China Eliminated Poverty With Science and Infrastructure. It Can Be Done in Africa Too!

China's Long March Out of Poverty | African Agenda – A new ...
Deng Xiaoping, who put China firmly on the path of “reform and opening up.

August 14, 2020

If one examines the long path from the end of China’s disastrous “cultural revolution” in the 1970s to China’s 2020 modern miracle of eliminating poverty for 800 million Chinese, many lessons can be learned. China’s commitment to science and building infrastructure were two essential ingredients for this accomplishment.  William Jones discusses this interesting history in his article below,”China’s Long March Out of Poverty”.

China has announced its new rail construction program. The government plans to build 200,000 km of rail by 2035, about 70,000 of which will be high-speed rail. All cities with a population of 200,000 or more will be connected by rail, and all cities with 500,000 people or more will be connected by high-speed rail. China is also working on the next generation maglev train that could travel at speeds of 600 kph.

Pause for a moment from your daily activity. Let your imagination look into the future, and ponder what the nations of Africa would look like if, all cities with 200,000 people or more were connected by railroads. The topology of the continent would be different. China has proved it can be done. It is not a matter of Africa following the China model. Rather, it is comprehending the scientific principles of Alexander Hamilton’s economic system. Read my earlier posts: Alexander Hamilton’s Credit System Is Necessary for Africa’s Development and Nations Must Study Alexander Hamilton’s Principles of Political Economy

 

Click to access 45-54_4726.pdf

In his article below, William Jones provide an insightful analysis of the forces behind the anti-China mantra, rampant in the Trump administration.

As the ‘Five Eyes’ gear up to confront China, can anyone say that the British Empire is a thing of the past?

“A recent article published in the China Economic Diplomacy Watch pointed to the “Five Eyes” – the U.S., UK, Australia, Canada and New Zealand – as the key rallying group for Pompeo’s call for a containment policy toward China. The article has indicated a crucial element in the danger the world is facing. The unifying factor in this grouping is, firstly, that the “Five Eyes” are all English-speaking countries, and secondly, that they all at one time or the other belonged to the British Empire.”

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

IMF Conditionalities Contribute to Shortage of Health Workers: Africa Suffers

A nurse in Uganda is giving a woman an injection

July 14, 2020

IMF Conditionalities Contribute to Shortage of Health Workers

Lawrence Freeman

As I have told my friends for many years, the International Monetary Fund (IMF) is incapable of helping nations grow their economies. I do not believe the IMF can point to any success story, where its policies led to improving the standard of living of the population. Their macro-monetarist ideology fails to understand the essential driver of real (not monetary) growth. Following IMF prescriptions usually results in more suffering for the victim nation.  For a more in depth analysis read my article from last year: Africa Needs Real Economic Growth, Not IMF Accountants.

The report cited by the ActionAid and Public Service International highlights the failure of the IMF:  IMF Told Countries Facing Critical Health Worker Shortages to Cut Public Sector Wages The statistics are revealing, but should not be shocking to those of us who study physical economics. Throughout its history we have seen the IMF insist on cuts to meet to macro-economic goal at the expense of the population. This report clearly pinpoints the effects of tying loans to cuts back in healthcare. Africa was suffering from an acute shortage of healthcare workers before the COVID-19 pandemic. Sub-Saharan Africa has the fewest physicians per 1,000 population and the lowest number of hospital beds per 1,000 population.

It was pointed out by Ethiopian Prime Minister, Abiy Ahmed, earlier this year, that   payments of debt service equaled or surpassed the amount of money nations spent on healthcare.  He wrote “In 2019, 64 countries, nearly half of them in sub-Saharan Africa, spent more on servicing external debt than on health. Ethiopia spends twice as much on paying off external debt as on health.

African nations, or any country for that matter, should not be subjected to this kind of treatment. Human life is real and precious. Debt is merely a financial accounting mechanism. There is no equivalence.

The COVID-19 pandemic has revealed the failure of the world globalized financial system, which has been become decoupled from the real economy. Genuine economic growth uses credit to promote human life. President Franklin Roosevelt’s Bretton Woods system, in its perverted form, came to an end on August 15, 1971. For the last fifty years, the City of London-Wall Street centered financial system has become more corrupt each decade, serving the interest of a tiny few. Now is the time to launch a New Bretton Woods, dedicated to improve the conditions of life for all people of all nations. I will be writing more on this subject in the future.

