Tuesday, December 22, 2015

The only way to stop being bullied is to become rich.

As expected the WTO meeting in Nairobi ended in failure, without even a fig leaf of an agreement full of bromides, as in the Climate talks in Paris. While in Paris it was mainly the US which put the onus of cutting greenhouse gases on developing countries, this time Europe joined the US in demanding cuts in subsidies in agriculture from developing countries, while preserving their own. India was blamed both times. An average American home is 2,600 sq ft for an average family of 2.4 people, while an average home in India is 504 sq ft for an average family size of 4.8 people. 32% of urban homes are 258 sq ft or less for families of 4.3 people, which means 60 sq ft for each person, which is the size of a prison cell in the US. The US is 4 times the size of India with 300 million people, while we have 1,300 million crammed into ever decreasing space. It is our fault. Our government has a program of subsidies targeted at poverty, which only encourages more children among the poor, increasing poverty. Instead subsidies should be targeted at those who do not produce children or have just one child. The reason why the US wrecked the Nairobi talks is because it signed the Trans Pacific Partnership with 11 Asian countries in October and can isolate India. The US already has the NAFTA agreement with Canada and Mexico and wants a Transatlantic Trade and Investment Partnership with Europe. The US, being the largest economy, has natural advantages which it wants to enforce. It wants to force genetically modified foods on others and the Investor-State Dispute System in which a private enterprise can sue a government if it loses business due to changes in policy. Recently there was huge controversy in the US when Turing Pharmaceuticals bought rights to Daraprim and increased its price from $13.50 to $750 per tablet. Daraprim, or pyrimethamine, is at least 50 years old and is not covered by patent protection, so this was a brutal act. People have a choice in buying a cheaper car or not buying one at all but such choices do not exist in illness. Perhaps, the US government thinks that by allowing its companies to rip off its own people will justify ripping off people of other countries, which will be very lucrative. The US economy may not be as hot as they would like us to believe. Yields on junk bonds are rising and that has predicted a peak 8 out of 10 times in the past. Yields on junk bonds in the US rose by 47 basis points before the Great Depression of 1929, by 85 basis points before the Great Recession of 1937 and have risen by 120 basis points in the last 6 weeks. Record low interest rates have led to a boom in personal debts in the UK and 27 stock markets have given negative returns in 2015. By bullying weaker nations the US maybe precipitating a collapse of the global economy. Who will it trade with then?

No comments: