Today's Stories

November 19, 2008

M. Shahid Alam
Obama and the Politics of Race and Religion in America

November 18, 2008

Chellis Glendinning
Cheering for Morgan Stanley

George C. Wilson
Perils of Pakistan: Will It Prove to be Obama's Cambodia?

Franklin Lamb
Who Will Evict Israel from Lebanon: Hezbollah or the UN?

Bill and Kathleen Christison
The Irresponsibility of Appointing Hillary Clinton Secretary of State

Roger Burbach
Orchestrating a Civic Coup in Bolivia: How Bush Tried to Bring Down Morales

John Ross
Drilling vs. Direct Democracy in Mexico

Wajahat Ali
Is Obama the Muslim World's Superman?

Damien Millet /
Eric Toussaint
What Really Happened in Washington? The G20 and the Inconsistent Script

Marc Gardner
When Mooning is a Sex Crime

Eric Walberg
Courting the Bear: a New Era for Russian/Western Relations?

Wendy Williams
The Bottled Water Con

Website of the Day
Where's Zappa When We Need Him?

November 17, 2008

Michael Hudson
Bankers Shake Down Congress and the G-20

Paul Craig Roberts
When It's a Clear Day and You Can't See GM

Mike Whitney
Busted in Washington

Steve Conn
Where is Nader Country 2008? Mapping the Nader Votes

Andy Worthington
Closing Guantánamo: Advice for Obama

Jonathan Cook
The Real Goal of Israel's Blockade of Gaza: "They Are All Hamas"

Rannie Amiri
Dual Loyalties Will Doom Obama

David Macaray
Bailing Out the Automakers

David Michael Green
Twelve Victories

Charles Modiano
Sports Illustrated and Sexism: Tokenism or a New Day?

Website of the Day
The South Sea Bubble

November 14 / 16, 2008

Alexander Cockburn
Heading for the First Hundred Days

Jeffrey St. Clair
How Bill Clinton Doomed the Spotted Owl: a Cautionary Tale for Greens in the Age of Obama

Mike Whitney
Paulson the Bungler

Sasan Fayazmanesh
RIP: the Experts, 1929-2008

Moshe Adler
Keynes: China's Greatest Export?

Anthony DiMaggio
Transcending Race?

Jean Bricmont
Cats, Dogs and Creationism

Sheldon Rampton
The Eisenstadt Hoax: a Real Life Example of a "Fake Fake"

Douglas Valentine
Let the Trials Begin!

Joseph Nevins /
Timothy Dunn
Barricading the Border

Tom Barry
Rahm Emanuel's Political Pragmatism on Immigration

Ron Jacobs
Che Guevara Meets Trashman: the Genius of Spain Rodriguez

Larry Portis
The State of the Israeli State

Mary Lynn Cramer Obama's Brain Trust: Seems Like Old Times

Sherry Wolf
The Myth of the Black/Gay Divide

Peter Cervantes-Gautschi
Secretary of Greed: How Larry Summers Championed Wall Street by Impoverishing the Mexican People

Jacob Hornberger
The Conservative Malaise: Hey, Brother, Can You Spare Some Habeas Corpus?

Lance Selfa
The Center-Right Nation Con

Benjamin Dangl
Vermont Against General Dynamics

Seth Sandronsky
Lifelines in Hard Times

Russell Mokhiber
Time to Give the Friends of Big Coal the Boot

Allan Stellar
Nuke a Gay Whale for the Navy

Kelly Overton
Get Thee to a Shelter: the Obamas and the Million-Mutt March

Martha Rosenberg
Why Mink are Cheering the Economic Crisis

Richard Rhames
Palling Around with Ray the Plumber

David Yearsley
How I Played Hooky from "High School Musical 3"

Lorenzo Wolff
Zach is Back: Songs of Hurt, Rage and Resistance

Poets' Basement
Gibbons, Ford and Buknatski

Website of the Weekend
The Eyes Have It

November 13, 2008

Pam Martens
The Two Trillion DollarBlack Hole

Vijay Prashad
Guilt by Participation: Sonal Shah's Membership Has Expired

Patrick Cockburn
Who is Paying for the Iraqi National Intelligence Service?

Jonathan Cook
The Withering Palestinian Economy

Ralph Nader
Obama and the Rogue Regime

Bill Quigley
McCain Owes America an Apology

Lee Sustar
Bailing Out the Big Three

Omar Barghouti
Boycotting Israeli Settlement Products

Steve Conn
More Alaska Fun

Howard Lisnoff
The Last Bastion of Hate

Jeff Cohen
What Indy Media Heroes Can Teach Us

Website of the Day
Who are the Obamagelicals?

November 12, 2008

Johanna Berrigan
Scattered Families: the Iraq Refugee Crisis

Steve Conn
The Big Mystery Election in Alaska

Patrick Bond
Against Volcker

Bokar Ture /
Dedrick Muhammad
Remembering a Black Radical in a Barack Obama America

Alan Farago
The Hispanic Vote in South Florida: Not Dyed Blue Yet

Dave Lindorff
Rescuing Joe Lieberman

Karl Grossman
Break Up Big Oil: Tyranny in the Tank

David Macaray
An Obama Litmus Test: Will Labor Have a Seat at the Table?

