Global Economic War Pits U.S. Militarism Against the World's Working People
Many have proclaimed the imminent demise of the dollar as an international reserve currency, and the IMF, UN, China, Russia, Libya, Venezuela, and Iran are leading efforts to replace the dollar with alternative regional and global currencies;
Meanwhile, enormous demonstrations by public workers and their allies in the labor movement against draconian wage cuts and union-busting efforts are sweeping the globe;
And, a new U.S.-European hot war on Libya and cold wars against Venezuela, Pakistan, China, Russia, Iran and many others have emerged as a result.
How are these monumental and historic sea changes, and maybe, even the ignominious downfall of a powerful IMF leader, inextricably interrelated? That's the question we are about to explore.
The Prosperity Agenda, and it's sister website, Voters for Peace, have been covering these events as they emerged and ensuring that you have the necessary information to respond along with your fellow peace and economic-justice advocates.
In the following article, we'll attempt to connect the dots in this intricate web of interweaved elements that make up U.S. domestic and foreign policy and its harmful effects on your economic welfare. And we want to emphasize: This is not the conspiracy of a tiny cabal. It's simply the result of policies and actions by the United States and its major allies and the response by its victims. If you find this information valuable, please donate to help us continue to provide you with the information and collective actions you need to respond effectively.
Let's start with the international struggle over the U.S. dollar's place since the end of World War II as the reigning global reserve currency, how that has advantaged U.S. hegemony and how attempts to replace the dollar will affect U.S. power.
In his June 15, 2009 Truth Dig article, "The American Empire Is Bankrupt," Chris Hedges—the multi-award-winning former New York Times war correspondent—did a yeoman's job of explaining the relationship between the dollar's decline, U.S. militarism aimed at maintaining and expanding its global empire, and the fortunes of average U.S. and international working people.
Hedges began with an ominous proclamation: "This week marks the end of the dollar’s reign as the world’s reserve currency. It marks the start of a terrible period of economic and political decline in the United States. And it signals the last gasp of the American imperium. That’s over. It is not coming back. And what is to come will be very, very painful."
Hedges was referring to the June 2009 meeting in Yekaterinburg, Russia, of Chinese President Hu Jintao, Russian President Dmitry Medvedev and officials from the Shanghai Cooperation Organization. The United States was not admitted to the meeting. Its purpose was to craft a strategy for dumping the dollar as the primary international reserve currency and replacing it with a more reasonable alternative. And what was then a meeting between a handful of nations has now snowballed into an unstoppable juggernaut.
The United States has for decades, and increasingly as its government and trade deficits increased, manipulated the international currency system as a way to pay for its monstrous military apparatus that includes more than 800 bases around the world, large-scale wars on Libya, Iraq, Afghanistan and Pakistan, and special forces combat deployments in 27 countries.
According to Hedges, the dozens of nations—including Russia, China and India—locked in mortal economic combat with the United States over the dominance of the dollar have figured out that the old system is propping up U.S. militarism. They are not going to take it anymore. As Hedges sums up: "Nations have reached their limit in subsidizing the United States’ military adventures." And as Prosperity Agenda and Voters for Peace have often explained, U.S. militarism is also the leading cause of economic hardship here in this country.
In the months leading up to the US/UK/French invasion of Libya, Muammar Gaddafi was busy setting up a gold-based pan-African currency that would have required all purchases of Libyan oil be paid in gold instead of dollars (see: The Gold Dinar: Saving the world economy from Gaddafi). In 2000, Saddam Hussein said that Iraq would no longer trade oil for dollars, turning instead to the Euro. And Venezuelan President Hugo Chavez has set up a new South American currency to compete with the dollar.
A March 26, 2009 article by the Financial Times, (see: UN panel urges reserve currency reform) reported on the efforts in the UN to replace the dollar: "The recommendation, by an advisory committee set up by the 192-member world body, followed China’s proposal for an extension of the use of special drawing rights (SDRs) created by the International Monetary Fund and the eventual replacement of the dollar as the world’s reserve currency."
SDRs are based on an IMF pool of all the world's most important national and regional currencies, so, used as a form of money for global trade it would minimize the ability of any one nation to manipulate the system to its own advantage.