Below are excerpts from the cited report:

“New analysis by ActionAid and Public Services International (PSI) reveals how International Monetary Fund (IMF) austerity policies restricted critical public employment in the lead up to the Covid-19 crisis. (emphassis added)

“The analysis, released to mark UN Public Service Day (23 June), shows that every single low income country which received IMF advice to cut or freeze public employment in the past three years had already been identified by the World Health Organisation (WHO) as facing a critical health worker shortage.

“Key findings include:

  • Of the 57 countries last identified by the WHO as facing critical health worker shortages, 24 received advice from the IMF to cut or freeze public sector wages.
  • When countries are told to contain wage bills – it means fewer doctors, nurses and frontline workers in countries already desperately short of medics.
  • All but one of the 18 low-income countries advised by the IMF to cut or freeze public sector employment funding, are currently below the WHO’s recommended nurse-to-population threshold of 30 per 10,000.
  • The WHO predicts that these countries will experience a collective shortage of at least 695,000 nurses by 2030.

“ActionAid’s 2020 report Who Cares for the Future: Finance Gender-responsive Public Services exposed the detrimental IMF loan conditions and austerity measures which have pushed 78% of low-income countries to plan for zero increase in public sector wages.

“When countries are told to contain wage bills it means fewer doctors, nurses and front line health workers in countries already desperately short of medics. This was a dangerous practice even before the Covid-19 pandemic and is unthinkable now.”

Read the full report: IMF Told Countries Facing Critical Health Worker Shortages to Cut Public Sector Wages

Read my earlier posts: 

VIDEO: Africa’s Healthcare Infrastructure Requires a New Bretton Woods

World Needs New Economic Platform to Fight COVID-19

New Economic Order Required to Combat COVID-19 in Africa

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

COVID-19 Tragedy Compels Revamping Globalization and Food Production

Dieudonne Twahirwa, 30, who runs Gashora Farm, examines chili plants at his farm in Bugesera District in eastern Rwanda on August 23, 2018.(Thomson Reuters Foundation/Thin Lei Win)
June 12, 2020

The article, Africa: COVID-19 Recovery Is a Chance to Improve the African Food System, reprinted below raises important issues concerning Africa’s food supply. The Covid-19 pandemic has revealed the failures of the global economic system. To wit: The gutting of healthcare in the so called advanced sector over the last half century left nations unprepared for what should have been expected, a new contagious zoonotic disease.  Nations that depended on thousand mile long supply chains for basic necessities, including medical supplies and drugs, proved to be disastrous for their populations. The absence of vitally essential products led to increased rates morbidity and mortality.

Tragically, Africa has been forced to devote large portions of its foreign exchange on debt service rather than building up its healthcare infrastructure. Adequate healthcare requires not only more hospitals, beds, physicians, and modern advanced equipment, but electricity, clean water, sanitation, roads, rail roads, adequate supply of nutrition, and elimination of poverty. A poorly fed population suffering from malnutrition provides an auspicious host for the spread of disease. Poverty is a co-factor of all diseases.

Last month, David Beasley, Director of the World Food Programme (WFP), warned that, if economic conditions continue to deteriorate and endanger the production and distribution of food to impoverished nations, we could witness famines in Africa, and other parts of the world. He said, “You could have 150,000 to 300,000 people die of starvation every day for several months.”

Africa has millions of acres of fertile but uncultivated land. The continent is reported to have over 60% of the world’s land lying fallow that could be developed for food production. It has been known since the early 1970s that the Africa continent has the potential to not only produce enough food for its own population, but could become a net exporter of food to help feed other nations.

The deadly COVID-19 pandemic has revealed what was there to see all along; Africa and large sections of the world have remained underdeveloped for decades due to the horribly defective policy of globalization.

To accomplish an agricultural revolution in Africa, we will also need to create an industrial revolution in Africa as well. The failure to industrialize Africa, to build manufacturing industries along with mechanized farming is a major contributing factor in reduced life expectancy, poverty, disease, and instability. The Physiocratic doctrine that all wealth comes from the land was efficiently refuted by President Washington’s Secretary of the Treasury, Alexander Hamilton.* The super productive family farms in the United States matured alongside manufacturing cities, and had access to abundant supplies of energy  for irrigation.