George Wuerthner
Act Now to Save America's Public Forests

Susie Day
Heavy Weather

Website of the Day
Does the Planet Have a Future? an Interview with Derrick Jensen

November 11, 2008

James G. Abourezk
How to Vote Against Your Own Interests

Allan J. Lichtman
What Obama Can Learn From FDR

Eric Toussaint
Financing the Bailout: a Holy Union for a Deuce of a Swindle

Ron Jacobs
Moving Beyond Hope: a Leftist Looks at the Near Future

Peter Montague
Green Coal?

Corporate Crime Reporter
BP's Big Spill on the North Slope

Laura Carlsen
Latin America Sends Obama a Piece of Its Mind

Col. Dan Smith
A New Unifying Paradigm?

Morton Skorodin
The Machine Grinds On

David Michael Green
My Michelle Moment

Charles R. Larson
Ask Your Doctor for a Free Sample

Website of the Day
Will Old Faithful Be Sucked Dry?

November 10, 2008

David Roediger
Obama's Victory and the Future of Race in the United States

Paul Craig Roberts
Conned Again?

Peter Lee
Obama's Man in Afghanistan

Corey D. B. Walker
And We Are Not Saved

Jeff Halper
A Bone in America's Throat

Bill Hatch
Look on the Bright Side, Dammit!

Andy Worthington
Guilty By Torture

Bill Quigley
Anger and Hope: Haitian Families Furious Over School Collapse

Peter Morici
Paulson's Folly

Anthony Olszewski
The Advent of a New Black Politician

Kim Nicolini
Exile and Displacement on Bunker Hill

Cpt. Paul Watson
Farley Mowat's Last Book? Maybe Not

Website of the Day
Boondocks, Another Banned Episode

November 7 / 9, 2008

Alexander Cockburn
Hail to the Chief of Staff

Jeffrey St. Clair
The Politics of Fire

Vijay Prashad
Obama's Indian: the Many Faces of Sonal Shah

Tariq Ali
Great Expectations

Jean Bricmont
Our Obama Problem

John V. Whitbeck
Obama, Emanuel and Israel

Saul Landau
Politics Among the Ruins: Obama Faces an Economic Disaster

Peter Morici
Gone, Baby, Gone: Another 240,000 Jobs Lost

Lawrence Velvel
Obama and Afghanistan: the Return of Clintonia?

Karyn Strickler
Don't Govern From the Middle

Nativo V. Lopez
Banking on Obama with Open Eyes: Latinos and Obama

Christopher Fons
A Generational Moment: From Jackson to Obama

Alan Farago
Sarah Palin's Limited Engagement

David Yearsley
Where Late the Sweet Birds Sang

Christopher Brauchli
Pardoning Industry: Bush's Latest Executive Orders

Samah Sabawi
Gaza's New Cemetery

Dave Lindorff
Getting the Change We've Earned

Deepak Tripathi
A Revolution to Remember

Beth Sherouse
In the Wake of Lost Initiatives: the Gay Glass is Half Empty

Patrick Irelan
La Belle Dame Sans Regrets: Back to Alaska

Stephen Martin
Barack and the Temple

Richard Rhames
Meet the New Boss, Same as the Old Boss

J. Murray
White Cherokee Mythology

Lorenzo Wolff
Anthems for the Average Kid

Kim Nicolini
Exile and Displacement on Bunker Hill: Art Meets Realism in "The Exiles"

Poets' Basement
Farrelly, Fleming and Browne

Website of the Day
Take Who Takes You (For the New Big O)

November 6, 2008

Frank J. Menetrez
Now What?

John Chuckman
The Big Leap: From Hope to Change

P. Sainath
A Magic Moment (But Still Behind the Global Curve)

Joshua Frank
A Look Under the Hood of an Obama Administration

Edna Canetti
Come, Obama, Change My Life: a Plea from Israel

John Ross
Brad Will is Still Dead

Norman Solomon
Sorry Joe: a Mandate for Spreading the Wealth

Fawzia Afzal-Khan
The Morning After: Pakistan and Its New Bedfellow

Robert Weissman
Mordor Brightens: Obama's Challenge--and Our Own

Harvey Wasserman
A Blow to Nuclear Power in Chicago

Website of the Day
Pot Wins Big

November 5, 2008

Cockburn / St. Clair
Why McCain Lost

Chuck Spinney
How Obama Won

Ishmael Reed
Morning in Obamerica: the Promised Land?

Chris Floyd
A Prism for the New Paradigm: "What If Bush Did It?"

Binoy Kampmark
Obama's Victory: a Nation Divided

Michael Donnelly
The Rebooting of America, 2008

David Macaray
Who Should be Secretary of Labor?

Peter Morici
Obama's First Moves on the Economy

Manuel Garcia, Jr.
What Real Change Should Bring

William Willers
Will We be Forced to Sell Off the Public Lands?

Website of the Day
The Killing Fields of South Africa

November 4, 2008

Kathleen Christison
McCain, Obama and Khalidi

James Ridgeway
A New World?

Winslow T. Wheeler
Cleaning Out the Pentagon Pig Sty

Mike Whitney
Obama's Little Red Book

Conn Hallinan
A New Foreign Policy

Holly M. Barker
The Inequities of Climate Change and the Small Island Experience

Ashley Smith
Where is the Occupation of Iraq Heading?

