G20 Breakdown

The bank tax idea have fallen off the G20 radar a bit with Canadian finance minister Flaherty’s ‘victory’ at the recent finance minister’s meetings. There is an uncritical sense in the news that Canada has won something big here by fighting the tax and getting some backing from other G20 countries, but not everybody agrees. Let’s do a brief rundown of who is celebrating and who is not.

Who’s happy

Canadian Banks
Domestic banks welcome global bank tax opposition

The Securities Industry and Financial Markets Association (SIFMA)
SIFMA Statement on IMF Bank Tax Proposals
This the central US/Can lobby association for the financial industry. Here’s their membership. And to get a better sense of them, they are also considering suing the Obama Administration for his own US focused bank tax proposal.

Canadian government itself
Canada’s banking system a G20 model: PM

And, in case you are wondering where strategy is clarified and decisions are made, it’s not Parliament, it’s here at the G8/G20 business summit Also see, the Chambers of commerce set agenda for G8/G20 summits

Who’s not

Walkom: Canada’s myopic approach to bank taxes‎.  “a financial meltdown anywhere in the globe can harm even the most virtuous of nations. Canada, whose entire manufacturing sector was zapped by the U.S. mortgage crisis, bears witness to that…if Canadian banks are as conservative as they claim, speculation taxes shouldn’t much affect them.”

G20 shuns bank tax: Jim Flaherty’s “victory” leaves taxpayers holding the tab. Excellent analysis from Mel Watkins

It’s time for high finance to come to the rescue.  If social and political pressure from around the world can build awareness of what this amazing initiative represents, much bigger players than Harper might make some real progress.

Bottom line: Canadian banks should pay their fair share. Financiers are economically and morally obliged to make a larger contribution to the cost of running our government.

1. A report from the G8 Halifax protest
Includes pointed criticism of the G8 and Harper’s narrowly focused approach to maternal health. “Where are the G8 leaders when women, many of them mothers, are raped, tortured, and/or killed at work, whether they’re working in Maquiladoras in Mexico or doing sex work in Vancouver’s Downtown Eastside?”

2. G8 development ministers are leaving Halifax without making any specific financial commitments for child and maternal health. The Harper government also hasn’t been very clear about what it plans or initiatives on that front. Non-funding of abortion is the only area where they have made their plans fully known.

3. Various questions and concerns have come up about the G20 pronouncement last week of recovery and growth:
G20 growth forecasts don’t add up

G20 wary of overconfidence; Greece cast long shadow

4. Excellent technical report by Andrew Jackson on prospects for the G20 in Toronto, found on the Progressive Economics website. He says that in a number of ways, panic has turned to complacency regarding global capitalism’s prospects.

At the G8 meeting in Halifax, Canada stated clearly that is will not be including abortion in its maternal and child health plans at the G8 meetings in Huntsville, including any funding of abortions. This could set off a potential impasse with other countries, including the U.S., which lifted the Bush administration ban on funding abortion in its development projects. The U.S., which is likely to tread lightly given its own highly organized anti-abortion groups, has said it will not cause a U.S./Canada split.

There is an excellent op-ed in the Globe and Mail today, taking the Harper government to task ‘bad policy’ on its maternal health initiative: “by refusing to fund abortions… the Conservative government is effectively saying only women who become mothers are worthy of complete health care…

It further argues that: “the maternal health initiative embeds these ideas in public policy. If you are a good woman, a woman who mothers, you will be rewarded with health care. If not, if you dare to be a non-mother, necessary health care will be withheld. In fact, the refusal to provide comprehensive health care to such a woman can be interpreted as punishment for being a bad woman.” Harper’s top-down do-good plans at the G8 seem more and more like a platform for his ideology.

I suspect there won’t be a lot done on maternal health when all is said and done in Huntsville, and there certainly won’t be any fundamental economic changes which are at the heart of poor health.

As I mentioned in an earlier posting, health care solutions (though they are important) that don’t acknowledge the sources of poverty and poor health are not nearly enough. Medicalized, band-aid solutions have been proposed for years, and poor health is as rampant as ever. But anything that might question globalization’s own role in this economic precariousness is surely off the G8 discussion table (and far away in another room).

1. Here is the text of the G20 Finance Ministers Communiqué
There is no mention of the bank tax, and they are quite high on how strong the recovery is and will be and the G20′s role in it. Some camps are questioning this, even the International Monetary Fund

2. G8 development ministers are meeting in Halifax, setting the table for the G8 in Huntsville. They will be discussing two key issues: child and maternal health. The idea is to keep on track the ‘Millennium Development Goals’ — which have a deadline of 2015 – which ‘involve reducing by two-thirds the number of children who die before they reach 5 years old and reducing the number of women who die while pregnant or in childbirth by 75 per cent.’ I am not sure how you do this following the globalization model, but, I digress.

3. Old movie studio to become temporary G20 jail. Now we know where they will be herding people.

4. Police Visiting Toronto G20 Activists: ‘Intimidation’ and ‘Harassment’ Claimed.

The proposed global bank tax, as expected, took up much of the space at the G20 finance ministers meeting on Friday, and it seems to be losing some steam, in large part because of Canada’s opposition and persuasion. It is really important to understand that the Canadian government is the number one opponent of the tax, and is using its clout as a country which didn’t bailout its banks in 2008, to push others to follow them

The Canadian Press reports the victory on the tax for Flaherty:

Federal finance minister Jim Flaherty scored a decisive victory on a global stage on Friday, convincing some fellow world financial leaders that a multilateral bank tax to ward off another economic meltdown was not the route to take.

Not only was there no agreement among Group of 20 finance ministers and central bank governors about the International Monetary Fund’s appeal for such a levy, Flaherty said, but he’d brought some of his colleagues onside during the daylong discussions.

“I won’t give you a count, that wouldn’t be fair; let’s just say there’s a significant number,” a smiling Flaherty said following a news conference alongside his South Korean counterpart.

A Toronto Star editorial says Flaherty is right in opposing it, stating that

“none of Canada’s banks failed during the 2008/9 financial meltdown, nor did any of them require a bailout… [and] there is a danger a special tax to build up a bailout fund could actually create an incentive for banks to behave recklessly, safe in the knowledge that they will be bailed out.”

Funny, but this is exactly why the Tobin or Robin Hood tax is the right one. Banks won’t act recklessly if they are paying tax on every one of these transactions. Much of the reason for the collapse involved massive amounts of trading on risky securities such as derivatives, so if you slow them down through a tax on each transaction, you have much better chance of stopping this recklessness.

Thomas Walkom, writing in the Toronto Star as well, backs the tax

Numerous civil society proponents of bank taxes are also pushing forth with their campaigns ahead of the G20 meeting, including Oxfam Canada and the At the Table campaign (of which Oxfam is a member).