A Fun Question about Poverty

[BigBallinStalin]

The WB, IMF, a banker, money changer, whatever, they are all middlemen. They produce nothing, they siphon off portions of actual wealth.

It's not conspiracy, it's just how the system is. How any system is when you are forced to inject a middleman into any process. If you can do without the middleman you are immensely better off. You have lower costs and you keep greater profits.

Okay. Say you want to get a loan for college. You need $40,000 over four years. Your family is poor, and you don't earn high income.

So, what do you do? You can borrow from the Evil Banker who charges a 10% interest rate. If your post-college future stream of income yields greater than 10% per year, then this exchange is mutually beneficial. No one has been exploited or made worse off.

So, you're wrong about loans themselves being exploitative and blah blah blah.

Whoa now, that's in no way illustrative of the terms of IMF loans. The IMF is on par with the local loan shark down the street.

If you have an issue with the IMF terms who decides the matter? An independent court branch? No.

If I have a problem meeting the terms of my school loan then I get sued. To be on par with the IMF then the judge in that case would have to be the people who gave me the loan in the first place. Which isn't the case in your example.

And as a condition of getting the loan was I obligated to follow the bank's menu on what to eat? Where to go? With whom to associate? With whom I could purchase goods or sell goods? No.

This isn't at all the case when the IMF comes to town, not by a long shot.

So if you are going to compare things, at least compare apples to apples, not apples to rocks.

Oh, okay, by "bankers, middlemen, and blah blah blah, and IMF," you only mean "the IMF." I'll try to predict your future positions next time I post.

[BigBallinStalin]

Okay. Say you want to get a loan for college. You need $40,000 over four years. Your family is poor, and you don't earn high income.

So, what do you do? You can borrow from the Evil Banker who charges a 10% interest rate. If your post-college future stream of income yields greater than 10% per year, then this exchange is mutually beneficial. No one has been exploited or made worse off.

And besides, being debt free is the new status symbol in the neighborhood. Something plenty of the college kids are going to learn the hard way.

It's a bad idea to get a loan to go to college. There are other options. Like working through school, saving for school, doing well and getting scholarships.
Getting a loan is not the only option.


But in the case of sovereign debt, what options are there when the creditors come knocking and you happen to be a dinky little country like Ghana with the likes of the EU, US and ANIC come knocking at your door?

Ha! You get a offer you can't refuse.

You're still ignoring the point about middlemen being productive and how borrowing to get larger future streams of income is wealth-maximizing (banksters somehow don't reduce overall wealth), etc.

[BigBallinStalin]

You can hold your fingers in your ear and cry out "LA LALALALALA CONSPIRACY THEORY" all you want BBS. You're talking theoretical and I'm giving you actual real world examples.

The World Bank and IMF go into poor countries with rich natural resources, exploit those resources and leave the poor country even poorer.

The actual results are seen since these things actually happen right in front of your eyeballs. I guess you oughta close your eyes as well so you don't see.

Read something useful like Easterly's White Man's Burden.

Yeah, that's a good overview of how badly the IMF stinks things up and how wrong they are. But they are helping!

I don't know if it's the IMF's goal to be thieves, I don't know if that's their secret mission. I only look at the actual effects of their interventions and it's plain old thievery in all it's glory. Is that what they were going for? I have no idea nor do I care. By accident or design, the end result is the same. A nation's resources get sucked up and the fruits of that bounty never reach the indigenous people.

It's the same story everywhere they go, even in Europe in the times they get their claws into someone <cough cough> Greece <cough> though Greece kind of brought it on themselves and it's merely amusing the debacle. In the third world it's just disgusting.
Cheating a con man makes one chuckle.
Cheating a poor man makes one sick.

So comment on Ghana then, it's matter of fact that the World bank and IMF went in for structural adjustment in 1983.
It's matter of fact that the supposed debt relief instead resulted in ever greater debt.
It's matter of fact that the newly privatized mining industry became more efficient but at the same time the proceeds from that greater efficiency evaporated under the terms of the IMF's debt relief. Ghana would have been better off just keeping their mining industry the same and modest profits instead of meager scraps.
It's matter of fact that Ghana fed herself until they were forced to end subsidies and instead buy imported and subsidized food.

