Archive 1

by political parties union 'Concord Centre'Latvia Renewed 2010

RTFL Quote

It often happens that the universal belief of one age of mankind … becomes to a subsequent age so palpable an absurdity, that the only difficulty then is to imagine how such a thing can ever have appeared credible.…It looks like one of the crude fancies of childhood, instantly corrected by a word from any grown person.

John Stuart Mill, Principles of Political Economy (1848), preliminary remarks

RTFL Lecture

Latvia’s economy is structurally underdeveloped. Recent historical, ideological, and political factors have exacerbated Latvia’s economic crisis. Economic policy deployed since independence has failed to implement policies guided by the classical economic tradition that created prosperity in the Transatlantic region and East Asia. Instead, Latvia’s independence coincided with the ascendency of the now proven failure of neoliberal economic policy that accelerated its underdevelopment. These policies have functioned as an orthodoxy at the Bank of Latvia, guiding their development since independence. Moreover, asymmetries in power between it and Western nations in the European Union have prevented Latvia from always pursuing the national interest. Moreover, a local oligarchy has operated as full partners in the asset stripping and related activities under developing Latvia.

Martin Schulz, leader of the social democrats group of the European Parliament, gave a lecture on February 26, 2010, at the Stocholm School of Economics in Riga. The lecture is available on RTFL TV.

RTFL Interview

Prof. Michael Hudson, RTFL Core Group member, President of The Institute for the Study of Long-Term Economic Trends (ISLET) and Wall Street Financial Analyst, is interviewed by Pēteris Cedriņš. Interview is available on RTFL TV.

View full document

English | Latvian

Download full document

English | Latvian

Michael Hudson

Austerity is not the only option

2010.07.07 | Financial Times

Government cuts have shrunk the gross domestic product of Latvia and Lithuania by more than 20 per cent in two years, while wages in Latvia’s public sector have fallen by 30 per cent. The hope is that falling wages and prices will see economies “earn their way out of debt”, creating a trade surplus to earn euros that, in turn, can pay the debts that fuelled the post-2002 property bubble.

View full article

Latvia Renewed Conference

29 May, 2010, Baltic Beach Hotel, Jūrmala/Latvia

Michael Hudson on Latvia Renewed Conference:

The problem for this conference, is not to make an academic presentation. (That will be in the accompanying book of papers.) the aim is to outline financial laws and fiscal policy that Latvia needs to make it sufficiently competitive in today’s international markets to export enough to cover its imports and the cost of foreign debts run up to finance the capital investment that is needed.

The final product will be to outline a legal code and banking act, and to provide the logic to explain this legislation for Latvians to undertake a New Beginning.

The aim of the Latvia Renewed Conference is to draw up an economic constitution for how Latvia should have been structured originally in 1991 when it gained its independence, and needed to put in place an economy with sufficient competitive power to cover its import needs.

The program will discuss financial and fiscal reform designed to bring costs in line with basic necessary costs of production, minimizing unnecessary costs. What is to be minimized above all is the cost impact of taxation and economic rent, that is, prices that do not reflect any inherent cost of production.

My concern for THIS conference is to focus on financial and fiscal reform.

RTFL 10-Point Economic Development Plan

Working paper with copyright held by Michael Hudson

The Counter-Enlightenment, its Economic Program – and the Classical Alternative

2010.02.05 | Talk 2: Melbourne

The last few years have seen demoralized Social Democratic and Labour parties fall into disarray throughout the world. Retreating from the economic program that powered their takeoff a century ago, they have lost their traditional constituencies. Their golden age was an outgrowth of classical political economy from Adam Smith via John Stuart Mill to Progressive Era reformers advocating progressive taxation of land and other wealth, public infrastructure investment at subsidized prices, price regulation of monopolies, and public banking reforms to socialize the financial system.

Download full article

Max Keiser TV: On the Edge with Michael Hudson, Part 1

Max Keiser TV: On the Edge with Michael Hudson, Part 2

Mark Weisbrot

Latvia Shows the Damage That Far Right Economic Policy Can Do – With Support from the European Union and IMF

2010.01.15 | The Guardian Unlimited

RIGA, LATVIA – The signs of recession are more noticeable to those who live here – restaurants and coffee shops have lost most of their customers, and construction has practically ground to a halt. Emigration has soared.

Latvia has set a world-historical record by losing more than 24 percent of its economy in just two years. The International Monetary Fund (IMF) projects that 2010 will be another bad year, with GDP shrinking by another 4 percent. The Fund forecasts a fall of 30 percent from peak to bottom, which would surpass the U.S. decline during the 1929-1933 downturn of the Great Depression.