Let is use the tragedy of the COVID-19 pandemic to initiate a program to develop Africa’s full economic potential that will finally end poverty and hunger. To realize this absolutely achievable objective, we will need to create a New Bretton Woods System to drive economic growth. President Franklin Roosevelt intended the original Bretton Woods to be an institution to export his New Deal for developing nations, as was discussed with the Ethiopian delegation at the 1944 conference. Now, over a half century later we must realize this goal.

*Report on Manufacturers- December 5,1791

The World Food Programme has warned that the COVID-19 pandemic could cause one of the worst food crises since World War II. It predicts a doubling of the number of people going hungry – more than half of them in sub-Saharan Africa. While wealthier people stay inside and practise physical distancing, the economically marginalised populations risk going out in search of food. They take decisions between livelihoods and life in the most extreme cases. Such food inequities show the need for system-level action.

So far, the global food system has proven to be resilient to the COVID-19 pandemic. Food is still being produced, processed and distributed. Unfortunately, the system’s underlying injustices and inequities continue too. Around 1.58 billion people globally can’t afford healthy diets.

These inequities are especially stark on the African continent. Even before the COVID-19 crisis, the African food system was ailing. Food is perennially in short supply. In 2018, more than 250 million people in sub-Saharan Africa experienced severe food insecurity, incomes for farmers are lower than anywhere globally in real terms, and more than 30% of children are stunted partly due to poverty and poor diets.”

Read: COVID-19 Recovery: Chance to Improve African Food System  and Repositioning Agriculture for Africa’s Youth

Read my previous posts:

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

WFP’s David Beasley Warns of Potential Famines in Africa & Mideast Due to COVID-19

The COVID19 virus arrived in Africa weeks after it hit Asia, Europe and North America. But now, says Berkeley economist Edward Miguel, the virus poses grave risks for Africa and its 1.2 billion people. (AP photo by Patrick Ngugi)

The effects of COVID-19 on food supply chains in developing nations that are already suffering from hunger and acute food insecurity could be more deadly than coronavirus itself, according to David Beasley, Director of the World Food Programme (WFP). Speaking at the Atlantic Council in Washington DC on May 8, via teleconference, Beasley told his audience that, if economic conditions continue to deteriorate and endanger the production and distribution of food to impoverished nations, we could witness famines in Africa, and other parts of the world. “You could have 150,000 to 300,000 people die of starvation every day for several months—at a minimum,” he said. In a six-month period of time that equals between 27 to 54 million deaths. Beasley reported, as he did last month to the United Nations Security Council, that 821 million people around the world go to bed hungry and another 135 million are on the verge of starvation.

The fact that almost 1 billion of our fellow human beings are suffering from these levels of food insecurity is proof of the failure of globalization and an indictment of the current monetarist based financial system. With an abundance of fertile land, growing food and delivering food is a matter of investment in infrastructure. There are no valid objective reasons for any human being to go without food. The world needs a New Bretton Woods System, designed to lift all nations out of poverty, as President Franklin Roosevelt has intended. Nothing short of a global rebuilding of our world economy is required.

WFP’s David Beasley warns of dire famines in Africa, Mideast if COVID-19 supply chains damage continues

Watch video presentation below by World Food Programme Director, David Beasley 

A warning from the World Food Programme

Reuters published on May 7, a graphic report: Virus exposes gaping holes in Africa’s health systems, which quantifies the shortages in Africa of physicians, ventilators, intensive care beds and tests for COVID-19.  This deficit in healthcare infrastructure endangers millions of African, who are already suffering from food insecurity, poverty, lack of clean water, and lack of adequate electricity and other basic necessities of life. From March 30 to May 10, the number of COVID-19 cases in Africa has increased from 4,760 cases and 146 deaths to 64,214 cases and 2,344 deaths. That is an increase of 1300% and 1600% respectively in six weeks. If Africa is at the beginning of the  coronavirus curve, and the virus grows exponentially, as it has in other nations, then Africa will not be equipped to handle the magnitude of the crisis.

Read my earlier articles on COVID-19 and Africa

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

Today, More Than Ever, The World Needs Leadership Like Franklin Roosevelt

Franklin and Eleanor at the 1941 inauguration
Franklin and Eleanor Roosevelt riding in an open car, from FDR’s third inauguration. January 20, 1941. FDR Library Photograph Collection

April 15, 2020

I publish below, FDR: Leadership in a Time of Crisis, by my longtime friend and authority on American History, Nancy Spannaus, for two reasons. One, to commemorate April 12, the 75th anniversary of the passing of Franklin Delano Roosevelt, the 32nd President of the United States. More than just remembering a great President, we must look to his quality of leadership that the world desperately needs today.

