By Bill Lindo
Belize City, February 10th, 2021: On Thursday January 28th 2021 two events occurred that signal either the end of our nation-state called Belize or the beginning of a New Just Economic Order. Our actions as humans made in the image of our Creator will determine our future.
First, in Belize the Senate ratified a Treaty – “Convention on the Recognition and Enforcement of the Foreign Arbitral Awards”— ending the little Independence Belize had left, and second at Davos, the international elites/oligarchy held their zoom conference on the future of their Great Reset/Green New Deal. This Green New Deal is why some persons were made Ambassadors; they work for the global elites, not Belize.
One of the hallmarks of independence is that nation-states rule themselves. No State, nor its judiciary and judges have any authority outside of their national borders. Put in simple English, no judge in Chetumal, nor Guatemala City can order any citizen of Belize to do anything in Belize. Their authority stops at the border. This so-called New York Convention is a colonial outgrowth of the imperial world order. It’s a fact of life that no third world nation-state nor citizen has won, and probably never will win a case in any foreign European, or American, and especially in any City of London Court. The “bacra man” always wins in his country.
George Price did NOT ratify the treaty. Manuel Esquivel did NOT ratify the treaty. Said Musa did NOT ratify the treaty. Dean Barrow did NOT ratify the treaty. Why? Because they love Belize and believe in the sovereignty and independence of Belize.
Remember — in Belize when the House of Representatives passes a law, the Senate says Aye. But it is NOT law in Belize until the Queen’s representative, the Governor-General signs. If a treaty is not ratified by the Senate that treaty has NO effect in Belize. Period.
Now let’s turn our attention to the second thing that occurred on Thursday, Jan 28th – the zoom conference of the global elites/oligarchy, the Davos crowd.
First, UN Secretary-General Guterres called for the end of National Sovereignty. He said that as the elites get their way, NGO’s, political leaders, bankers, and the corporations will all rule equally in the future. Of course speaker after speaker called for the Culling of the Herd (killing the masses of peoples) to save the earth from humans and for re-education of the masses to accept their coming enslavement.
Looking at the parading global elite at Davos, at Joe Biden’s executive order frenzy, and at the illegal impeachment trial of Donald Trump, you might be excused for feeling some measure of despair. Two things should rapidly make you change that response. First, the elite’s frenzy is driven by the fact that their financial bubble is doomed and thus their need for absolute control. Yes, for the last couple of weeks, the financial press have been sending smoke-signals of the coming collapse of the bubble because of the enormous debts that cannot be repaid. Debts always create a mess – either a jubilee or destructive austerity and sometimes – war.
But, Belizeans, we need to turn to the issue of money and debt to understand what is happening especially in Belize since the last general elections of November 11th 2021.
Many myths (lies) about money exists today especially in our backwards Belize. Sovereign money (coins and dollar notes) still exists in Belize but it is just about 30% or less of the supply of money in circulation. The bulk of money today is created by private commercials banks – Belize Bank, Atlantic Bank and Heritage Bank. Inquiring minds are asking why the sale of Scotia Bank has not been completed. Is it because the tax payers will pay again? The US Federal Reserve, the IMF, and the Bank of England (March 2014, 1st Quarter Publications) publically acknowledge that banks create or conjure money as debts out of thin air. Rather than do as governments have done for over ten thousand years, using their sovereign power over money creation as say Alexander the Great did, governments have become borrowers from the private sector. And if there’s a need for large scale spending for say a road or bridge or now with the Covid 19 mess, it’s expected that the government will borrow the money from the private sector or increase taxes, rather than create the money and thus pay no interest – free money. Remember that basing a money supply on debt creates economic, political and social problems.
Basing money on debt is socially discriminatory because not all citizens are in a position to take on debt. This has always tended to favour the rich or the most speculative risk-taker. The economic problem is that money supply depends not on production and distribution, but instead on various elements of society to take on more debt. Debt bubbles, and credit crunches are now more frequent. And the political problem is that creditors always try to capture governments.
This neo-liberal (handbag economics as British Economist Mary Mellor calls it) or (parasitic economics as American Economist Michael Hudson calls it) creates an impossible task for the private sector. It must create new money through bank-issued debt and repay it all with interest, where the interest is not created; and in addition, it must fund the public sector and generate a profit for its investors.
But when the privatised bank-led money supply gets into trouble, it is the money creating powers of the government (Central Bank) that comes back into clear focus. Recently, the 2007/2008 financial crisis was salvaged/rescued when the central banks created new money to bail-out the bankers in the process known as quantitative easing.
The burning question of our time is, if the state as represented by the central bank can create money out of thin air to save banks – why can’t that same central bank create free money to save the people?
Because of the myths (lies) about money we look at public spending and taxation the wrong way. Handbag economics assumes that it is taxation of the private sector that is raising the money to fund the government. Taxation takes money out of the taxpayers’ pocket or as Evan X use to say, the politicians put their hand in your pocket and legally take what they want. But the long history of money indicates that this is false to reality. In the same way banks can create money out of thin air to make loans, governments can conjure money out of thin air to fund public spending. Banks create money by setting up bank accounts, states create money by allocating budgets. So, please Messrs Politician, stop saying the government is broke. It can never be true by definition. Through its accounts in the treasury and the central bank, our government is constantly spending and taking in money. If it spends more than it takes in, it leaves more money in people’s pockets. This then creates a budget deficit or what we call an overdraft at the central bank. So what’s the problem? The state is not some dependent household. The government is the authority behind the money system. The ability by the banks to create money out of thin air derives from the government.
If one looks at the model of the accountant, the economy is abstract. Take for example a firm that produces steel. The direct costs such as limestone and iron ore (materials), machinery (saved labour) and labour are needed to make the steel. Profits emerge after deducting the direct costs from the sales. Then the overheads, the items that do nothing to produce the steel must be deducted. This is the age-old conflict of human society, between the producers and the free-loaders – the ones who skim off the top but do nothing to produce value. The higher the overheads of production in the firms, industry or society, the less is left to cover the costs of human labour and material and the machines to cause the production of steel from iron ore.
What is this overhead? The administrative costs of supervising, costs for promotion and sales ads, and the largest unnecessary cost is finance – payments to the bankers. Most will say that because modern society cannot operate without credit, the role of the banker and their fees and interest charges are necessary. But this is not really true. In a productive economy interest charges for agriculture, mining, and industry is about 3% on a reducing balance and 2% or less for infrastructure. In the ancient world of Eurasia, the Palaces of Persia, etc. interest charges were high, about 14%, but debts were periodically forgiven so as to assure the stability of society. This was also true in old Israel. This is why the Church especially, the late Pope John Paul II insisted on a Jubilee. This practice of cancelling debts in the Western world came to an end with the political murder of Julius Caesar. He had told the Roman Senate that for his Coronation as the First Emperor of Rome all debts would be forgiven. The assassination, made famous by Shakespeare, was the Senate’s response to his Jubilee.
What the Covid 19 pandemic has brought to the fore is the age-old question of who loses when business activity and employment are disrupted? Will it be the creditors and corporations at the top of the economic scale or debtors and renters at the bottom? In Belize this was decided on November 11th 2020. Regardless what the politicians say, the facts speak for themselves. The oligarchy of bankers and their corporate cronies won the November 11th 2020 general elections in Belize. The carpetbaggers (corrupt professional class) have been put in charge of the running the government. Nearly every board of directors has been populated with people who owe allegiance to the bankers and their corporate flunkies. The Foreign Service is now littered with people who work or owe allegiance to the oligarchy. Period. The Peoples United Party seems to have been captured by the creditors and their cronies.
The generals of the PUP and their supporters have been left in the cold. On February 5th 2021 the new government passed an amendment to the Central Bank of Belize Act to give permission to the Central Bank to create money to lend as cheap bail-out for the big boys because of the disruption caused by Covid 19. Of course, the carpetbaggers will say as their mentor Margaret Thatcher said, “There is no alternative”.
But, Belizeans, there is and has always been an alternative. History has taught us that economic disruption has always required a central authority to override “market forces” to restore economic balance. So-called “individualistic economies” cannot restore balance. These types of economies are always controlled by oligarchic forces especially the financial sector for its own interests in tandem with its symbiotic real estate sector and monopolized distribution sector. This is why every successful society since the Bronze Age (around 3,000 BC) has been a mixed economy. George Price knew this – that’s why he insisted on a mixed economy for Belize. The determining factor in whether or not an economic disruption (Covid 19 pandemic) leaves a crippled economy in its wake always turns out to be whether its financial sector is a public utility or is privatized with its attendant debt-strapped public domain as a means to enrich bankers at the expense of the debtors and the overall balance of the national economy.
The American System has always insisted on the financial sector as a public utility. In fact, the Creed/Philosophy/Bible of the Peoples United Party (PUP) insists that money creation and control is a public utility and should be under the control of the elected representatives of the people of Belize, certainly not the bankers cabal.
In terms of Covid 19 pandemic, look at Belize and then look at China. The differences are as stark as night and day. China is a mixed economy. Their leaders know that unless personal and corporate debts, rents and taxes that cannot be paid are forgiven/cancelled/annulled, the result will be widespread bankruptcy, homelessness and impoverishment. The leaders of China have demanded that debts accumulated because of lack of economic activity caused by the Covid 19 pandemic be cancelled or postponed. Here in Belize we are doing the opposite. Our bankers are insisting on collecting debts eventhough they cannot be paid. So, we changed the Central Bank Act to allow the bank to create monies at rates of interest of 3% or less to bailout the big boys so their projects become “bankable”. But the people? NO WAY. BTL Board is demanding payment of the 30,000 + who owe it.