Andy Worthington
Guilty Verdict Fails to Justify Gitmo Trials

Martha Rosenberg
AIG: Too Big to Play Fair

Stephen Martin
Breakdown of the Globalisation Agenda

Doug Lummis
Full Moon Over Okinawa

Carlos Fierro
An Anarchist View of Elections

Website of the Day
La Pequeña as Sarah Palin

November 3, 2008

Patrick Cockburn
Friends Like These

John Kennedy O'Hara
Voter Lockdown: Prosecuting Voters

Peter Montague
Is Nuclear Power Green?

Steve Conn
Nader and the Youth Vote

Andrew Gebhardt
How Much Do the Differences Between Obama, McCain and Bush Really Matter?

Ron Jacobs
Bombing Syria: Borders are for Sissies

Ralph Nader
Between Hope and Reality: an Open Letter to Senator Obama

Niranjan Ramakrishnan
Cleaning Up After Bush

Uri Avnery
Obama and the Order of the Optimists

Dave Lindorff
Studs and Me

Fred Gardner
Adieu, Rimonabant

DC Larson
You Are How You Vote

David Michael Green
McCain Finally Gets Tough

Val Strange
Hopeless Hoi Polloi or Step in the Right Direction?

Tuli Kupferberg /
Jeffrey Lewis
Wailing Wall Street:
Bring Spare Money!

Website of the Day
Pranking Palin (the Uncut Version)

October 31 , 2008

Alexander Cockburn
Change You Can See

Jeffrey St. Clair
Killing Leroy Jackson: the Indian Wars Have Never Ended

Douglas Valentine
Giving Aid and Comfort to the Enemy: McCain's 14th Amendment Problem

Ismael Hossein-Zadeh
The Great Bailout Fraud: Misrepresenting the Financial Crisis

Dr. Ignacy Nowopolski
Is the Global Economy a Mistake? an Interview with Paul Craig Roberts

Alan Maass
What's So Funny About Peace, Love and Spreading the Wealth?

William P. O’Connor
Reflections of an Average Joe

Patrick Irelan
Johnny's Tantrums: McCain the "Gook Hater"

Brian Cloughley
Out of Control: Memo From Islamabad

Mats Svensson
The Last Dance in Ramallah

Binoy Kampmark
Into Syria We Went

Steve Conn
The Future of Ted and Sarah

Alan Farago
The Division of Florida: the Politics of Growth

Morton Skorodin
The Bush-Obama-McCain Administration

Robert Bryce
Not McCain

Wajahat Ali
Dear John McCain, Please Stop...

David Yearsley
Palin's Flute, Obama's Voice

Dennis Loo
What to Do with Bush and Cheney?

Pam Martens
Why 2008 Feels Like 1932

Stephen Martin
Defense Strategies in Economic Warfare

Richard Rhames
Nothing for Something: the Doomed Rustic's Lament

Ramzy Baroud
A Third Palestinian Intifada

Missy Beattie
I'm Sick of Their Voices

Howard Lisnoff
Burning Reason: More From the Religious Right

Richard Neville
Pickled Heads: First the Revelation, Then the Revolution

Saul Landau /
Farrah Hassan
Bush Ultra Lite: Oliver Stone's Oedipal Problem

Kim Nicolini
Max Payne: Vigilante Violence as Sex Story

Lorenzo Wolff
Dance to the Music--or Else!

Poets' Basement
Four Poems from the Japanese Trans. by Rexroth

Website of the Weekend
Art Against Empire

October 30, 2008

Cockburn / St. Clair
McCain's Women Problems

Vijay Prashad
Smearing Rashid Khalidi

Paul Craig Roberts
World Tires of Rule by Dollar

Glen Ford
Turning the Tide of Ethnic Cleansing in America's Cities

Stanley Heller
Wall Street Bonus Madness

William Loren Katz
"Kill Him!:" a Political Chronicle

Joshua Frank
Memo to Progressives for Obama: What Happens After the Election?

James McEnteer
The Year of Unreliable Witnesses

Felice Pace
The Big Change: Can "Civic Unreasonableness" Save the Earth?

Jonathan Cook
The Executions at Kafr Qassem

Reza Fiyouzat
Boycott the Elections!

Website of the Day
An Open Letter to Whole Foods

October 29, 2008

Arno J. Mayer
The US Empire will Survive Bush

Eric Toussaint
How the Food and Financial Crises are Interconnected

Matt Gonzalez
What Do They Have to Do to Lose Your Vote?

Steven Conn
Obama and the Camp Followers

Jonathan Cook
Israel Bars Visit to a Father's Grave

Patrick Bond
Strauss-Kahn Strikes Again!

Ramzi Kysia
A Freedom Rider in Gaza City

Douglas Valentine
A Glimpse Inside the Head of Joe the Plumber

Stephen Martin
What America is Owed

Margaret Dooley-Sammuli
Alternatives to Incarceration

Amee Chew
Support Obama, Vote McKinney?