Humanity is faced with the most profound crisis, possibly ever, with the pandemic COVID-19. We have witnessed the deaths of tens of thousands of precious souls, tens of millions of people forced out of work, the once hailed globalized supply chains disrupted, and fears of starvation in the developing sector, and possibly, in the advanced sector as well, in the not too distant future. The Bretton Woods financial system, which is already bankrupt, is on life support from the Federal Reserve and other centralized banks, and our “just in time” economy has failed miserably to weather this crisis.  The global lack of a sufficient-redundant healthcare infrastructure has proved murderous, and we are no-where near the end of devastation from this deadly virus.

Leadership should not just be left to our public officials, who have been deficient, in the last five decades, in creating a healthier economy for our planet of 8 billion people. Let us use this perilous moment of our civilization, to take the time, now, to reflect on what we must do, not only to survive this present crisis, but to guarantee a more prosperous future for all nations.

ReadWorld Needs New Economic Platform to Fight COVID-19

Read: New Economic Order Required to Combat COVID-19 in Africa

 

FDR: Leadership in a Time of Crisis

Read the entire Second Inaugural Address

The United States’ Economy and Culture Are Shrinking

The article below discusses the physical effects on the US population of the shrinking of America’s economy and culture over many years. The USA was founded on profound principles still valid today. However, the absence of quality leadership, and a population conditioned by news headlines has led to our decline.  America needs a statesman with a bold vision of the future and the will to implement it. Presently, neither exist.

December 1, 2019

Deindustrialization is Killing America

 

Nations Must Study Alexander Hamilton’s Principles of Political Economy

Hamilton Versus Wall Street: The Core Principles of the American System of Economics
Nancy Bradeen Spannaus iUniverse, Bloomington, Indiana, 2019, 222 pp. $13.99 soft cover, $5.99 e-book.

Hamilton Versus Wall Street: The Core Principles Of the American System of Economics      By Nancy Bradeen Spannaus

A Review by Lawrence Freeman-March 28 2019

For those followers of our beloved Alexander Hamilton and for those new to his writings, this book is for you. Nancy Spannaus, in her just-released book Hamilton Versus Wall Street, makes a unique contribution to the existing volumes written on Hamilton’s political and economic thoughts.  In her relatively short easy-to-read book, she weaves together Hamilton’s revolutionary ideas on political economy that served as the pillars for the creation of the United States, their legacy in the next two centuries of America, and their influence internationally. Throughout her treatise, Spannaus also provides constructive historical analysis of the battle inside the United States to adopt Hamilton’s concepts. This book is a valuable complement to Hamilton’s economic reports and will aid those unfamiliar with his seminal texts. *

Spannaus polemically begins by countering the popular myth that Hamilton was an agent for the banks (Wall Street) against the interests of the “little man,” agrarian society and the states, as espoused by Thomas Jefferson and others.  She later devotes entire chapters to Hamilton’s opposition to the British central banking system and Adam Smith, exposing another slander which alleged Hamilton was a supporter of the British aristocracy.

Principles of Political Economy

            Unlike like other publications on Hamilton that gloss over or give insufficient attention to Hamilton’s ground-breaking concepts of banking, credit, and manufactures, Spannaus makes a great effort to elaborate Hamilton’s contributions to: “The Core Principles of the American System of Economics.”  **

All nations would benefit greatly, if their leaders and citizens studied Hamilton writings. American culture would not be at the low level it is today, if my fellow citizens had been taught Hamilton’s economic theories, which in fact were crucial to the creation of our nation from thirteen indebted, agriculturally-based colonies. Advanced sector countries that are dominated by financial systems dictated by Wall Street and the City of London, and underdeveloped nations that rely on resource extraction and farming, because they lack a manufacturing sector, could learn a great deal from Hamilton.

However, Hamilton’s thinking about economic growth was not limited to the mere production of goods. He understood for society to continually increase the productive powers of the economy, the development of the human mind was essential. Spannaus quotes Hamilton: “To cherish and stimulate the activity of the human mind, by multiplying objects of enterprise, is not among the least considerable of the expedients, by which the wealth of the nations may be promoted.” (p. 28).

Friederich List, a student of Hamilton’s philosophy in the nineteenth century, wrote that “capital of mind, capital of nature, and capital of productive matter” are all essential components to achieve economic progress. (p. 29)

Hamilton’s First National Bank (courtesy ushistory.org)

The Constitution and Public Debt-Credit

Hamilton knew that for a nation to be truly sovereign, it must possess the means to produce the physical wealth necessary to maintain the existence of its citizens and their posterity. It is no coincidence that the Founding Fathers embedded this concept in the profound Preamble to the US Constitution. As Spannaus emphasizes, for Hamilton, the importance of establishing federal credit through the creation of the National Bank, stabilizing the currency, developing the manufacturing capability of the young United Sates, and increasing the wealth of the nation through internal improvements, was coherent with the intent of the Preamble “to form a more perfect Union.”

Hamilton used the “general welfare” clause of the Preamble to justify his revolutionary idea to create a public-private National Bank to consolidate the separate states and establish a unified currency to promote national economic growth. Generations later, in the footsteps of Hamilton, Franklin Roosevelt, who studied Hamilton’s writings, would also rely on the “general welfare” clause to garner support for his New Deal and other programs he initiated to revive the U.S. economy wracked by the Great Depression.  

Public Credit, anathema today to virtually all Democratic and Republican leaders, was another key concept Hamilton fought for, knowing that private sector funds and privately-owned banks would never adequately fund a nation’s economic growth, especially for large-scale internal improvements, i.e. infrastructure.

To emphasize the unique role of public credit, Spannaus lists four exceptional periods in U.S. history when the efficacious application of government-issued credit led to a pronounced expansion of the American economy. These are administrations of Presidents George Washington, John Quincy Adams, Abraham Lincoln, and Franklin Roosevelt. (p. 55-56)

In chapter 7, the author concisely summarizes Hamilton’s outlook: “…it is the deliberate increasing of the productive powers of labor through technology, improvements in infrastructure, and the use of government power to create credit that will produce value in the economy.” (p.128) This is more than good advice that all public officials. government leaders, and informed citizens should follow to secure a joyful future for their nation.

In Africa and other underdeveloped regions of the world where nations have suffered from hundreds of years of exploitation of their natural resources, Alexander Hamilton’s wise words should be fully grasped: “The intrinsic wealth of a nation is be measured, not by the abundance of the precious metals contained in it, but by the quantity of the productions of its labor and industry.” (emphasis added p. 1)

*Hamilton wrote four major economic reports for Congress and President George Washington between January 1790 and December 1791: Report on Public Credit; Report on a National Bank; Report on Manufactures; and Opinion as to the Constitutionality of the National Bank.

**This is the subtitle of Hamilton Versus Wall Street.

President Trump’s Non-African Strategy: Published in AU’s “Invest in Africa” magazine

Below is my article on President Trump’s Non-African Strategy, January 1, 2019, that was published (abridged) in the African Union magazine: “Invest in Africa“-2019 vol 1. You can find it on page 109 (129 on the link to the magazine). There are many worth while articles to read in this volume of the AU magazine  

 

 

Lawrence Freeman

January 1, 2019

After waiting almost two years for President Trump to articulate his policy for Africa, last month he unveiled his US-African Strategy, through the mouth of National Security Adviser John Bolton.  It should be called the Non-Africa Strategy because it has little if anything to do with the continent of Africa itself. Rather, it is essentially a geo-political tactic aimed primarily at China and to a lesser extent Russia. President Trump has put his stamp of approval on the age-old British inspired geo-political ideology that views foreign policy as a “global zero-sum game”-a world with only winners and losers among the super-powers. All other (lesser) nations are treated simply as movable pieces in their fantasy game. In other words, in this administration’s policy, Africa is a pawn on their geo-political chess board. Sadly, this so-called African stratagem shows no concern for well-being of the African people, doing nothing to improve the conditions of life on the continent, nor does it enhance US security.

Bolton explicitly attacks China’s new paradigm in foreign policy-the Belt and Road Initiative-while threatening African nations who do not support the US position on China and Russia. Blinded by their geo-political world view, the Trump administration displays disdain for the fruitful collaboration of China (primarily) with Africa nations in building vitally needed infrastructure across the African continent. In many cases constructing new railroads for the first time since the days of imperialist-colonial domination.

The Trump/Bolton policy has already failed from the start. It is too late to stop Africa’s momentum for economic development with its allies. However, if the Trump administration were more thoughtful, it would formulate a strategy to assist African nations in reducing their massive deficits in crucial categories of infrastructure.