Take the public sector workers, for many decades public employees accepted low wages in exchange for pensions. Their choice was to defer the demand for good wages in order to secure good pensions for their retirement. But now these Belizeans who voted for the PUP in the November 11th 2020 elections will see the money ostensibly saved for their pensions given by the government to the bondholders of Belize’s debts. And we all know that after March the public work force will be severely cut in order to pay the bondholders.
But it does not have to be like this. As I have written before, every successful economy on planet Earth has been a mixed public/private economy with checks on the financial sector’s power to limit the ways that it can impoverish that society. Always, the issue is who will control government. We know from history that as the society becomes more debt ridden it will become more oligarchic as our Belize has become.
But I will sound a note of warning to the carpetbaggers who act for the oligarchical forces. I know you are shameless and don’t care. Beware of history. What you are doing now in Belize is not new in history. In 1919, the oligarchy in Great Britain and France demanded that Germany not only pay its own debts but those of the allies as well. By the 1930s the result was Fascism, also known as Corporatism or Nazism. Germany, Italy and Japan’s turn to Fascism eventually led to World War II. To defeat this Fascism the Russian people gave-up 27 million of its population, the Chinese gave up 20 million persons, and the Jews gave up 6 million persons. The total dead in order to defeat Fascism in 1945 was 65 million lives. Nothing evil lasts forever. God is not dead.
Yes, Belize has lots of economic problems, but they are not without solutions. At least 65,000 workers of a possible 185,000 (35%) are without a job. Exports are down, but imports are also down as demand has collapsed in the wake of the Covid 19 mess. And most important, we have about 42,000 persons in Belize who need a “hand-out” from government so that they can eat and stay alive. Meanwhile, government revenues have fallen about 15% to 23%. This means that the typical $ 100 million dollar deficit in every budget year is now bigger. It is estimated at $ 300 million dollars now. In practical terms, the overdraft at the Central Bank will now go from $ 100 to $ 300 million dollars per year. This domestic debt is easily remedied. All Belize dollars are back-stopped by the Central Bank of Belize which is 100% owned by the people and government of Belize. Therefore, to address this domestic debt, or not, is a political decision – nothing else.
There is not only no need to fire or reduce the wages of government workers, but the PUP should at once start to think about the people, the common man and woman of Belize – the salt of our jewel. Create the 50,000 high paying jobs we promised them. The elites are quite capable of defending their own interests.
The National Bank of Belize must be empowered by depositing at least half of the government revenue or half-billion dollars in our own bank so that it can create at least $ 850 million a year in new loans for infrastructure, manufacturing, mining and agriculture. Nothing else. The commercial banks will never lend to these sectors, so let our Belizean bank do what it was set up to do – develop Belize[1] into a modern industrial nation-state.
Recently, one of the richest men in the world, Jack Ma of the largest e-commerce company, Alibaba, was floating an IPO for USD $ 32 billion dollars on the Hong Kong and Shanghai Markets for Ant a new company. The Chinese government stopped it. Jack Ma is the 20th richest man in the entire world according to Forbes magazine. The Chinese government of Xi said Jack Ma will NEVER be allowed to become more powerful than the people and government of China. If continued, Ant, along with Alibaba, Taobao and Alipay would gain monopoly status in China, and the little man would be crushed. China would not have it.
Many years ago, George Price did the same when the richest man at that time, billionaire Daniel K. Ludwig came to Belize to build a tree farm to make wood pulp. Mr Price ran him out of Belmopan. Later, the Brazilian government also drove him from Brazil because of his predatory practices. Years later, I asked Mr Price why he was opposed to Ludwig. He told me Ludwig was too big for Belize. He would have taken over the government and the Belizean people would eventually become his slaves. This is the mind-set of nationalists like Xi in China and George Price of Belize. China’s government is and will always be the ultimate creditor. No politically powerful banker will insist what policies the government and people of China will pursue. Politically powerful bankers should also not insist that the average citizen of Belize must lose and not themselves when there are “acts of God” like the Covid 19 pandemic.
Belizeans, until we break completely with the monetarist system of Wall Street, London and Market Square, and return to George Price’s and Alexander Hamilton’s system of credit, national banking and productive investment we will remain under the economic control of the Empire. So, Belizeans, we have two choices – George Price’s basically productive public financial American system or a British predatory financial system of London and Wall Street.
At the core of Hamilton, Lincoln, Price and this writer’s policy is the concept that wealth comes from the productive powers of labour, not from money, raw materials, land or any physical object. And that this must be through advances in science and technology which are driven by those unique powers of human creative reason. As I wrote in January, “Genuine development is an act of human creation – it is a complete change of our present culture – a reversal from hopelessness and hedonism to one of progress.
[1] See earlier editions of this blog on how I proposed the government create 10,000 jobs nationally and at least 1,400 jobs for Belize City per year.
Bill Lindo blog 