underscore the desperate situation of Korean farmers.
“The KORUS FTA would deepen this impact,” Ahn stated. “According to the Korean government’s own figures, 45% of Korean farmers would be displaced from their farms because they would not be able to compete with the U.S. subsidized agricultural industry. We have already seen this type of effect of FTAs in Mexico under NAFTA.”
If the KORUS FTA is a sign of possible things to come, so, too, are the uprisings against it. Historian and political scientist George Katsiaficas states in his forthcoming book Asia’s Unknown Uprisings: “massive protests took place against the [KORUS] FTA in December 2006” and “polls showed over half of all Koreans opposed the agreement.”
Connecting the Dots: Australia-US FTA
Like the KORUS FTA, the U.S.-Australia Free Trade Agreement was passed before Obama took office but augmented during his tenure, and again, with the intention to increase free trade in the Pacific region.
Passed on January 1, 2005, the FTA was intensified in 2009, when working groups were established to facilitate agricultural trade.
President Obama is scheduled to travel from the APEC summit – first to the East Asia summit in Bali, Indonesia then - on to Australia, in order to discuss not only aspects of the trade agreement but also the establishment of military bases, in a further sign of geopolitical shifts.
Announcing the U.S.-Australia FTA, the Office of the U.S. Trade Representative laid bare the relationship between these bilateral and planned multilateral agreements, as it continued on to state: “in September 2008, the United States announced its intention to begin negotiations to join the Trans-Pacific Strategic Economic Partnership agreement” also known as the Trans-Pacific Partnership (TPP).
Trans-Pacific Partnership
President Obama, during his first visit to Asia in November, 2009, underscored his commitment to the Trans-Pacific Partnership (TPP), a multilateral free trade agreement seeking to liberalize the economies of the Asia-Pacific region or “to serve as a vehicle for Trans-Pacific economic integration.”
In a letter sent to Congress on December 14, 2009, Ron Kirk, U.S. Trade Representative, stated that President Obama joined the TPP “with the objective of shaping a high-standard, broad-based regional pact.”
While the TPP is not an official part of APEC, its meetings and negotiations have taken place parallel to the APEC summits since 2002.
Emissaries for Corporations
In the eyes of APEC critics, the summit has governments acting as emissaries for corporations, drawing up agreements that benefit big business but not small, independent businesses.
Tuesday, finance ministers met to discuss regional financial issues. And CEOs met in the APEC Business Advisory Council (ABAC). The 63 member council, which includes up to three business representatives for each of the 21 member economies, has drawn up a list of recommendations to present to heads of state, in order to improve trade in the Pacific region.
These suggestions include removing tariff barriers and reducing regulatory barriers to trade. In particular, the U.S. would like tariffs on renewable energy components, such as solar panels and wind turbines, to be reduced.
Today through Saturday, a CEO summit talks place in conjunction with APEC. It includes heads of state as well as at least 23 CEOs from companies such as Time Warner Cable, Sybase, DHL, COFCO, Bank of China, Boeing Company, Gazprom, Caterpillar, General Electric, Google, Lockheed Martin, Cathay Financial Holdings, and Johnson and Johnson.
A Free Trade Agreement of the Asia Pacific (FTAAP) Region?
APEC and the TPP seek to pave the way for a Free Trade Agreement of the Asia Pacific (FTAAP) region.
At its previous meeting, the TPP’s nine negotiating partners – four countries with which the U.S. has free trade deals, Australia, Chile, Peru and Singapore, as well as Brunei, Malaysia, New Zealand, and Vietnam - set themselves the goal of outlining an agreement by this week’s APEC meeting.
The first step could be to formalize the TPP as a regional trade agreement. Canada, Japan, the Philippines, South Korea and Taiwan have expressed interest in TPP membership.
Secretary of State Hillary Clinton will travel on from the APEC summit to the Philippines, Thailand and Indonesia – countries in the Asia Pacific region that have not yet signed on to the Trans-Pacific Partnership.
Japan’s Prime Minister Yoshihiko Noda is considering joining but its farmers are concerned that they will be devastated by the move. Like in South Korea, in Japan, memories of the financial crisis that effected much of southeast Asia beginning in 1997 linger. Noda intends to announce his decision Friday.
The talks face a further and larger hurdle: the U.S. wants nations in the region, in particular China, to lower tariffs imposed on U.S. renewable energy products.