According to the Financial Times: "Joseph Stiglitz, the Nobel-prize winning US economist who chairs the UN advisory committee, said reform of the global reserve system was long overdue."
Stiglitz maintained that the U.S.-dollar-based system "contributes to global instability" and is "bad for the world’s economies and bad for the US."
However, President Barack Obama and his economic cabinet are fighting back. Obama maintains that the dollar is strong and should remain the global reserve currency.
As mentioned in the Financial Times article, the IMF, led by French Socialist Party leader, Dominique Strauss-Kahn (yes, that Dominique Strauss-Kahn!), has taken the lead in currency reform movement, proposing SDRs as an alternative.
As most know by now, Strauss-Kahn was arrested May 14 and charged in New York with the sexual assault of a hotel chamber maid. Not only was Strauss-Kahn the leader of one of the two most powerful international lending banks, he was also the front-runner for next year's French presidential election.
Many in France and around the world are skeptical about Strauss-Kahn's arrest (see: In France, Skepticism and Anger Over Official’s Arrest). In fact, a majority of French people suspect a plot against him (see: Most French believe Strauss-Kahn victim of 'plot'). Fully 57 percent of the French and 70 percent of French Socialist Party members said that Strauss-Kahn was the victim of a plot, in a poll by French pollsters CSA May 17.
Like the case of Wikileak's Julian Assange, many believe that this particular sexual-assault charge is a bit too convenient for Barack Obama who is desperately fighting the move to dump the dollar, and Obama's close ally, right-wing French President Nicolas Sarkozy, who is fighting for his political life with Strauss-Kahn as his major adversary.
Of course we can't know what went on in that New York hotel room, but there is certainly enough motivation for foul play that we should all avoid rushing to judgment. In any case, Strauss-Kahn's arrest will undoubtedly hamper efforts to stabilize the global economy by replacing the dollar with a more reasonable alternative.
Just weeks before Strauss-Kahn's arrest, Stiglitz wrote a laudatory article about the IMF chief's work to reform the institution and replace the dollar with SDRs (see: The IMF’s Switch in Time). In that article, Stiglitz quoted Strauss-Kahn: “Ultimately, employment and equity are building blocks of economic stability and prosperity, of political stability and peace. This goes to the heart of the IMF’s mandate. It must be placed at the heart of the policy agenda.”
Stiglitz concluded, "Strauss-Kahn is proving himself a sagacious leader of the IMF. We can only hope that governments and financial markets heed his words."
As is to be expected, the corporate-owned news media in the United States is cooperating with President Obama by blacking out news about this struggle over the international reserve currency and its adverse affect on working people at home and abroad. In fact, Project Censored chose as its 2010 number-one most censored story of the year "Global Plans to Replace the Dollar."
The Project Censored article shows how U.S. manipulation of the dollar has helped to plunge us into deep global recession which in turn has forced some national economies into bankruptcy and most national governments to implement oppressive cuts in social services and public employee wages and benefits. This dire economic storm has also plunged many U.S. states into heated battles with public employees and other workers.
On Friday, May, 13, 20,000 workers marched on Wall Street in New York against Mayor Michael Bloomberg's cuts. And another 30,000 marched in Madison, WI, on Saturday, May 14 against Wisconsin Governor Scott Walker's drastic cuts and attempt to bust public workers' unions. Last month, 300,000 marched in London, UK, against that country's onslaught against public workers and students.
And it's not just English-speaking workers who are hitting the streets in protest to this global financial debacle caused by U.S. militarism and currency manipulation. Workers across Europe, the Middle-East, Africa, Asia and South America are on the march (see: http://hubpages.com/hub/Worldwide-Economic-Protests-and-Riots). The deep global recession is seen by many as the leading cause of the revolutions spreading across the Arab world as well.
This worldwide economic cold war—turned hot in many places—has pitted the international labor movement, including its U.S. wing, and many nations that are the victims of U.S. hegemony, against the world's largest-ever military and commercial empire. But many in the United States have become aware that our own government and the big business corporations that actually control it are not serving our economic interests, and in fact have harmed us with a perpetual war economy aimed at world domination.
Please join us at the Prosperity Agenda in building a movement that can turn swords into plowshares, and turn a global economy that only benefits the rich and powerful into a green, sustainable people's economy.
Chris Driscoll
CoFounder of Prosperity Agenda
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