Website of the Day
N-Word Chant Doesn't Phase Palin

October 28, 2008

James G. Abourezk
How to Bail Out the Taxpayers

Andy Worthington
The Empty Chair at Guantánamo

Gary Leupp
The Specter of the Sixties: Palin v. Ayers

Paul Craig Roberts
The End of the American Road

Mike Whitney
Meet the World's New Currency

Gregory V. Button
What the Next President Must Do to Save FEMA

Ralph Nader
Share the Sacrifices, Share the Benefits

P. Sainath
Haunted by Socialism

Martha Rosenberg
Melting Pot in Hell

Charles R. Larson
Palin/Wurzelbacher 2012!

Website of the Day
Why You Can't See Across the Grand Canyon

October 27, 2008

Michael Hudson
Scenes From the Global Class War

Barbara Rose Johnston
The Clean, Green Nuclear Machine?

John Dinges
Palling Around with Dictators: McCain and Pinochet

Mike Whitney
Chickenhawks and the Horrors of War

Mary Lynn Cramer Greenspan's Higher Power

Alan Farago
Origins of the Fall

David Michael Green
Remind Me Again: Who Won the Cold War?

Andy Worthington
The Collapse of Omar Khadr's Guantánamo Trial

George Wuerthner
Is Ranching Sustainable? The Story of Bob the Rancher

Niranjan Ramakrishnan
The Obamanations of Barack

Website of the Day
Heartland of Darkness

October 24 / 26, 2008

Alexander Cockburn
Waiting for the Curtain to Rise

Ishmael Reed
Boogiemen: How Lee Atwater Perfected the G.O.P.'s Appeal to Racism

Mike Whitney
Down for the Count

Don Santina
How Maria Fell: Death in the Central Valley

Scott Boehm
Manufacturing Sympathy: Palin, Special Needs and Identity Politics

Saul Landau
Faith-Based Surge: Whining About Winning in Iraq

Ron Jacobs
Iraq and the Arrogance of Washington

Binoy Kampmark
Afghanistan the Un-Winnable

Linn Washington Jr.
The Great Vote Fraud Hoax

Nicole Colson
Mocking Our Rights: McCain's Disdain for Women's Health

Bernard Chazelle
The Humorology of Power

Brian Jones
Campaign by Codeword

Christopher Brauchli
Down the Drain with McCain's Vetters

Benjamin Dangl
Bolivia Rejects Neoliberalism

Val Strange
The Fraternity of John McCain: Scenes from North Carolina

Joe Mowrey
Name That Candidate: He Supports Petraeus, the Death Penalty, the Bailout, Nuclear Power, the Occupation...

Steve Early
SEIU Learns the Meaning of "No"

David Macaray
Patriotism and the Labor Movement

Allison Kilkenny
You Have the Right to Airport Harassment

Richard Rhames
Open Season

Jim Bell
Nuclear Power's Big Con

Kris De Welde
Domestic Violence and Financial Stress

Barry Clemson
John Wayne Syndrome

Adam Engel
Last Exit to Disneyland

Mark Scaramella
The World's Weirdest Pipe Organ?

Tuli Kupferberg
Nobody for President: the Original Version (Annotated)

Lorenzo Wolff
A Frustrated, Broken-Hearted Joy from Kidnapkin

Poets' Basement
Gibbons, Swartzfager and Payne

Website of the Weekend
Patrick Cockburn Dismantles the Surge

October 23, 2008

Allan J. Lichtman
What Voter Fraud?

Todd Chretien
Why I'm Not Voting for Obama

John Ross
No Child Left Behind, Mexican-Style

Peter Morici
Strategies to End the Crisis

Mats Svensson
Short Film Clips at a Checkpoint

Marlene Martin
Don't Let Them Execute an Innocent Man

Robert Jensen /
Pat Youngblood
Looking Beyond the Election and Beyond Elections

Margaret Kimberley
Rightwing Obama Love

Deepak Tripathi
Post-Bush Scenarios

David Morris
Why Joe the Plumber is a Socialist (And You Are, Too)

Website of the Day
Voting While Black in North Carolina

October 22, 2008

Brian Cloughley
Kid Killers are Barbarians

Heather Gray
Raising Hell in the South: the Legacy of J. L. Chestnut, Jr.

Jeff Birkenstein
McCain's Disdain for Spain

Ralph Nader
The Song Remains the Same: Convergence and Avoidance in the Presidential Election

DC Larson
The Growing of a Heartland Nader Raider

David Swanson
Colin Powell, Not Qualified for Government Service

Keeanga-Yamatta Taylor Race and the Election: When the "Real" America Enters the Voting Booth

Larry Everest
9/11 and the Imperial Adventure in Afghanistan

Robert Fantina
Anything to Win

Martha Rosenberg
The Financier's Playbook

Stephen Martin
Giving It Up to the Combine

Website of the Day
Brokers with Hands on Their Faces

October 21, 2008

Vijay Prashad
Wealth's Apostles

Paul Craig Roberts
How Inflation Works: Why I Can't Buy an Old Ferrari

Corey D. B. Walker
Empire and White Supremacy

Steve Breyman
How to "Win" in Afghanistan

Eric Toussaint
The Economic Crisis and Latin America: Time to Delink

Wajahat Ali
Boo Radley Comes Out to Play: the Emerging Muslim-American Electorate

Robert Weitzel
Wasting a Vote for Lincoln's Radical Ideal (Or Why I'm Voting for Nader)

Brendan Cooney
Palinoscopy: an Exploration of Why Liberals are So Obsessed with Sarah Palin

Dave Lindorff
Cuba's Oil Reserves: a Game-Changer?

