Would Socrates have asked: "Is the U.S. economy being 'latinamericanized?"

    Sometimes innocent sounding questions may elicit surprising and revealing responses. Maybe Socrates got it right in his question-answer philosophy.  Let’s try one: is the U.S. becoming ‘Thirdworldized?” Or, closer to home base: ‘Latinamericanized?”
    

    By now even the least informed inhabitant south of the Rio Grande knows that for decades foreign firms have been gobbling up businesses and land from Mexico to Tierra del Fuego. It is also almost folklore that every country in the area is trapped in an unending cycle of astronomical and un-payable debts, for which more debt is created in the vain attempt to pay them off.

      So what should we conclude when we read in the January 20 New York Times that last year foreign investors got a record $414 billion in securities stock in U.S. factories and properties?  

    Good old-fashioned financial giants, such as Merrill Lynch, the Citigroup or Morgan Stanley have sold multi-million dollar stakes to entities in Germany, Asia or the Mid East.
    The so-called Sovereign Wealth Funds (SWF) have put some $70 billion on the U.S. market over the past few weeks, according to Bloomberg.com. The SWF are giant pools of capital controlled by governments, which invest in private markets.
    None other than Frederick Kempe, president of the Atlantic Council, wrote quite optimistically in a recent Bloomberg column that:
 “Our economic problems will multiply without foreign investment and our continued openness toward it. International purchases of Treasuries not only help finance our national debt, but foreign-owned businesses employ some 5 percent of the U.S. workforce and account for almost 6 percent of output, 20 percent of U.S. exports, and 10 percent of all U.S. investment in plant and equipment. Beyond that, overseas companies pay wages 30 percent higher on average than their U.S. counterparts.”
    Suggesting that the present financial crisis somehow has its roots in the globalization of the world’s economy, he added: “SWFs are another sign of the dramatic structural shift sweeping the global economy that we can shape but not reverse. The U.S. share of world output will continue to decline, as will its portion of annual global growth. And that's for the best as billions of people embrace capitalism and global markets. If we can keep attracting foreign capital and access global markets, we'll continue to lead.”
    His conclusion sounded like a gentle chide with respect to Washington’s present policies:
“We still must press for global policy responses to avoid abuse. Unilateral action won't work, whether by us or our European friends. We should push for voluntary multilateral agreements that already are in the works.”
    So there you have the voice of an authorized financial pundit. But let’s get back to the dizzy  question at hand. According to Brian Williams of the NBC Nightly News, Citigroup and Merrill Lynch had to go shopping abroad for some $20 billion to stay afloat and ward of the surging mortgage crisis in the U.S.
       Who might some of the saviors be? Well, there’s the Saudi Prince, Awaleed bin Talal. His offer to boost New York Mayor Rudolph Giullani’s reconstruction efforts after the September 11 attack were turned down. But if you’ve seen Michael Moore’s movie, or watched the news, you realize that Saudi Arabia is on President Bush’s list of friendly nations. And then there’s Kuwait—which raises some other questions concerning why the U.S. invaded Iraq…Perhaps China should also be put on the list: despite its communist politics it has used its economic surpluses to bolster the Uncle Sam’s deficit ridden economy.
     Five million Americans now work for foreign companies, according to Deputy Treasury Secretary Robert Kimmitt, and since 2001 the U.S. has lost three million manufacturing jobs. Does that sound familiar? I mean if you live south of the Texan border?
    Then there’s the downhill spin of the stock market, as the U.S. eases into what is likely to be a hard-hitting struggle for the White House in next November’s presidential elections.
The financial outlook appears to be something like this:
    --A good part of the international financial community looks with tilted eyes towards President Bush’s tax rebate stimulus program, putting around $800 dollars in the hands of taxpayers in the hope that they will go on a spending spree capable of boosting the country’s sinking economy.
    --Even Wall Street is a buzz with talk about the possibility of getting financial help from abroad.    
    --Today’s interest rate reduction may be but the first of a series, aimed at there attracting foreign investment and making it easier to get credits (to pay off debts).

    Thus, we come back to the initial question: is the U.S. becoming latinamericanized, or is this but another process in the globalization of the world’s economy?

Who is going to be calling the cards from now on?

As capital goes bananas or seeks gorgeous profits will it concern itself with where the whole process is headed? Is this a rational process?

Will political and social organizations be able to put a reign on the appetite of profiteering financial institutions?

Is there no economic or social alternative to a system that ends up not only filling its own pockets but marginalizing the majority of the world’s population?

In view of the present industrial system’s roots in petroleum and its devastating effects on the environment, what will be the end result for the well being of the world’s ever growing population?