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Nomi Prins links uprising in Egypt to Western economics malpractice

Tony Wikrent's picture

The CIA on Egypt's Economy, Financial Deregulation and Protest

The ongoing demonstrations in Egypt are as much, if not more, about the mass deterioration of economic conditions and the harsh result of years of financial deregulation, than the political ideology that some of the media seems more focused on. . . .

That got me thinking about what else has been building up in Egypt under Mubarak's 29-year as President, but more specifically over the past decade, and in particular the years leading up to the world economic crisis catalyzed by the US banking system - and that would be, extreme financial deregulation and the increased influx of foreign banks, capital, and "investment" which tends to be a euphemism for "speculation" when it belies international funds looking for hot prospects, no matter what the costs to the local population.

According to the CIA's World Fact-book depiction of Egypt's economy, "Cairo from 2004 to 2008 aggressively pursued economic reforms to attract foreign investment and facilitate GDP growth." And, while that was happening, "Despite the relatively high levels of economic growth over the past few years, living conditions for the average Egyptian remain poor."

. . . .Around 2005, Egypt decided to transform its financial system in order to increase its appeal as a magnet for foreign investment, notably banks and real estate speculators. Egypt reduced cumbersome bureaucracy and regulations around foreign property investment through decree (number 583.) International luxury property firms depicted the country as a mecca (of the tax-haven variety) for property speculation, a country offering no capital gains taxes on real estate transactions, no stamp duty, and no inheritance tax.

But, Egypt's more devastating economic transformation centered around its decision to aggressively sell off its national banks as a matter of foreign and financial policy between 2005 and early 2008 (around the time that US banks were stoking a global sub-prime and other forms-of-debt and leverage oriented crisis). Having opened its real estate to foreign investment and private equity speculation, the next step in the deregulation of the country's banks was spurring international bank takeovers complete with new bank openings, where international banks could begin plowing Egyptians for fees. Citigroup, for example, launched the first Cards reward program in 2005, followed by other banks.

According to an article in Executive Magazine in early 2007, which touted the competitive bidding, acquistion and rebranding of Egyptian banks by foreign banks and growth of foreign M&A action, the biggest bank deal of 2006 was the sale of one of the four largest state-run banks, Bank of Alexandria, to Italian bank, Gruppo Sanpaolo IMI. This, a much larger deal than the 70% acquisition by Greek's Piraeus Bank of the Egyptian Commercial Bank in 2005, one of the first deals to be blessed by the Central Bank of Egypt and the Ministry of Investment that unleashed the sale of Egypt's banking system to the highest international bidders.

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Submitted by MontanaMaven on

I read klein's "Shock Doctrine" and Prins'"other People's Money", Perkin's "Confessions of an Economic Hit Man". Is this not obvious that the stupid but evil Milton Friedman film flam theories of economics have pretty much destroyed our planet? Friedman's idea was just repackaged feudalism. Will these bad ideas always prevail? That is the question.

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Submitted by Tony Wikrent on

(Reply to MontanaMaven )

Ian Welsh has had a few hard-hitting essays the past 2 or 3 years in which he points out that the rich have done very, very well. They have every reason to try and maintain the status quo.

Underneath the rich, are the top ten or twenty percent. They have done quite well, also. Remember, in the U.S. at least, all the gains in economic performance of the past 30 years has gone entirely to the top ten or twenty percent.

Now, looking at the bottom eighty percent, in the U.S. we find that about a third of them are hardcore conservative / libertarian dead-enders. The type who pine for the glory days of George Dubya Bush, and just seethe with hatred at the "socialist" now in the White House. As I observed in commenting on Numerian's comment on The Agonist (which Lambert linked to a night or two ago):

3) The elites in the U.S. have constructed and nurtured a socio-economic philosophy of economic Darwinism that openly promotes hatred of the poor and underprivileged, and worships mammon. I just really don't know, but I don't think there are other countries that include among its population so large, virulent and misguided a chunk of their population as American conservatives and libertarians represent. On this issue, the American Christian churches have been horribly and tragically silent; many have actually been corrupted and have turned their backs on the social teachings of Christ.

This last point, in particular, leads me to conclude that the possibility of a social upheaval in the U.S. is very unlikely. And rather than seeking to cleanse the churches of its corruption, and attempt to revive the tradition of militant social justice crusading that powered the abolition movement in the 1850s, and the Civil Rights movement a century later, leftists find a posture of militant atheism more congenial.

On the positive side, I entirely agree with Stirling Newberry's assessment, in Three Polar Politics In Post-Petroleum America:

For the Progressives to be in position to be the dominant coalition members in 2016 or 2020 -- that is, on the next pendulum swing -- and somewhere in the middle of the larger economic crisis that is coming, all that is needed is to grow, on average, 1% per year. That's it. This is approximately the rate that the public has shifted on the issue of equal marriage: 1% per year.

Submitted by lambert on

Shorter: "Slow politics."

* * *

On the churches, I don't see how I can falsely profess a faith I don't possess, no matter what the goal.

Submitted by JuliaWilliams on

I've found a wonderful congregation whose pastor has actually been heard (by me) to say things like (paraphrased) "it doesn't matter if you are young, old, black, white, brown, male, female, gay, straight, even an atheist, if you have love and respect for your fellow humans and wish for a better society" you are a valued member of the church(!) A visit there on Sunday does wonderful things for my psyche, I wish I could attend more.

Submitted by JuliaWilliams on

important to this congregation, and they walk the walk. No requirement to be a "believer". It is great for comaraderie and very hope-making, uplifting to see a church that is anti-war and not part of the MIC and it's propaganda machine. I like the energy and positive vibes I get, the sermons are absolutely revolutionary in message and my first experience there as a candidate for a "candidates meeting" was incredibly inspiring for me as a Green. So, belief in God isn't my reason for attending, it's a communal spark that helps me stay focused on what's important, but I realize that this is a very special group, not your average "church".

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Submitted by letsgetitdone on

this, Tony. Thanks for catching it and sharing it.

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Submitted by Ian Welsh on

but the sheer contempt rained down on religious folks by many on the left makes it hard to appeal to the better part of religion, which, actually, is there. The social gospel was a huge force in progressivism and liberalism.

Submitted by JuliaWilliams on

and when I say the sermons are "revolutionary", I mean that literally. I wonder how many churches are actually like that one? Maybe more than we know, thanks to, as you say, the general contempt the left has for religion (probably engendered by the fundamentalist's hijacking of the message).

Submitted by lambert on

I'm aware of the history and indeed have a family background of it. But I'm not going to treat a congregation like a social club by professing a faith I do not believe in.

It would be like going to A.A. except, ya know, for those pesky steps.