If these things are matter of fact, then how could Ghana be so stupid to agree to them?

You should probably look into how actually benefited. hint for ya, it wasn't the average Ghanaian......

Another historic problem is that governments rich in oil didn't give a shit about the future (they heavily discounted the future value of their oil), so they agreed to pretty crappy deals with Western oil companies. Eventually, later politicians didn't like the earlier politician's short-sightedness, so they confiscated the Western oil companies' capital. The people may have rejoiced, but again that's short-sighted because such an act increases the risk of dealing with such countries (interest rates go up, i.e. exchanges with that country are more costly, thus that country has less opportunities to increase wealth).



Right, which is why I don't jump on John Perkin's crazy train.

[patches70]

The thing BBS either doesn't understand or doesn't acknowledge is that the WTO, World Bank and IMF together constitute the World Ministry of Finance.

They are a world ministry in everything but name. There is no such things as a World Ministry of Health*, or a World Education Ministry or anything else of the sort of thing as what these three bodies are.

The WTO, IMF and WB can dictate to other nations, make rulings, fine and punish, legally. That makes them in effect a ministry. Sure, they don't dictate to the US or EU so much, but they can find cases against them. Even little Guatemala won a judgement against the US a few years ago to the tune of some $4 billion.

The WTO has the Dispute Resolution Body which can even authorize sanctions on nations.

The IMF has the same type of structure as well for disputes. IF Ghana doesn't like how the IMF is going and wants to dispute the terms of it's agreements, then it's a branch of the IMF who hears and rules on that dispute.

This ministry can sanction rich or poor, strong or week. But there in lay the problem. Take Guatemala's won case against the US. What's Guatemala's trade deals with the US? The small countries really can't do much to the big rich countries.

And then between the big fellows, take the US and EU. They've had trade disputes. One famous trade dispute involved Boeing.
Does anyone know where Boeing's come from? If you said Seattle you'd be wrong!

Boeing's come from the Virgin Islands, a tax shelter. And that's the gist of the EU's trade dispute with the US concerning Boeing. Since the Boeing's ship from a tax shelter it gives them an unfair trade advantage and the WTO found in favor of the EU concerning this and authorized the EU to allow for a 100% tariff rate on Boeing's! Hahahaha!

But the EU hasn't implemented that. Why? Because the US tells the EU "Oh just hold on for a bit, we'll change the legislation". And that's been going on for a while. Oh, and the US had to pay the EU $4.5 billion.

But this is the ministry that has the final say in little nations like Ghana when it comes to the terms of their loan agreements. There is no higher body Ghana can go to concerning disputes in this realm.





*WHO, World Health Organization. It's not a ministry. It has no power to dictate.

[patches70]

BBS, I don't have nothing against loans. If someone wants to loan someone else money that's fine. I don't even have a problem with loan sharks. At least you know what you are getting into with a loan shark.

What is a problem is a lender who pretends not to be a loan shark. Now that's a problem.


There are times when it's appropriate to have a middleman. Sometimes important.

The whole crux of our conversation, BBS, is how nations with lots of natural resources are still poor. They shouldn't be, not if they are exploiting those resources properly.

There are all kinds of ways to properly exploit those resources, and those countries who have them and are still poor, well, they're doing it wrong obviously.

There are plenty of ways that said resources can be exploited wrongly, and using the IMF as a way of getting to those resources happens to be one of those ways.

So if you'd like to argue the validity and the usefulness of the IMF, the World Bank, then be my guest. You are good at reading from a textbook but applying that to the actual world seems a bit of a problem with you.

I can show that time and time again how badly things turn out with the IMF. Some claim it's by design, I don't know. All I know is that the track record is horrible and I have to wonder how it is that the IMF and WB can still be in business.

So please, enlighten me, what is the role of the IMF and WB? Provide examples of where they've fulfilled that role as well.