Tina Gerhardt is an independent journalist who covers climate change, international negotiations and energy policy. Her work has appeared in Common Dreams, Alternet, Grist, Environment News Service, In These Times, The Progressive and The Nation, on GRIT tv, WBAI and the National Radio Project.

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Video: Italy: Too Big to Bail Out? / Inside Story / Al Jazeera English / Common Dreams

Published on Friday, November 11, 2011 by Inside Story / Al Jazeera English

Italy: Too Big to Bail Out?

As the debt crisis in Italy is sending shock waves across Europe, we ask if radical change is the only way forward.

Over the past two years, economic crisis has hit Greece, Ireland, Portugal, and Spain.
This time the country in the firing line is Italy, the third largest economy in the eurozone. It may now need a bailout, but its debts are more than those of Greece, Ireland, Portugal and Spain combined: a total of a staggering $2.6 trillion.
If Italy needs a bailout, where is the money going to come from? Is the tipping point for the whole eurozone now close at hand? Is radical change the only way forward? And will a change of leadership make any difference?
Inside Story, with presenter James Bays, discusses with Nicola Rossi, an economist and Senator in the Italian Parliament; Georgi Gotev, a senior editor of Euractiv, an online European news service; and Adam Myers, a senior market strategist for the French Bank, Credit Agricole.
"There are significant debts, and whether we are talking about the leadership in Greece or the leadership in Italy, the underline concern is still that the voters may not accept any decisions that are put in front of them in terms of austerity in any case. And of course, investors globally are aware of that and so even if issues are resolved in terms of leadership in both countries, it still does not mean that investors will not still take a very pessimistic view of the underline problem and that of course is those countries' indebtedness."
Adam Myers, Credit Agricole

© 2011 Aljazeera.net

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Roubini The Next MF Global Collapse Could Be Goldman Sachs / By Henry Blodget / ICH

Roubini The Next MF Global Collapse Could Be Goldman Sachs By Henry Blodget  November 08, 2011 "Business Insider" -- Nouriel Roubini was was in fine form yesterday, scaring the bejeezus out of his followers on Twitter by saying that several huge financial institutions could collapse in the blink of an eye like MF Global. These houses of cards, Roubini tweeted, include: Goldman Sachs Morgan Stanley Jefferies Barclays The problem, as Roubini has consistently warned, is the banks' dependence on short-term financing to maintain their long-term asset leverage and run their businesses. What killed MF Global, Lehman Brothers, Bear Stearns, AIG, and other huge financial firms, after all, was the sudden refusal of short-term lenders to continue lending money to the firms. Every day, the big Wall Street firms borrow tens of billions of dollars in low-cost short-term loans. They then use this money to make long-term bets on assets that yield more than the money costs to borrow. And then they happily keep the difference between the two. In good times, the banks come to take this funding for granted: They just keep rolling over their huge debts every day, repaying the old loans with the money from new ones. When the overnight lenders suddenly get suspicious and the money disappears, however, it's as if the oxygen is suddenly sucked out of the room. In additional tweets, Roubini argued that JP Morgan and Citigroup were actually less at risk because more of their funding comes from insured deposits. So that's some good news for you. Dan Freed of TheStreet has more on Roubini's tweeting. If you don't understand this short-term funding dynamic, and the enormous risks it creates, read this excellent William Cohan article on how Jon Corzine just flew MF Global into a mountain.