Marqueece Harris-Dawson / Bob Wing
When You're a Black Candidate There's No Such Thing as a Safe Lead

Patrick B. Barr
Socialist, Socialist, SOCIALIST!

Omar Barghouti
The Boycott and Palestinian Groups: Countering the Critics

Website of the Day
How to Dismantle a US War Plane (and Get Away With It)

October 20, 2008

Michael Hudson
The ABCs of Paulson's Bailout

Anthony DiMaggio
The Scandal That Never Was: ACORN, Rightwing Media and Election "Fraud"

Tariq Ali
Zardari Bans My Books

Uri Avnery
Is Akko Burning?

Bill Quigley
Hammered by the Swedes

Ben Rosenfeld
The Politics of St. Joe, Martyr to a Lie

David Michael Green
Payback's a Bitch: McCain on the Ash Heap

William S. Lind
The Afghanistan Advantage

Chris Genovali
Drill, Baby, Drill (Wink, Wink)

Stephen Martin
The Last Man in America

Howard Lisnoff
Bad News for War Resisters

David Yearsley
Organ Meat

Website of the Day
Our Brother is Sick: the Steve Ferguson Cancer Fund

October 17 / 19, 2008

Alexander Cockburn
Blow Ups and Bombers

Jeffrey St. Clair
Inside Hanford: a Trip to America's Most Toxic Place

Pam Martens
How the Banksters are Making a Killing Off the Bailout

Paul Craig Roberts
Government of Thieves

Mike Whtney
No More Investment Banks

Michael D. Yates
Bowling Alley Blues: Racism Dies Hard in Johnstown, PA

Suzanne Smith
The Energy-War Connection: McCain Said It, Why Don't We?

Carl Boggs
Prosecuting Bush

Ralph Nader
Closing the Courthouse Doors

Fidel Castro
The Global Crash

Dave Marsh
The Great Levi Stubbs

Saul Landau
Denial, the Election Musical Comedy

Jo Guldi
The Floods of Heaven

Kevin Zeese
Now the Cost of War Really Matters

Larry Everest
Afghanistan, Not a Good War Gone Bad

Steve Early
Stop, in the Name of Joe!

David Macaray
Hey, Joe

Ben Terrall
When Ike Hit Haiti

Missy Beattie
Palin and God's Children

Don Monkerud
American Exceptionalism

Helen Redmond
Health Care Now's Big Con

Dan Bacher
Schwarzenegger's Delta Vision: Canals and Dams to Bail Out Big Ag

Wajahat Ali
Bush Gets Stoned

Farzana Versey
The White Tiger's Stripes and Gripes

Vladimir Frolov
Medvedev to Obama: We Come Not to Bury America, But to Buy It

Kim Nicolini
Frozen River: At Last, a Great Movie That's Neither Hip Nor Cool

Poets Basement
Gibbons, Corsale, Davis and Fleming

Website of the Day
The Real Sarah Palin?

November 19, 2008

The Vindication of China?

Escaping the Dollar's Shadow

By MARTINE BOULARD

Like it or not, the next US president must accept that his great country and its mighty dollar are no longer unchallenged masters of a world economy slowing alarmingly. According to the International Labor Organization (ILO), there will be 20 million more people unemployed worldwide by the end of 2009 than in 2007. The
summit of both industrialized and emerging nations, the G20 on  November 15,  did  not challenge a market system that has patently failed. Change will be slow because China, America's main banker, has a vested interest in maintaining the status quo - for the moment at least

The US government decision to bail out the mortgage giants Fannie Mae and Freddie Mac in September came - according to rumor - after a phone call in which the Chinese president, Hu Jintao, threatened President George Bush that if they were not rescued, China would stop buying US Treasury bills. The US government denies the story. The Chinese point to the facts: Fannie and Freddie were saved and the Chinese loans, $595.9bn, were guaranteed. The story is emblematic of the current changes in the geopolitics of capital.

Once upon a time the US determined the world's financial affairs alone, but at the 63rd session of the UN General Assembly, on  September 24, Bush had to endure the reproaches of heads of state. "There was a certain satisfaction among some of the attendees that the Bush administration, which had long lectured other nations about the benefits of unfettered markets, was now rejecting its own medicine by proposing a major bailout of financial firms" (1).

China 'vindicated'

On  September 27, Chinese economists and politicians reminded the World Economic Forum in Tianjin that they had been justified in resisting pressures for the total liberalization of China's financial system. Liu Mingkang, chairman of the China banking regulatory commission, said: "When US regulators were reducing the down payment to zero, or they created so-called reverse mortgages, we thought that was ridiculous" (2).

In recent years Liu has tried to bring order to this chaotic sector and to ensure that the markets are controlled by the state, rather than by their own invisible hand: "A lot of the time, we learned that what we had learned from our teacher the day before was wrong." This irony did not escape the bankers present who, in a move without precedent in the financial world, admitted responsibility. Stephen Roach, Morgan Stanley's Asian head, acknowledged that huge mistakes in monetary policy had been made and accused the US central bank, the Federal Reserve, of forcing the US into an orgy of consumption.

Only a few Americans were invited to the orgy. Although 1 per cent of Americans own 20 per cent of national income, a historical record, overall median earnings rose by only 0.1 per cent a year between 2000 and 2007. For most people the problem was less that consumption rose too high than that wages fell too far, forcing people to borrow for housing, education and healthcare (health insurance premiums have rocketed). Wealthy people and leading companies chose to invest abroad at the expense of domestic industrial development, forcing the US to import more and export less, driving up the deficit.

The US rich got richer by refusing to pay decent wages, driving the poor into the arms of lenders. The developing world paid the ultimate price. Until the mid 1980s, capital flowed from the developed to the developing world; this flow has reversed. Emerging economies made US deficits good by buying Treasury securities, debts issued by the US government and 80-90 per cent taken up abroad. Although Japan is still their major purchaser at $1,197bn (3), China, in second place with $922bn, is now the US's banker as well as the workshop of the world. Including other major holders of US bonds (Hong Kong, South Korea, Singapore), Asia incorporates more than half of all foreign US public debt. The oil-exporting countries are major suppliers of capital funds (although only half as much as China), along with emerging nations such as Mexico and Brazil. Russia, so disparaged by Bush, is among the top 20 global lenders, thus demonstrating that you can trade insults and do business simultaneously.

But he who pays the piper calls the tune, or hopes to. It would be catastrophic for Wall Street if China reduced its financing or stopped buying Treasury securities - not that it is contemplating such a move. "We should join hands," China's prime minister Wen Jiabao told Newsweek magazine. "And particularly at such difficult times, China has reached out to the US. And we believe such a helping hand will help stabilise the entire global economy and finance and prevent major chaos from occurring. I believe now that cooperation is everything".

Some commentators have seen this as proof of an ideological alliance between supporters of capitalism. But China is simply trying to defend its interests. As the prime minister continued: "If anything goes wrong in the US financial sector, we would be anxious about the security of Chinese capital" (4). This is true externally, since the crash has not spared China's foreign holdings, as well as internally.

Treasury bills have allowed the US to finance its deficit and borrow the money to buy cheap Chinese goods; but China is sitting on the world's largest dollar reserves, almost $2trn (5), more than two-thirds of its total annual production. If the present tsunami swept away the US financial system and undermined the dollar, China's nest-egg would be destroyed, another reason why China won't spoil the party, ignore the next round of Treasury securities or significantly reduce its dollar reserves. Any fall in the value of the dollar would bring about a rise in the value of the yuan and devalue China's dollar reserves, as if China had spent decades stacking up toytown money. Nobody is going to do anything rash.

Japan, Russia also in play

The US can no more do without Chinese finance than China can be indifferent to the fate of the US. This mutual dependence also includes Japan, which holds the world's second largest dollar reserves, and for Russia, which holds the third largest. This is the legacy of the special role that the dollar has played in world trade since 1945.

The US emerged from the second world war as the richest power. Britain was weakened by debt; France was exhausted; the Soviet Union had been bled dry. US dominance was formalized by the Bretton Woods accords, named after the New Hampshire town where the new financial rules were laid down in July 1944. These affirmed the pivotal role of the dollar (in place of sterling) and created the two institutions that became Washington's wings: the International Bank for Reconstruction and Development (IBRD, subsequently part of the World Bank) and the International Monetary Fund (IMF). The Marshall Plan for Europe was funded in dollars to consolidate the strength of the dollar and guarantee opportunities for US producers.

One of the most famous participants at Bretton Woods, John Maynard Keynes, fought hard against the dollar's stranglehold and proposed a monetary system based upon a unit of account, a genuinely international currency called the "bancor" (6). But the balance of power was against him. The dollar won, and with it US hegemony over the West. US politicians could do what they liked, leaving others to pick up the tab. When the situation became too complicated, the US unilaterally changed the rules. As US Secretary of the Treasury John Connally famously told his European counterparts in 1971: "The dollar is our currency, but your problem."

On  August 15, 1971, President Richard Nixon ended the direct convertibility of the US dollar into gold. Henceforth it would be mere paper, fluctuating at the whim of the markets and US policy. This strengthened the "exorbitant privilege" of the dollar, which had been denounced in 1965 by General de Gaulle. But since governments gave in, commercial transactions were largely carried out in dollars, which the central banks raked in (along with marks, yens and eventually euros).

The dollar system still dominates the globe. The US can run up debts and have them settled by its "partners". It can simultaneously attract capital investment (for industry, research or to bail out companies at home) and export it (to facilitate the establishment of multinationals abroad). In 2007 the US was the leading beneficiary of global foreign direct investment; it is also the leading investor abroad (7). It enjoys an unrivalled power of geopolitical selection of capital.

But the system is unstable. States with accumulated reserves are no longer content to put their money in banks as the oil-exporting countries did during the 1970s; they have set up sovereign wealth funds (now worth at least $4trn) to invest in colossal development projects, as in the Gulf states, or to buy up foreign companies (8). Many Western companies are apprehensive.