[mrswdk]

[quote"patches"]Greece kind of brought it on themselves and it's merely amusing the debacle[/quote]

So when it's a Western country it's amusing to hear stories of economic ruin, mass unemployment and people forced to abandon their babies, but when it's a developing country it's an outrageous scandal?

[patches70]

You can hold your fingers in your ear and cry out "LA LALALALALA CONSPIRACY THEORY" all you want BBS. You're talking theoretical and I'm giving you actual real world examples.

The World Bank and IMF go into poor countries with rich natural resources, exploit those resources and leave the poor country even poorer.

The actual results are seen since these things actually happen right in front of your eyeballs. I guess you oughta close your eyes as well so you don't see.

Read something useful like Easterly's White Man's Burden.

If these things are matter of fact, then how could Ghana be so stupid to agree to them?

You should probably look into how actually benefited. hint for ya, it wasn't the average Ghanaian......

Right, which is why I don't jump on John Perkin's crazy train.

I can't help but notice, you didn't answer the question. Are you planning to or are you just always obtuse?

Or should I just answer for you? Corporations benefit.
And that's all fine and dandy, corporations bring all the things I need and use everyday. But that doesn't keep me from seeing what the IMF did to Ghana, now does it? Apparently you need glasses.

[patches70]

So when it's a Western country it's amusing to hear stories of economic ruin, mass unemployment and people forced to abandon their babies, but when it's a developing country it's an outrageous scandal?

Absolutely. Greece cooked her books to get into the EU. She lied, lied some more and then lied again for good measure. All that misery is on the heads of the Greek politicians. They reap what they sow.


What did Ghana do to have her resources absconded with for pennies on the dollar?

[patches70]

You all know, Greece is under the thumb of the IMF right now. For the bailouts she had to implement austerity and state assets were sold off to pay for debts. There will be another bailout coming again for Greece later this year and of course a fresh cornholing.

As mrswdk points out, Greece is amid economic ruin and the IMF ain't gonna be able to help if that was indeed what they are doing. But Greece's people are figuring out how bad off they are.

From the Washington Post just today-
http://www.washingtonpost.com/world/gre ... story.html

and understand, it's a sad story with an ironic twist at the end.

The article is primarily about the Greek health care system. A particular couple, older couple in their late 60's. Paid their whole lives into the state insurance plan and got health care at little or no cost as the deal goes. A deal of which they held up their part of the bargain for most of their lives.
Unfortunately, the crash they blame on the reason why their little business went out of business. They couldn't pay their premiums and become uninsured.
Then the husband gets the bad news. He has intestinal cancer. They sell everything they have to get treatment and he then gets worse news. The cancer has metastasized to his liver. They can't pay anymore. As he says- "The cancer is beatable, the medical bills are not". He points out that he apparently has an expiration date.

But here comes the incredible part.

Greece's crackdown on tax dodgers has brought in some money apparently. So she is trying to set up a fund to help all the uninsured. With a 27% unemployment rate, there are a lot of uninsured people who just can't afford the premiums of the state run plan.

The Greek Health minister Adonis Georgiadis hopes to have the plan in place by the end of the year (in time for the poor guy?) but that the problems come from "years of mismanagement and corruption".
And here comes the crazy part. He said that emergencies were being treated at hospitals whether insured or not but-

illnesses like cancer are not considered urgent, unless you are in the final stages.

Now, I'm not even sure how to respond to that. Not urgent until it's too late?

I wonder, if Mr Adonis Georgiadis was diagnosed with cancer tomorrow, would he consider it urgent? I think he just might.

But there you have it. I can't blame this on the IMF, though they are like vultures chowing down on the carcass. Greece was not honest with herself, her citizens, the EU. But I can't help but remember the IMF stipulation for Ghana and their state subsidized system. What was it called? Oh yeah- "Full cost recovery". That's it.
Was membership in the EU worth this? I don't know.