MF Signs Death Warrant for Short-Term Funding: William D. Cohan / Bloomberg

Bloomberg

MF Signs Death Warrant for Short-Term Funding: William D. Cohan

November 10, 2011, 7:10 PM EST

More From Businessweek

• Financial Scandal Aficionados Never Had It Better: Jonathan Weil
• MF Global Trustee Explains Delay in Releasing Collateral
• Corzine Downfall Is Teachable Moment for Japan: William Pesek
• Europe Banks Selling Sovereign Bonds May Worsen Debt Crisis
• Others Pay Price for Corzine’s Risky Revenge: William D. Cohan

By William D. Cohan

Nov. 8 (Bloomberg) -- People ask me all the time: How could Wall Street powerhouses such as Bear Stearns Cos., Lehman Brothers Holdings Inc. and Merrill Lynch & Co. disappear virtually overnight?

How could MF Global Holdings Ltd. be here one day and gone the next? Why was Jefferies Group Inc., the midsized investment bank, whipsawed last week by rumors about its very survival because of questions about its exposure to European debt?

What the demise of Bear, Lehman, Merrill, MF Global -- and the near collapses of Jefferies, Goldman Sachs Group Inc. and Morgan Stanley (before the latter two became bank holding companies in September 2008) -- reveal in spades is that the age-old model by which these firms finance themselves is irreparably broken and should be outlawed.

MF Global found itself in financial peril so quickly because its short-term lenders decided almost overnight that they no longer wanted to take the risk of lending money to the firm. Jefferies faced the same situation -- even if it stanched the bleeding last week -- and it isn’t out of the woods. Both provide further evidence that the short-term funding model for securities firms needs to be ended because it’s simply too risky.

Before the recent financial crisis reached its most acute stages, beginning in March 2008, the dirty secret of securities firms was that without the ongoing financial support of their short-term lenders they couldn’t stay in business. In effect, the short-term lenders to firms such as Bear Stearns and Lehman had a free option -- every night -- about whether to continue doing business with them.

Lenders’ Support

Without the ongoing support of these lenders, the securities firms couldn’t stay open. One day the funding switch is on; the next day it’s off. Period.

For instance, Bear Stearns borrowed about $70 billion a day in the short-term -- so-called repo -- secured financing market. The cost was low, and the risks seemingly negligible. Who wouldn’t keep lending to Bear Stearns, especially with a secured interest in the financial assets -- such as Treasuries or mortgage-backed debt -- on the borrower’s balance sheet?

Or so the logic went before March 2008, when we discovered that without the $70 billion from the overnight lenders -- which was suddenly withheld -- Bear Stearns couldn’t continue as a going concern, even though it had $18 billion in cash on hand.

Admittedly, before Bear Stearns collapsed over the Ides of March more than three years ago, very few financial executives had any appreciation for this subtle funding dynamic. Yet nothing is more fundamental to most banks’ operational strategies than the ability to borrow short and lend long. Such backroom plumbing was thought best left to the firm’s repo desk and its treasurer, all blessed with a little oversight from the chief financial officer and other top executives.

Although it’s true that Wall Street firms rely on short- term financing to varying degrees, by March 2008, Bear Stearns was especially dependent on the overnight repo market because its other sources of liquidity had pretty much dried up. Goldman Sachs depended far less on short-term financing than did Bear or Lehman. That’s because the bank agreed to pay higher interest rates on its borrowings to ensure the money it needed to run its business -- despite having about $160 billion in cash -- would still be there from one day to the next.

Before Bear Stearns collapsed, most senior Wall Street executives would have never imagined that overnight lenders would decide to stop financing their business. But after Bear, then Lehman and Merrill Lynch, went down and was almost followed by Morgan Stanley and Goldman Sachs -- who were saved only by their immediate access to the Fed’s discount window, which made moot the question of where they would get short-term funding -- there could be no more credible excuses for not understanding the tenuousness of the funding model.