Return to a Real American Strategy for Africa

The promotion of human life should (must) be the most important goal of all foreign policy. Human beings uniquely possess the cognitive-creative mental capacity to transform the physical universe. Only through new scientific discoveries by a sovereign human mind, can we ensure the continued material-biological propagation of our human race. Thus, the promotion of physical (not financial) economic growth, which sustains human progress, is the core of any competent “good neighbor” foreign policy.

Presidents John Kennedy and Kwame Nkrumah, Washington DC, March 1963

President John Kennedy was our last president who identified with and supported the development of the newly liberated African nations. His unique friendship with Ghanaian President, Kwame Nkrumah resulted in securing the funding for the Akosombo Dam on the Volta River which provided hydro-power for aluminum smelting and electricity for the people. This project stands as a monument today in Ghana (and Africa) in contradistinction to the El Mina slave dungeon, and other “slave castles” along Ghana’s coast.  We should remember that it was the African liberator, President Nkrumah, who was the very first Head of State invited by President Kennedy to Washington DC on March 8, 1961.  Four months later, the pro-African President invited Tafawa Balewa, the Prime Minister of the newly independent Republic of Nigeria to the White House.

Not one of the ten US Presidents following the death of Kennedy have emulated in practice his genuine concern for the advancement of the African people. However, President Kennedy was not original in his vision for Africa.

President Franklin Roosevelt famously scolded British Prime Minister Winston Churchill, during their war-time conferences, for Britain’s imperialist exploitation of Africa. He drove Churchill into an apoplectic fit, when he threatened to do away with British Imperialism and its eighteenth-century methods, after the war was won.

President Roosevelt expressed his vision for Africa’s development when told his son Elliott, that with the re-creation of a lake in the depressed flats in North Africa, “The Sahara would bloom for hundreds of miles.” He also reminded his son of the rivers which arise in Atlas Mountains and disappear under the Desert. “Divert this water flow for irrigation purposes?  It’d make the Imperial Valley in California look like a cabbage patch!”

This is the way US leaders true to our American System of economic progress used to think.

Africa’s Future

Africa’s population is projected to expand to 2.5 billion people in 2050- a generation and a half generation from now. The continent is well situated to become the center of world commerce, with its expanding population, vast tracts of arable land, and its abundance of natural resources. To secure this future, Africa needs trillions of dollars invested in infrastructure. There is no “zero sum” competition. Africa’s friends should cooperate in promoting the limitless number of infrastructure projects that Africa desperately needs. If, Africa and its allies fail to fully develop its enormous potential, and African nations are unable to productively employ and instill hope for a better future to the continent’s projected 2050 population of a billion young people, then we should anticipate perilously new levels instability and insecurity.

It should be obvious to all, including President Trump and his advisers that there will be no security without economic development.

It would be best for both the US and Africa, for President Trump to jettison this terribly flawed policy and advance a real American vision for the continent.  This should include collaboration with China on building transformative infrastructure such as the Transaqua inter-basin water transfer project to refurbish the shrinking Lake Chad.

Lawrence Freeman is a Political-Economic Analyst for Africa, and Vice Chairman of the International Scientific Advisory Committee to the Lake Chad Basin Commission

 

‘Investigate or Legislate’: What Will the Democrats in Control of the House of Representatives Do?

With control of the House of Representatives, the Democrats have the opportunity to provide leadership for the United States. They will have to decide. Do they want to make their primary focus attacking President Donald Tramp, by continuing their impotent investigation of his alleged collusion with Russia in the 2016 election? Or will they actually provide a vision for the future of the USA, by enacting bold new legislation.  Any attempt to impeach President Trump would be a farce that would virtually ensure the Democrats would be defeated in the 2020 presidential election.

President Trump has demonstrated that he lacks a comprehensive understanding of the scientific principles that created the USA. He has also displayed an unAmerican phobia to non-white foreigners from a multitude of countries arriving in the USA.  However, President Trump has distinguished himself in forming a close relationship with the President of China, Xi Xinping. He has also attempted to establish a working relationship with the President of Russia, Vladimir Putin. To the detriment of the USA (and the world) many Democrats, along with some members of his own administration, have adamantly opposed these positive initiatives by President Trump. President Trump has many shortcomings, but to his credit, he is not an ideologue, and he is not a devout follower of the geo-political doctrine on foreign policy. If President Trump took the audacious step to partner with China’s Belt and Road Initiative, the world could be transformed.