Anyway, it's a bad day when the IMF turns it's gaze upon your nation. But worry not! Economists of the likes of BBS' (you know, the bookworms who say this model or that model is reality except it never goes that way in the real world as economists are often guilty of ignoring) say Europe has turned the corner! Yeah, ask Mr Nikos Solomos if he believes that. His cancer just metastasized to his liver and as far as the Greek government is concerned, it's not urgent.

But, this stuff happens. It's not like the global financiers caused the crash and the downturn in the global economy.....

[mrswdk]

Just had lunch. My friend from Ghana said two things:

- Ghana being pushed to drop its farming subsidies made it difficult/impossible for many farmers to get access to the fertilisers and pesticides that they had previously been using, causing Ghana's production of cocoa to plummet (and given cocoa's role in Ghana's economy, this meant the country got hit fairly hard).

- One of the reasons that tight controls were put on the money being given to Ghana was that the government had previously been guilty of seem pretty bad mismanagement of funds and lenders wouldn't trust the government sector without the introduction of stricter controls.

So I guess he has just given each of you a stick to hit the other with. Enjoy!

[mrswdk]

I have to say I found his mismanagement comment a little funny, given your earlier statement that you feel smpathy for poor, picked on African countries but find the plight of Greek citizens 'funny' because it was their government's fault that they'd ended up in that situation.

[smegal69]

correct me if I'm wrong but the top 2% of people in the world have more cash/assets and wealth the the bottom 50%. maybe top 4%.

USA spends more money a year on weight loss products than all of Africa speeds on food.

10 million children die every year from preventable diseases.

human greed will never be satisfied till we strip the world of all it's natural resources and wipe out the human race.

and the only thing i will agree with jefjef is this quote he has for his signature

"It would indeed be a tragedy if the history of the human race proved to be nothing more than the story of an ape playing with a box of matches on a petrol dump."

[BigBallinStalin]

You can hold your fingers in your ear and cry out "LA LALALALALA CONSPIRACY THEORY" all you want BBS. You're talking theoretical and I'm giving you actual real world examples.

The World Bank and IMF go into poor countries with rich natural resources, exploit those resources and leave the poor country even poorer.

The actual results are seen since these things actually happen right in front of your eyeballs. I guess you oughta close your eyes as well so you don't see.

Read something useful like Easterly's White Man's Burden.

If these things are matter of fact, then how could Ghana be so stupid to agree to them?

You should probably look into how actually benefited. hint for ya, it wasn't the average Ghanaian......

Right, which is why I don't jump on John Perkin's crazy train.

I can't help but notice, you didn't answer the question. Are you planning to or are you just always obtuse?

Or should I just answer for you? Corporations benefit.
And that's all fine and dandy, corporations bring all the things I need and use everyday. But that doesn't keep me from seeing what the IMF did to Ghana, now does it? Apparently you need glasses.

I've already answered this question by copy-pasting what I already said about that scenario and by saying, "Right."

[Lootifer]

So I should invest in Ghanian fertilozer companies?

[AslanTheKing]

for the worldbank the limit is 1 $ per day ,
so who earns more than 30 dollars a month is considered not to be poor anymore
16.66 % ( realise something in the number? the number of the evil
so 16.66 % of this worlds population is considered to be poor

in the US, whoever earns less than 1000 US Dollars per month is considered to be poor,
in the UK, anybody earning less than 1000 GBP per month is considered to be poor,
in Switzerland, after paying healthassurance and your rent and still after have less than 1000 Swiss Franks are " poor"
in Germany its 1000 € Euro per month

but dont forget , its not in the interest of countrys to have too many poor people,
since the economy needs them too, so the politicians make sure the people dont fall beneath that 1000 Euro

it is no secret that in germany , some companys pay very little per hour ( 3,4,5,6, euros)
and the people get the difference from the country, wich is called aufstockung here in germany

just imagine that , people get paid little so they can get money from the taxpayers, how ridiculous is that
and what do the companys do with the money they earned?
exactly they get richer, sponsored from taxmoney

how much per month is poor in your countrys, i like to know