Naomi Klein: The Borderline Illegal Deals Behind the $700 Billion Bailout
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The other thing that they're calling for is a greater role for the International Monetary Fund. And it's important to understand that the reason why the International Monetary Fund and the World Trade Organization and the whole free trade agenda, generally, has been in collapse in recent years is because countries around the world are no longer willing to accept the conditions attached to joining this club, the conditions attached to an International Monetary Fund loan. In reasserting a greater role for the International Monetary Fund, in calling for the World Trade Organization talks to get back on track, these world leaders are actually calling for more financial market deregulation, more of the same.
I'll give you one example: the Doha talks. Although much of the focus has been on agricultural subsidies, part of the Doha talks is about financial sector deregulation and the push, particularly from Britain and the United States, for countries like China and India to open up their financial services markets to US and British and European companies who want into these markets. And what's really striking is that you hear this language of anti-protectionism, you know, that we can't turn away from free trade. What this really means, Amy, is that Citibank and Barclays want to go into China, want to go into India, and they want to buy up Chinese and Indian banks, they want to get into these markets. But what's so incredible in this moment is the hypocrisy, just the rampant hypocrisy, because Barclays and Citibank and all of the other banks that would benefit from this type of free trade are of course the very banks that are receiving massive state protection from their own governments in the form of the bailouts that we've just been discussing. So these sort of corporate welfare bums now want to use the language of anti-protectionism to go into other countries and buy up their assets, but, of course, they are being subsidized so heavily by their own taxpayers. So it's a moment of high hypocrisy.
It's also a moment of, as I said at the beginning, lost opportunities, because -- just to give you one example, think about what these leaders could do if they really wanted to, in terms of collaborating to harmonize regulation, so that banks were no longer able to pit governments against each other for who could offer the lowest taxes, who could give them the best tax havens, who could offer the lowest regulation. There was just a hearing on Friday about hedge funds that Henry Waxman convened. And before those hearings, we heard from one of the wealthiest hedge fund owners in the country, Ken Griffin, who's actually an Obama supporter. Ken Griffin, a billionaire hedge fund owner -- he owns Citadel Investment -- was asked by the committee whether he believed that hedge funds were sufficiently regulated and whether they should be more highly taxed. What Ken Griffin said was that if that happened, there would be even more jobs in the financial industry in the United States lost to Britain. And he talked about how his heart breaks when he goes to Canary Wharf in London and sees how many good jobs have been lost to Britain, which has, in many ways, lower -- less regulation of hedge funds.
But what's so striking about that, Amy, is that it would be so easy in this moment for the US government and the British government to actually harmonize their regulations so that they could -- so that companies like Citadel Investment and other hedge funds would really have nowhere to run. And when you have a crisis like this, which so clearly shows the need for those types of regulations, when you have an election like there just was in the United States, where people have said clearly that this is a priority, the leaders have an opportunity to act and to close down these tax havens, to prevent this ability of governments to be pitted against one another, and have a race to the top as opposed to a race to the bottom. But they blew that opportunity, and they actually called for less regulation.