Important polices must be implemented now to provide for the welfare of our citizens, which will require bipartisan action in the Congress. For example. Both the Republican and Democratic parties have made verbal commitments to support a Glass Steagall banking reorganization, yet no action has been taken by the Congress or this administration. Another opportunity for bipartisanship would be the passage of legislation for a transformative infrastructure plan to rebuild the USA.

Below is a useful article discussing how President Trump working with the Congress could fund large-scale infrastructure projects. 

A New Opportunity for a National Infrastructure Agenda?

Nov. 7, 2018—One thing is definitive about the results of the U.S. mid-term elections: Neither political party put a solution to the country’s economic and financial disaster on the national agenda.  That doesn’t mean that many of the new Democratic members of Congress don’t have a strong commitment to address the economic crisis, however. They can potentially galvanize the veteran Congressmen into action. The question is, will competent, workable proposals be put on the table in the 116th Congress?

Statements from President Trump and the putative incoming House Speaker Nancy Pelosi in the immediate aftermath of the election were notable for addressing the possibility of bipartisan progress on infrastructure. Both statements were quite vague, however—and, as some will recall, Trump has offered cooperation on infrastructure before. One need only look at his current blackballing of the New York City Gateway project to see how hollow that promise was.

Rep. DeFazio in his campaign photo.

More substantive have been remarks from the incoming chairmen of two House committees. Rep. Peter DeFazio (D-OR) is expected to take over the Transportation and Infrastructure Committee. According to a Nov. 7 Reutersarticle, DeFazio is prepared to put forward his previous proposal for a $500 billion plan, which would involve issuing 30-year bonds, using funds from  raising gas taxes. He believes Trump would accept an increase in the gas tax.

“There has to be real money, real investment,” DeFazio said today. “We’re not going to do pretend stuff like asset recycling. We’re not going to do massive privatization.”

Rep. John Yarmuth (D-KY), who is slated to take over the House Budget Committee, addressed the infrastructure question a few days before the election, according to an Oct. 30 Politico Pro article. He said he would be making a proposal which “involves some very long-term bonding authority that would help finance an infrastructure bank.”

The Issue of Funding

The inevitable sticking point in Congressional discussions of an adequate infrastructure bill—which should ultimately amount to spending trillions of dollars to meet the infrastructure deficit—will be funding. President Trump has already indicated his preference for off-loading the cost to local and state governments, and proposes to even cut the Federal contribution from today’s 80% to 20%. That’s a formula for non-action. The Democratic plans have not been specific.

The danger lies in a potential “compromise” that pushes Public Private Partnerships (PPPs) as the solution to the funding dilemma. PPPs are presented as a means of reducing, or eliminating, public costs, by contracting with private companies to either build, manage, or both the needed element of infrastructure. The claim is that the private company can do the job cheaper and more efficiently, and the public will benefit.

Moving ahead on Gateway would be a good place to start.

Not so fast. First, some of the cheapness comes at the cost of labor—by violation of Davis-Bacon standards–and quality. Secondly, private contractors only enter PPP agreements on the guarantee that they will receive a revenue stream to cover their costs, and provide a profit. This can amount to tolls on a road, water bills for a water company, and the like. And if the stream doesn’t provide what the company considers adequate profit, what will it do?  Cut maintenance? Cut off people’s water supply? Both results have occurred! And they are unacceptable.

So, forget PPPs. The solution lies in taking the lead from Franklin Roosevelt and Alexander Hamilton. The Federal government has a unique capability (and responsibility) to create credit to modernize and rebuild our infrastructure. That credit can in fact be issued by turning current (virtually non-performing) government debt into bonds supporting an infrastructure bank, against which it would then issue new loans to help finance the long overdue infrastructure projects.  These would not only be short-term, but also long-term projects, such as the Gateway Project, California High Speed Rail, and the desperately needed water projects in the nation’s interior, for starters.  If the right projects are selected, the infrastructure constructed will pay back more to the economy in increased productivity than is expended–as well as creating millions of new, high-paying jobs.

For a modern proposal for such an infrastructure bank, click here

 

The Debate On China’s Role In Africa; A Different Point Of View

The Council of African Security and Development-CASADE has published my article regarding the debate over whether China is forcing African nations into a new ‘debt trap.’ Despite the propaganda from some Africans and Westerners, China is not the new imperialist in Africa. You can read my analysis below.

CASADE: COUNCIL ON AFRICAN SECURITY AND DEVELOPMENT