Warren Buffett, Islamic State, ABN AMRO bank

Listening to Saleas, I Paralia Ton Oniron Sou,
Love Dreams & Feelings, and
Live stin Tourkia sinaulia

Dutch television this 2015 Easter Sunday rehashed a potpourri of topics. Host Marcia Luyten spoke with journalist Tom-Jan Meeus, politician Halbe Zijlstra, Italian investigative reporter Loretta Napoleoni and Belgian author Tom Lanoye. I skip the last interview for practical purposes.

The Seattle Times on Warren Buffett exploiting the poor

Dutch journalist Tom-Jan Meeus reported how he had read an article in The Seattle Times about how Warren Buffett via his holdings in Clayton Homes exploited the poor (April 2, updated April 5). Sales tricks are being used that are similar to those that caused the collapse of mortgages and the housing industry in the onset of the current economic crisis. While Washington has been setting up new regulations to reduce or prevent such tricks, the lawyers of Warren Buffett would have been lobbying to have those regulations repealed or redrafted. If true, this report would surely taint Buffett’s image. The article appears to be a collaboration with the Center for Pubic Integrity.

Meeus also read a statement in The Washington Post by Tim Cook, CEO of Apple Inc., that “pro-discrimination ‘religious freedom’ laws are dangerous” (March 29). Such laws would enable devout adherents of religion X to only have business with people fitting their religion X. It would be a step back from religious tolerance. Meeus’s analysis was that Republicans had started this attack on tolerance so that Democrats might perhaps succeed in its defence, but the attack would rally so much conservative backlash that Democrats would surely lose the real battle on neoliberal economics. Compare abortus, euthanasia, gay marriages, and where this got the US in terms of economics.

The most amazing thing is that Dutch television deems it relevant to educate its viewers on American newspapers, and that tv journalism can be reduced to headlines and coffee table gossip.

Loretta Napoleoni on the Islamic State (min 17 – 33 in English)

There was an interview in English with Loretta Napoleoni on the Islamic State. This might perhaps be of value for foreign viewers too. I am not following the events on Islam and/or the Middle East, had not heard about Napoleoni before, and suppose that you will have when you have been following those events.

“Napoleoni holds an MA in international relations and economics from Johns Hopkins University, and a PhD in terrorism from the London School of Economics. For her work as a consultant for the commodities markets, she met often with officials of many Middle Eastern nations. Her latest book is Rogue Economics: Capitalism’s New Reality (…).” (Amazon.com)

In the present interview:

  • She compares the meaning of Islamic State for jihadists with the meaning of Israel for Zionists.
  • IS came up not only because the US left Iraq but also because of a combination of focused leadership and Salafist finance. Al-Qaeda curiously had a distant enemy America, and got George W. Bush and Tony Blair to invade Iraq that had nothing to do with Al-Qaeda, but IS focuses on local olicharchies and wants to take over now that both Saddam Hussein and the US are gone.
  • Fighting IS would only make it stronger.  The real challenge is to understand what is happening in the minds of young moslims, all over the world but especially in Western countries where they feel alienated.

This analysis fits my own: (1) that the West should get its economies into order, see the About page, and (2) that education on religion should focus on deconstructing Christianity. For Westerners there is little efficiency in first studying the complexities of Islam and then discovering that it is just another religion to deconstruct. It is more sensible that people familiar with Christianity start deconstructing this, and that people familiar with Islam take an example from the deconstruction of Christianity. The political divisions in the Middle East are complex too and the West better develops a sensible position of containment and economic development after the Bush & Blair crime against humanity.

Loretta Napoleoni 2014

Loretta Napoleoni 2014

Dutch politics and ABN AMRO bank (assets EUR 400 bn)

Marcia Luyten also interviewed politician Halbe Zijlstra on his views on (1) dictatorial regimes and (2) the public outcry on the salaries of the top management of the ABN AMRO bank.

Let me focus on (2). In the crisis since 2007 this bank collapsed and was nationalised in 2008 for around EUR 28 bn – presumably with losses for the Royal Bank of Scotland too – while its market value now might be around 15 bn.