Risky Business

Indeed, no self-respecting Wall Street banker would ever advise a client to personally take such short-term financing risks. And yet the industry itself was doing this very thing.

That’s what makes the MF Global debacle so shocking. Jon Corzine, the firm’s former chairman and chief executive officer, had previously been CEO and CFO of Goldman Sachs. He understood exactly the fragile short-term funding dynamic of a securities firm.

His principal financial sponsor, the billionaire J. Christopher Flowers -- one of MF Global’s largest shareholders who installed Corzine as CEO in 2010 -- was a former financial institutions banker at Goldman Sachs.

Flowers made his fortune by buying and turning around a distressed Japanese bank. He also had a seat at the table during the collapses of Bear Stearns, Merrill and the rescue of American International Group Inc. Flowers knew exactly how fragile short-term funding could be. And yet both he and Corzine allowed MF Global to take the risk of financing a long-term bet -- its $6.3 billion gamble on European sovereign debt -- in the short-term markets.

MF Global even admitted in its financial statements that it was at risk if the ratings companies downgraded its debt. “Pursuant to its trading agreements with certain liquidity providers, if its credit rating falls, the amount of collateral” the company “is required to post may increase,” MF Global said in its 10Q disclosure for the second quarter of 2011. It also noted that its debt was rated investment-grade.

But once those ratings changed -- as they did in the firm’s final week -- les jeux sont faits and the gig was up.

Over the weekend, the Financial Times praised Corzine, claiming that he “arguably” deserved “some respect” for “thinking big.” This is pure bunk. All the mea culpas and excuses in the world won’t change the fact that Corzine and Flowers knew exactly the risks posed by the broken funding model relied on by companies such as MF and Jefferies.

They decided to take the risk anyway. As a consequence, about 3,000 MF Global employees will soon be out of work and billions of dollars belonging to creditors and shareholders has been lost.

Don’t worry about Corzine and Flowers, though, they still have their hundreds of millions of dollars in previous winnings socked away. Actually, come to think of it, they deserve to be locked up.

(William D. Cohan, a former investment banker and the author of “Money and Power: How Goldman Sachs Came to Rule the World,” is a Bloomberg View columnist. The opinions expressed are his own.)

--Editors: Max Berley, Stacey Shick
Click on “Send Comment” in sidebar display to send a letter to the editor.
To contact the writer of this article: William D. Cohan at wdcohan@yahoo.com.
To contact the editor responsible for this article: Max Berley at mberley@bloomberg.net.

Key Lesson from Iceland Crisis is 'Let Banks Fail' By Haukur Holm / ICH

Key Lesson from Iceland Crisis is 'Let Banks Fail'

By Haukur Holm

November 08, 2011 "AFP" -- Three years after Iceland's banks collapsed and the country teetered on the brink, its economy is recovering, proof that governments should let failing lenders go bust and protect taxpayers, analysts say.

The North Atlantic island saw its three biggest banks go belly-up in the October 2008 as its overstretched financial sector collapsed under the weight of the global crisis sparked by the crash of US investment giant Lehman Brothers.

The banks became insolvent within a matter of weeks and Reykjavik was forced to let them fail and seek a $2.25 billion bailout from the International Monetary Fund.

After three years of harsh austerity measures, the country's economy is now showing signs of health despite the current global financial and economic crisis that has Greece verging on default and other eurozone states under pressure.

"The lesson that could be learned from Iceland's way of handling its crisis is that it is important to shield taxpayers and government finances from bearing the cost of a financial crisis to the extent possible," Islandsbanki analyst Jon Bjarki Bentsson told AFP.

"Even if our way of dealing with the crisis was not by choice but due to the inability of the government to support the banks back in 2008 due to their size relative to the economy, this has turned out relatively well for us," Bentsson said.

Iceland's banking sector had assets worth 11 times the country's total gross domestic product (GDP) at their peak.

Nobel Prize-winning US economist Paul Krugman echoed Bentsson.

"Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually expanded its social safety net," he wrote in a recent commentary in the New York Times.

"Where everyone else was fixated on trying to placate international investors, Iceland imposed temporary controls on the movement of capital to give itself room to maneuver," he said.

During a visit to Reykjavik last week, Krugman also said Iceland has the krona to thank for its recovery, warning against the notion that adopting the euro can protect against economic imbalances.

"Iceland's economic rebound shows the advantages of being outside the euro. This notion that by joining the euro you would be safe would come as news to the Spaniards," he said, referring to one of the key eurozone states struggling to put its public finances in order.

Iceland's example cannot be directly compared to the dramatic problems currently seen in Greece or Italy, however.

"The big difference between Greece, Italy, etc at the moment and Iceland back in 2008 is that the latter was a banking crisis caused by the collapse of an oversized banking sector while the former is the result of a sovereign debt crisis that has spilled over into the European banking sector," Bentsson said.

"In Iceland, the government was actually in a sound position debt-wise before the crisis."

Iceland's former prime minister Geir Haarde, in power during the 2008 meltdown and currently facing trial over his handling of the crisis, has insisted his government did the right thing early on by letting the banks fail and making creditors carry the losses.

"We saved the country from going bankrupt," Haarde, 68, told AFP in an interview in July.

"That is evident if you look at our situation now and you compare it to Ireland or not to mention Greece," he said, adding that the two debt-wracked EU countries "made mistakes that we did not make ... We did not guarantee the external debts of the banking system."

Like Ireland and Latvia, also rescued by international bailout packages and now in recovery, Iceland implemented strict austerity measures and is now reaping the fruits of its efforts.

So much so that its central bank on Wednesday raised its key interest rate by a quarter point to 4.75 percent, in sharp contrast to most other developed countries which have slashed their borrowing costs amid the current crises.

It said economic growth in the first half of 2011 was 2.5 percent and was forecast to be just over 3.0 percent for the year as a whole.

David Stefansson, a research analyst at Arion Bank, told AFP Iceland hiked its rates because it "is in a different place in the economic (cycle) than other countries.

"The central bank thinks that other central banks in similar circumstances can afford to keep interest rates low, and even lower them, because expected inflation abroad is in general quite (a bit) lower," he said.

Lazy Ouzo-Swilling, Olive-Pit Spitting Greeks Or, How Goldman Sacked Greece By Greg Palast for In These Times

Lazy Ouzo-Swilling, Olive-Pit Spitting Greeks
Or, How Goldman Sacked Greece
By Greg Palast for In These Times
November 08, 2011 "Information Clearing House" -- Here's what we're told:Greece's economy blew apart because a bunch of olive-spitting, ouzo-guzzling, lazy-ass Greeks refuse to put in a full day's work, retire while they're still teenagers, pocket pensions fit for a pasha; and they've gone on a social-services spending spree using borrowed money. Now that the bill has come due and the Greeks have to pay with higher taxes and cuts in their big fat welfare state, they run riot, screaming in the streets, busting windows and burning banks.
I don't buy it. I don't buy it because of the document in my hand marked, "RESTRICTED DISTRIBUTION."
I'll cut to the indictment: Greece is a crime scene. The people are victims of a fraud, a scam, a hustle and a flim-flam. And––cover the children's ears when I say this––a bank named Goldman Sachs is holding the smoking gun.
In 2002, Goldman Sachs secretly bought up €2.3 billion in Greek government debt, converted it all into yen and dollars, then immediately sold it back to Greece.
Goldman took a huge loss on the trade.
Is Goldman that stupid?
Goldman is stupid—like a fox. The deal was a con, with Goldman making up a phony-baloney exchange rate for the transaction. Why?
Goldman had cut a secret deal with the Greek government in power then. Their game: to conceal a massive budget deficit. Goldman's fake loss was the Greek government's fake gain.
Goldman would get repayment of its “loss” from the government at loan-shark rates.
The point is, through this crazy and costly legerdemain, Greece's right-wing free-market government was able to pretend its deficits never exceeded 3 percent of GDP.
Cool. Fraudulent but cool.
But flim-flam isn’t cheap these days: On top of murderous interest payments, Goldman charged the Greeks over a quarter billion dollars in fees.
When the new Socialist government of George Papandreou came into office, they opened up the books and Goldman's bats flew out. Investors' went berserk, demanding monster interest rates to lend more money to roll over this debt.
Greece's panicked bondholders rushed to buy insurance against the nation going bankrupt. The price of the bond-bust insurance, called a credit default swap (or CDS), also shot through the roof. Who made a big pile selling the CDS insurance? Goldman.
And those rotting bags of CDS's sold by Goldman and others? Didn't they know they were handing their customers gold-painted turds?
That's Goldman's specialty. In 2007, at the same time banks were selling suspect CDS's and CDOs (packaged sub-prime mortgage securities), Goldman held a “net short” position against these securities. That is, Goldman was betting their financial "products" would end up in the toilet. Goldman picked up another half a billion dollars on their "net short" scam.
But, instead of cuffing Goldman's CEO Lloyd Blankfein and parading him in a cage through the streets of Athens, we have the victims of the frauds, the Greek people, blamed. Blamed and soaked for the cost of it. The "spread" on Greek bonds (the term used for the risk premium paid on Greece's corrupted debt) has now risen to — get ready for this––$14,000 per family per year.
Greg Palast is the author of Vultures' Picnic: In Pursuit of Petroleum Pigs, Power Pirates and High-Finance Carnivores, which will be released on November 14 by Penguin USA.

Occupy France: Calling for Change at the G20 Summit by Yifat Susskind / Common Dreams

Published on Wednesday, November 2, 2011 by CommonDreams.org

Occupy France: Calling for Change at the G20 Summit

by Yifat Susskind

This week marks the beginning of the G20 summit in Cannes, where representatives from the 20 richest countries will gather to discuss global economic policy. The G20 has been meeting since the late 1990s to respond to global financial crises. But the policies they espouse—from cutting back on government spending to deregulation—have only led to more poverty, inequality and instability.
Ahead of this week’s meetings, MADRE, an international women’s human rights organization, calls on the G20 states to take effective action to address financial crisis. One important step is to stabilize the market by creating a ‘Robin Hood’ tax on currency exchanges and financial transactions. MADRE stands with economic justice advocates worldwide in endorsing the call for such a tax.
In a global economy wracked by speculation and rapid-fire trading, the ‘Robin Hood’ tax would tame the profit-driven speculation that has made our world financial markets so volatile. It would curb short-sighted trading practices that move trillions of dollars each day, generating huge profits for a tiny few without reinvestment in social services, infrastructure and other necessities for the global 99 percent. By taxing these financial transactions, money could be funneled into critical social services such as health care and education.
The practices of traders and speculators in global markets have also turned basic rights like food, water, health care and education into commodities, pushing these resources out of reach for many of the world’s people. For example, this year’s famine in the Horn of Africa is in part the result of rampant speculation on grains—the world’s staple food.
Today, grassroots protests against economic injustice are growing around the world. The Occupy Wall Street movement was born in downtown New York City, but it has links that span geographies and time.
MADRE joins our allies worldwide in calling on the G20 to recognize the fundamental and unjust imbalances of the global economic system and endorse the creation of a ‘Robin Hood’ Tax.
Correction: This post was updated on 11/3 to reflect that the G20 meeting is being held in Cannes, not Paris.

Yifat Susskind is the Executive Director of MADRE. Before joining the staff of MADRE, she was part of a joint Israeli-Palestinian human rights organization in Jerusalem, using journalism, advocacy and political organizing in her work for peace. MADRE's mission is to advance women’s human rights by meeting immediate needs and building lasting solutions for communities in crisis