The weight of the dollar in global currency reserves has fallen almost 10 points in less than a decade. In mid-2008 it made up only 62.4 per cent of the currencies held by central banks, compared with 71.2 per cent at the end of 2000. During the same period the euro's share rose from 18.3 per cent to 27 per cent. The yen, asymbol of Japanese power between 1970 and 1990, when it inspired prophecies of the decline of the US, also fell, from 6.1 per cent to 3.4 per cent (9). But neither the euro nor the yuan is yet in a position to supplant the dollar. Only the combination of acknowledged economic power and an attractive, original political vision could overthrow the prevailing system or allow all its participants to be treated as equals.

Having plunged into US-style deregulation, the European Union is hardly in a position to confront this challenge. Even the most optimistic experts now anticipate only negligible average growth next year, accompanied by an exponential rise in unemployment and business failures. Politically, the EU is impotent and, whatever the press may say, it has come up with no effective response to the crisis. Nobody will lament the fact that it has jettisoned some of its inviolable principles: so much for the Maastricht limits on public deficits, the ban on state aid to national companies, and the "single program". Europe's politicians have adopted the policy of bank nationalization first imposed by Britain's prime minister Gordon Brown, whose Euro-sceptic country isn't even a member of the euro zone.

China not immune to chaos

But what about China? Shen Dingli, professor of international relations at Fudan university in Shanghai, states: "This is not a time for China to be on a par with America. But the relative shift of the centre of gravity does bring China more confidence" (10). As the world's third economic power, closely involved in the financial tsunami, China is not immune to the chaos. Chinese economists already estimate that "all the big offshore investments made last year are in the red" (11). Holdings in the banks Morgan Stanley ($5bn) and Blackstone ($3bn), which symbolised China's arrival as a financial force, have been heavily written down.

There has been debate on current policy within leading echelons of the Communist party and on the internet. China's government refused to bail out the US bank Lehman Brothers. One official explained that the Chinese should no longer be regarded as "sleeping partners", or their investments as "dumping grounds for toxic shares", and pointed to the bailout of Morgan Stanley by the Japanese bank Mitsubishi UFJ, which will acquire a seat on the board.

So far China has been relatively unaffected by the worst insanities of the investment markets. The Financial Times reported a story that did the rounds in Beijing: "At a secret meeting of top Communist officials at the start of this decade, Zhu Rongji, then China's premier, summoned senior academics and finance officials to teach a crash course on complex financial instruments. Financial derivatives. . . were described as like putting a mirror in front of another mirror, allowing a physical object to be reflected into infinity" (12). This is a good description of a mechanism with a worldwide value of more than a $1,000 trillion - the equivalent of 20 years' global production - resting on sand.

Zhu and his successors trod carefully. Although, as an economist from the Industrial and Commercial Bank of China (ICBC) in Shanghai said, "we don't know how many skeletons there are in the cupboard", China's banks seem to have limited their exposure to investments of this sort. But there must be doubts about the recent decision to authorize margin lending and short selling at a time when some western countries were introducing restrictions to curb speculation. Another potential problem is the housing bubble, which remains significant despite some deflation over the past two years. But as the ICBC economist pointed out, in public building the demand for profit is less pressing since "the Chinese state can wait".

Globally China has preserved its safeguards. Professor Yang Baoyun of the school of international studies at Beijing University claimed "the financial system is still under control". Despite international pressure, China has retained a largely-nationalized banking sector and maintained control over its currency and foreign exchanges (13). The IMF had intended to move against these regulations in October; this has now been postponed until a more favorable moment. As the IMF's managing director Dominique Strauss-Kahn said, without irony: "China's imbalance is a long-term problem and can wait one more month" (14). China has retained the capacity for state intervention and has, significantly, kept growth tied to production and research. The systemic crisis affecting the US and Europe is proof that services and finance cannot be decoupled from material production for ever.

Chinese development is driven by exports, so the expected fall in consumption in its main client countries (the US and the EU) may undermine sales and levels of production (15). At the beginning of this year, many analysts argued that since 60 per cent of China’s trade is with other Asian countries, its development would not be damaged by the collapse of the developed world. But the rest of Asia is not immune to the slowdown (Japan is on the edge of recession, South Korea is struggling and India is in no better shape); and between half and two-thirds of intra-Asian trade, in the words of Sopanha Sa, an economist at the Société Générale, "winds up in the markets of the G3 (the US, the EU and Japan)". The disappearance of this final destination would have immediate consequences. There are already fears that 2.5 million people could lose their jobs in China's most export-oriented region, the Pearl River delta.

An unsigned editorial in the Chinese Communist Party newspaper, the People's Daily, summed the situation up perfectly: "Disillusionment with Wall Street myth has further endangered the already downward global economy, and posed a fresh threat to China's foreign trade, which is already on the verge of collapse... In the long run, the relative advantages of `Made-in-China' would possibly be offset, and China's competitiveness in exports would be dulled. The global geopolitics is getting increasingly complex, neo trade protectionism is looking up, and in future, the trade barriers against China would increase rather than decrease" (16).

Aware that it is entering a new phase, the Chinese government is looking for sources of growth. Professor Yang was clear: "Our only option is to develop our internal markets. We've been talking about it for a long time; now it's time to get down to it." The authorities must tackle inequalities between town and country. Rocketing food prices raised farmers' incomes by 17.9 per cent during the first half of this year (17). But it takes more than increased purchasing power to drive consumption: some of this increase is squirreled away (China has the highest savings rate in the world) as families put money aside for sickness or retirement. So the government must increase incomes and build the current embryonic system of collective social security into something effective.

