Tuesday, April 7, 2009

Finally Something We Can Agree On? (part I)

Recently, a Bosnian client of mine spoke to me about the waste, corruption and abuses of power that various international aid organizations demonstrated in Bosnia. After speaking with this thoughtful individual, I delineated three principles of governance that most informed "progressives" and conservatives can agree upon:

1. Distant, unelected governing bodies rarely are accountable to public scrutiny and popular will.

2. The less accountable a governing body is to the public, the more wasteful, corrupt it will be and the less responsive it will be to the needs and desires of the public.

3. Centralizing power and wealth in unelected governing bodies erodes local and national sovereignty, democracy and decision making, to the detriment of the people.

Keeping these principles in mind, "progressives" and conservatives should be extremely concerned about several of the principles and agreements that the G20 agreed that in effect heralded a "Global New Deal." Here are some of the more disturbing aspects:

1. Triple the funds of the IMF, an unelected, unaccountable body, to $750 billion. "Progressives" and many conservatives have been extremely critical of the IMF for it's aggressive attacks on national sovereignty by dictating economic and social policy often against the will of the public. In the past the IMF's restructuring was confined to defunct third world nations, but apparently it will exercise increasing control over the economic policies of the United States.

Jeffrey Sachs, the director of the Harvard Institute for International Development said:

"In Korea the IMF insisted that all presidential candidates immediately "endorse" an agreement which they had no part in drafting or negotiating, and no time to understand. The situation is out of hand...It defies logic to believe the small group of 1,000 economists on 19th Street in Washington should dictate the economic conditions of life to 75 developing countries with around 1.4 billion people."

2. Grant Special Drawing Rights to the IMF, which in effect grants it the power to create a new paper (fiat) global currency.

3. Create a global fiscal stimulus of over $1 trillion and coordinate (mandate) the fiscal and monetary policies of (the central banks of) G20 members, including a fiscal expansion of $5 trillion dollars via the central banks of participating nations.

The said points imply a dramatic increase in power of the IMF and a massive usurpation of the wealth of tax payers of the United States to a distant, unelected, financial body, something that our founding fathers would find abhorrent.

5. "Create a Financial Stability Board with a strength and mandate to extend regulation and oversight to all systematically important financial institutions, instruments and markets..."

6 To endorse and implement tough new principles on pay and compensation and to support sustainable compensation schemes and corporate social responsibility for all firms..."

This implies that the decisions of an unelected foreign body will make decisions on rules, regulations and standards that will supersede those of our own regulatory bodies. Whether we agree or disagree that executive compensation should be curtailed is irrelevant; what's essential is that these are decisions that should be made by officials that are accountable (via free elections) to the American people. Allowing international organizations and bureaucrats to mandate our regulatory, fiscal and economic policies is a gross violation of our national sovereignty.

Mark my word, every single defect and undemocratic aspect of our own federal regulatory system will be multiplied 10 fold when they are superseded by distant, unelected global governing bodies. The waste and folly of our federal government will pale in comparison to that of the global government. And not surprisingly, the Obama Administration fully supports these disturbing developments.


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