Radhika Desai:
Discuss both the international and domestic dimensions of the increasingly divergent strategies represented by the two parts of the world, the NATO and US Le West on the one hand and the world majority which now includes one would imagine the overwhelming majority of the ordinary people of the western world who do not wish to purse this militaristic and war like line, they would rather have a policy which is more in line with other Countries, who are pursing in favour of development.
Two alternatives, the first represents both economic and military and the second represents development.
Let's start the discussion with a couple of instances of economic self-harm we are seeing in Western Countries.
Micheal Hudson:
The main strains are financial right now, not only financial but the particular way in which the US centered neoliberal order that was put in place in 1945 has now reached its limit and you're seeing that in the crisis and it's largely a balance of payments crisis in Germany and Argentina connected to the budget deficits all that with a kind of neoliberal junk economics that is frozen spending in Germany to prevent Germany from essentially using Public Funding to get over the depression that it's created by declaring war on Russia and it looks like China too. The fact its middle class and labor class are being squeezed, just as they're being squeezed in Argentina, so I think underlying both countries, their balance of payments deficit is a kind of false view of what cause inflation. What is causing inflation its not that the United States has blown up Nord stream, it's not that energy prices have gone up, it's not that food prices have gone up, it's because we're running a deficit that too much social spending, the only cause that the Germans realise except for inflation is government money creation, but that's not the case, every hyperinflation in history such as we're seeing in Argentina now whose prices have gone up 140% in the last year, every hyperinflation has come from the currency depreciation, from the balance of payments deficit. Germany now that is deindustrialising now that it cannot import affordable gas and oil to run its industry all of a sudden this anchor of the Euro's exchange rate has turned into a deficit meaning the euro is looking like its on the downside, the reality back in the 1920's is Germany had to pay reparations the payment of reparations caused the currency to plunge, when a currency goes down as Germany's did and Argentina's today the price of imports go up and the price of imports go up, increase the domestic price of food, the domestic price of doing business and so the government then has to create more money to enable these transactions of the economy to take place at higher price level in every case, the hyperinflation and even regular inflations are led by the balance of payments deficit, followed by a declining exchange rate followed by increasing import prices and domestic prices and then at the very end money creation increases, just the opposite. When you have a false view of what causes inflation for the last hundred years ever since the 1920's it's not a mistake, it's because there is a social interest in having a wrong view, the social interest is to essentially squeeze government and essentially privatise everything.
What we are seeing in Australia now in Argentina now, is that the incoming Mr Miley is trying to create a new government, he's dropped the idea of dollarisation but he says there's a simple way to stablise Argentina's balance of payments and its exactly what Argentina did in 1991 and that is to sell off the public domain, Argentina was able to stablise its exchange rate by selling its banks, selling its natural resources, selling its public utilities, Miley says we can raise the exchange rate once again and stop the depreciation if we just sell off everything, sell off our streets, sell off our land, sell off whatever natural resources we have and we're going to have an influx of foreign money coming in and that foreign money is going to buy up our government, what we see off from the government and that will stop the inflation and now middle class and working class people can somehow survive and of course the problem with this is once you privatise the public domain the private owners are now going to raise the prices for public services, they're going to turn government infrastructure into monopolies and extract monopoly rent and all of this rent is then going to be remitted to their own countries abroad and most foreigners in Argentina are Argentinean the 50 families that run the economy operating out of offshore Bing centers the Dutch West Indies, the United States, London and so they are pretending to be foreigners so you're having a huge privatisation and the squeeze of the middle class and the working class.