But the internal forces that drive growth have already begun to change. According to Li Xiaochao, a spokesman for the National Bureau of Statistics, China's 11.4 per cent growth in 2007 "broke down into 4.4 per cent driven by consumer spending, 4.3 per cent from investments and 2.7 per cent contributed by net exports" (18). Growth is expected to be 10 per cent this year and 7-8 per cent in 2009. Western leaders would be ecstatic about these rates, but given the internal challenges facing China (poverty, rural discontent, the political unpredictability of the middle classes) they suggest trouble on the horizon. And any future growth must consider impact on the environment.

Another day, another dollar?

Externally, China is looking for ways to loosen the dollar's stranglehold. It has recycled some of its profits from Africa as loans, ignoring conditions imposed by the World Bank and the IMF. It is signing bilateral trade agreements to guarantee its energy supply (Venezuela, Russia, Iraq and Iran) and to create new outlets (Japan, India). It supports the idea of an Asian Monetary Fund, proposed in May 2007 in conjunction with Japan and South Korea. This would have $80bn to play with, allowing its three founders, and the 10 members of the Association of Southeast Asian Nations, to guarantee their financial stability without having to go to the IMF, which the region has yet to forgive.

There are similar initiatives in other parts of the world that seek to escape the shadow of the dollar. Argentina, Bolivia, Brazil, Ecuador, Paraguay, Uruguay and Venezuela are all members of the Bank of the South, intended to support infrastructure funding outside the Bretton Woods system. Argentina and Brazil have agreed to conduct reciprocal payments in local currency, bypassing the dollar. Brazil, Russia, India and China have come together in an informal bloc known as BRIC. Russia's self-assertive stand in Europe is due to more than just its control of raw materials. Brazil is a major player in South America, despite its vulnerability to the US recession. Trade is expanding rapidly between countries within the developing world. But we are still a long way from a united front with the capacity to impose new international rules or dethrone the dollar and its institutional props, the IMF and the World Bank.

Professor Arvind Subramanian, a senior fellow at the Peterson institute for international economics in Washington DC, has suggested that China might lend money to the US, but with strings attached. "First, it would declare that the offer of money was conditional on the US government adopting a particular approach to rescuing the banks - the use of government money to recapitalize the banks. . . The second condition would relate to social safety nets, which had become standard embellishments to World Bank/IMF adjustment programmes." Such moves "would seal China's status as a responsible superpower" (19). So far China has neither the desire nor the means to do this. But tomorrow is another day.

Notes

(1) Neil MacFarquhar, "Upheaval on Wall Street stirs anger in UN", International Herald Tribune, 24 September 2008.

(2) These and subsequent quotes from Yann Rousseau, "Quand Pékin donne des leçons de capitalisme à l'Amérique", Les Echos, Paris, 29 September 2008.

(3) "Foreign holdings of US securities", United States Department of the Treasury, Washington DC, 29 February 2008.

(4) Fareed Zakaria, "We should join hands", Newsweek, New York, 6 October 2008.

(5) The World Factbook, Central Intelligence Agency, Washington DC.

(6) Keynes proposed a comprehensive global architecture with an International Trade Organisation supported by a central bank, the International Clearing Union. See Susan George, "Alternative finances", Le Monde diplomatique, English edition, January 2007.

(7) At the end of 2007, FDI inflows to the US amounted to $237.6bn, compared with outflows of $333.3bn. See "World Investment Report 2008", United Nations Conference on Trade and Development, New York, 24 September 2008.

(8) See Ibrahim Warde, "Where poverty leads to death", and Akram Belkaïd, "1754", Le Monde diplomatique, English edition, respectively May and August 2008.

(9) "Currency Composition of Official Foreign Exchange Reserves (COFER)", International Monetary Fund, Washington DC, 30 September 2008.

(10) David Pilling, "America's chance to kick its Asian addiction", Financial Times, 2 October 2008.

(11) Jamil Anderlini, "Prudence guides China's outook", Financial Times, 24 September 2008.

(12) Ibid.

(13) See Martine Bulard, Chine, Inde. La course du dragon et de l'éléphant, Fayard, Paris, 2008.

(14) "IMF delays China report", South China Morning Post, Hong Kong, 1 October 2008.

(15) According to the National Bureau of Statistics (NBS), 19 per cent of Chinese exports go to the US and 20 per cent to EU countries.

(16) "Wall Street turmoil tests China's foreign trade", People's Daily, October 6 2008

(17) NBS, October 2008. But rising prices have eroded the purchasing power of the urban population.

(18) "Consumption edges ahead as the most powerful engine of China's economic growth", People's Daily, 30 January 2008.

(19) Arvind Subramanian, "A master plan for China to bail out America", Financial Times, 7 October 2008.

Translated by Donald Hounam

This article appears in the November  edition of this excellent monthly, Le Monde Diplomatique, whose English language edition can be found at mondediplo.com. This full text appears by agreement with Le Monde Diplomatique. CounterPunch features one or two articles from LMD every month.

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