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More about Globalization, and other things

Your Humble Blogger just caught a bit in "Taming the phoenix? Monetary governance after the crisis", by Benjamin J. Cohen, in The Asian Financial Crisis and the Architecture of Global Finance, edited by Gregory W. Noble and John Ravenhill (© Cambridge University Press, 2000) that made me think.

"To Keynes, nothing was more damaging than the free movement of speculative capital... Keynes carefully distinguished between genuinely productive investment flows and footloose 'floating funds'."

Once again, my problem is that I adhere to a school of thinking that is fifty years old (and that's one of the more recent ones). Speculation is inherently destabilizing, disruptive and detrimental to society at large; investment, on the other hand, is not only productive and stabilizing but necessary. The difference is that between being short-sighted and thinking long-term. It's fairly easy to see in individual cases, but hard to define, hard to make rules about. Like obscenity (or science fiction), I may know it when I see it, but that means in order to know it, I have to see it. And, of course, since I'm making a judgment about it, I run the risk of tautologizing myself into a corner; I can judge the category based on the results, which begs the question. Anyway, I think it's pretty clear that the financial structure of the US has moved, in large part, from investment to speculation, and that has encouraged short-term thinking in a variety of ways.

To tie this back in to our present brutal political situation, Paul Krugman points out that whether you want Iraq rebuilt or not (and, Gentle Readers, I do), the money being used to rebuild is not actually going to be invested, but rather spent for maximum short-term gain. That is the best we can expect from this administration, he says, and I have to agree. That doesn't mean that we shouldn't rebuild; Truman rebuilt much of the globe and did it more-or-less right (tho' we could argue about whether even that was a good idea). It does mean that we, as a nation, are morally obliged to vote Our Only President out of office at the next election. In my opinion, of course.

Redintegro Iraq,