The media last weeks reported:

“(Reuters) – The Dutch government will reconsider selling off ABN Amro Finance Minister Jeroen Dijsselbloem said, after senior managers agreed to give up a controversial pay rise that had stalled progress on the bank’s proposed share listing.

In the face of a widespread public outcry, the managers said they would give up raises of 100,000 euros ($110,000) each, which had been approved by the supervisory board for six members of the managing board, all but Chief Executive Gerrit Zalm.

Lawmakers, who must approve an initial public offering, had decried the raises as evidence that the bank’s management culture was still flawed. Dijsselbloem said on Friday he would delay privatisation until questions over the increase were resolved.” (Reuters 2015-03-29)

The following may help understanding the situation.

The Dutch People’s Party for Freedom and Democracy (VVD) has a neoliberal conservative ideology, with occasional strains of a proper John Stuart Mill type of liberalism, but mostly thinking like Reagan & Thatcher. Johannes Witteveen (1921), former director of the IMF, has been a life-long member of VVD, but stands on the sidelines now, with his advice of a different economic policy than the Dutch government has been following since the onset of the crisis in 2007.

For the power brokers of the VVD three names are relevant here:

  • Gerrit Zalm (1952), economist, former civil servant at the Ministries of Finance and Economic Affairs (1975-1988), director of the Dutch Central Planning Bureau (CPB) (1989-1994), where he started the censorship of economic science that this website protests about, minister of Finance 1994-2002, 2003-2007, one of the introducers of the euro, now CEO of ABN AMRO bank (assets EUR 400 bn).
  • Mark Rutte (1967), historian, currently prime minister of the VVD-PvdA coalition, and eventually he might move on to the European Commission, perhaps even succeed Jean-Claude Juncker – see Angela Merkel presenting him the Rathenau Prize he should not have received.
  • Halbe Zijlstra (1969), sociologist, leader of the fraction in Dutch Parliament.
Dutch neoliberal conservatives Zalm (1952), Rutte (1967), Zijlstra (1969)

Dutch neoliberal conservatives Gerrit Zalm (1952), Mark Rutte (1967), Halbe Zijlstra (1969)

In the interview Zijlstra claims:

  • Zalm would be out of the picture since his salary wasn’t raised: which is absurd since Zalm is the CEO who defended the raise, and thus is central in the picture.
  • Now that the board has erased the raise, everyone should maintain calmness and focus on the IPO: which is nonsense since the problem concerns the very mentality of the original raise.
  • The IPO would be important since a privatised bank increases competition while a nationalised bank is subject to more regulations from Brussels: which is disingenious since the currently discussed IPO concerns only 20% of equity, and the Dutch banking market is rather oligopolistic anyway.
  • Other models to restructure the Dutch banking sector are out of the question: which is manipulative since one can at least study such models before making a decision on content rather than on ideology. For example, see my paper Money as gold versus money as water.

While Zalm is an economist, he is not such a good economist, with no training in econometrics, and with a background in the civil service instead of economic research. He was appointed by politicians – minister Rudolf de Korte (VVD) – from the ministries into the CPB which should not have happened because of his lack of research background – just like is the case now with current director Laura van Geest. Zalm’s claimed success as minister of Finance is based upon the Dutch wage moderation policy, which is a beggar thy neighbour policy, with a structural surplus on the external account – see again the criticism by former executive director of the IMF Johannes Witteveen.

Zalm’s successors Rutte and Zijlstra are no economists, and thus must embrace the neoliberal ideology with the zeal of true believers – since they will not know what they are talking about economically.

For Dutch readers, my protest as an economic scientist against this situation w.r.t. Zalm is updated here. My advice is to boycott Holland, no bank excepted.

Overall conclusion

A recurrent problem in cases like these is that Dutch journalists will not inform foreign guests like Loretta Napoleoni and Tom Lanoye about my new economic analysis since 1990 that would allow the tackling of the Great Stagflation since 1970 and the current crisis since 2007. Napoleoni and Lanoye may think that their interviewer Marcia Luyten is competent and that Dutch tv is open and interesting – certainly when the Dutch pay attention to what they have to say – but hence they will not observe how very closed the Dutch mind actually is.

My advice remains: boycott Holland till the censorship of economic science is lifted.

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