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At UN, Stiglitz Slams Chase For Misuse of
Bailout, Federal Reserve for Predatory Lending
Byline: Matthew Russell Lee of
Inner City Press at the UN: News Analysis
UNITED NATIONS,
October 30 -- The $700 billion bank
bailout should not be used for mergers to increase market share,
economist
Joseph Stiglitz told the Press on Thursday. Following a UN panel
discussion
about the global financial crisis, Inner City Press asked Stiglitz
about
predatory lending and, as an aside, if he would consider the post of
Secretary
of the Treasury. While not directly answering the latter, Stiglitz said
that
the current Secretary, Henry Paulson, is ignoring the Congressional
intent of
the bailout and is allowing the funds to be misused by
the banks.
Stiglitz
specifically cited a conference call by JPMorgan Chase, in which an
executive
bragged that the $25 billion it is claiming from the bailout will make
Chase
"more active on the acquisition side or opportunistic side for some
banks
who are still struggling. And I would not assume that we are done on
the
acquisition side just because of the Washington Mutual and Bear
Stearns
mergers. I think there are going to be some great opportunities for
us to grow
in this environment." Stiglitz called that an abuse, and also took a
jab
at the Federal Reserve, which he said had the power to crack down on
predatory
lending since 1994 but did not. Video here,
from Minute 19:31.
Stiglitz at UN prior to meltdown and bailout,
One Laptop Per Child not shown
Flanking Stiglitz at
the press conference were Belgian
sociologist Francois Houtart -- who spoke against the "logic of capital
accumulation" -- and General Assembly President Miguel d'Escoto
Brockmann,
to whom Stiglitz and Houtart are two of 15
special senior advisers. The other
advisers include Slobodan Miosevic's lawyer Ramsey Clark and Noam
Chomsky, who
has denounced the UN for, among other things, supporting Indonesia's
invasion
of East Timor (Failed States, page 87).
Father
d'Escoto, a former Sandinista foreign minister of Nicaragua, spoke last
and
equated the United States' blocking of economic reforms with its
"dilatory
tactics" against attempts to end apartheid.
Afterwards,
Inner City Press asked Stiglitz about the International Monetary Fund's
predatory lending. Stiglitz said that the IMF has made its money of
late from
lending to countries in crisis, and thus has an incentive for their to
be
crises. He said that countries like Mexico, rather than going to the
IMF, may seek
capital from China, which has $1.9 trillion available, Stiglitz said,
or Japan
or India. He didn't mention the scandals surrounding IMF chief
Strauss-Kahn.
"There'll be a new President on January 20," he said, then was gone.
Footnote: a last
minute addition to the panel was
economist Calestous Juma, who close Inner City Press readers
may
remember as declining to characterize Ban Ki-moon's consolidation of
the Office
of the Special Advisor on Africa with another post, while encouraging
Inner
City Press to keep reporting on it. We have -- click here for
a recent story
about conflicts of interest and corporate entree by Microsoft into
the UN --
but were glad to see Juma in the Trusteeship Council chamber speaking
about
economic diplomacy, using a green and white "One Laptop Per Child"
computer. We note in closing that Microsoft, among others,
problematized the
idea of a $100 computer. Oh, intellectual property and corporate abuse.
Watch this site, and this Oct. 2 debate, on
UN, bailout, MDGs
and this October 17 debate, on
Security Council and Obama and the UN.
* * *
These
reports are
usually also available through Google
News and on Lexis-Nexis.
Click
here
for a Reuters
AlertNet piece by this correspondent
about Uganda's Lord's Resistance Army. Click
here
for an earlier Reuters AlertNet piece about the Somali
National
Reconciliation Congress, and the UN's $200,000 contribution from an
undefined trust fund. Video
Analysis here
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