View full article

RTFL Statement

Issued 8 October, 2009

We applaud Prime Minister Dombrovskis considering, as RTFL members have long advocated, restricting, in the fashion of long-established law in the US, the right of banks to only receive the value of collateral (apartment or house) on loans for a primary residence. This would, in effect, prevent the establishment of a ‘debt serfdom’ in Latvia. While the consequences for the banks will be severe, they should have done their due diligence before extending what clearly were unsustainable debt burdens on their Latvian clients.

View full statement

Michael Hudson

Latvia’s Stockholm Syndrome

Latvia’s economy has been hijacked by the European Union and IMF policy directing that its tax policy and financial program be directed to benefit Swedish and other foreign banks. Latvian acquiescence is the equivalent of what psychologists call the “Stockholm syndrome”: identification of a hostage victim with his or her kidnapper. Latvia’s economy today is being held hostage to foreign creditors who have made bad loans and are now seeking to make Latvia’s government – its “taxpayers” – burden the nation’s future growth, even at the cost of destroying the economy’s already injured ability to grow and compete.

View full article: English | Latviešu

Michael Hudson’s Statement on his World War II Analogy

It has come to my attention that many Latvians were offended by my remark in my “Stockholm Syndrome article” about the human costs of neoliberal policies that “it almost seems that World War II was kinder to Latvia than what its politicians are doing to it today.”

Given the devastation the war wrought in Latvia, I can recognize why my “almost seems” remark was seen as insensitive. While this comment was hardly central to the article, my intention was to grab the reader’s attention and get them to think about the implications for current policy for the future of Latvia’s hard fought independence. Do they merely want to exchange one formal occupation for a financial one? There are other choices.

View full statement

Media coverage

NRA: Latvijas neatkarība ir nozagta!!!

TVNet/FinanceNet: M. Hadsons: Latvijas ekonomiku ir nolaupījusi ES un SVF

DELFI: Starptautisks eksperts: Latvijas ekonomiku ir nolaupījusi ES un SVF

Diena: Eksperts: Latvijas ekonomiku ir nolaupījusi ES un SVF

Tautas Forums: J. Paiders: ‘Latvijas neatkarība ir nozagta!!!’

Neoliberal economist reactions

Source: Morten Hansen's blog at Diena.lv

Morten Hansen: Michael Hudson – travelling snake oil salesman

» Michael Hudson: Reply

» » Morten Hansen: Hudson revisited

» » » Michael Hudson: Reply

» » » Michael Hudson: Reply to comment on Diena blog

» » » Jeffrey Sommers: Reply to Morten Hansen

Source: Vyacheslav Dombrovsky's blog at Politika.lv

Vyacheslav Dombrovsky: On "Stockholm Syndrome"

» Jeffrey Sommers: Reply

Hudson and Sommers Attempts to Avert the Crisis

LV: Latvijas plīstošais nekustamā īpašuma burbulis

EN: Latvia’s Bursting Property Bubble

Michael Hudson on Latvia's economic situation

View full interview

RC Version 0.12 with copyright held by RTFL

RTFL Public Health Report Latvia 2009

The World Health Organisation established a Commission on the Social Determinants of Health which concluded recently that with the shockingly simple words, 'social inequalities kill'. Vicente Navarro, professor of public health at the leading US Johns Hopkins University, has commented that this conclusion is important, but incomplete. Navarro says, 'it is not inequalities that kill. It is the people who benefit from the inequalities that kill'. In Latvia today, those have benefited from the unacceptable health inequalities generated by an unacceptable system of social inequalities, have much to answer for and should now be called to account.

View full report

Pēteris Cedriņš

On what Latvia was/is supposed to be

The Republic of Latvia first came into being because it promised social justice to everyone in Latvia. Free elections for all inhabitants, regardless of ethnicity, political persuasion, or national origin produced a constituent assembly that was determined to redistribute the resources that were available to a young country in a way that would allow this country to come into being, and that's the country that was ostensibly restored in 1991.

View full comment

Jeffrey Sommers

The Anglo-American Model of Economic Organization and Governance: Entropy and the Fragmentation of Social Solidarity in Twenty-first Century Latvia

Journal of Contemporary Central and Eastern Europe

Debatte, Volume 17, Number 02, ISSN 0965-156X, Routledge, UK, August 2009

The collapse of Latvia’s economy in 2009 and the protests that ensued raise fundamental questions about the results of the transition in Eastern Europe in the wake of the Soviet Union’s collapse. Explaining the significance of these events requires an analysis situating these developments into the global restructuring of the world-system that has occurred since the 1970s when the Bretton Woods Consensus and its model of accumulation and political organization broke down. This article endeavors to reveal insights about the recent unrest by embedding them within a broader political economy (both locally and globally) that articulates the connections between different regimes of accumulation and governance and their respective degrees of social solidarity.

View full article

Working paper with copyright held by Michael Hudson and Jeffrey Sommers

How the Neoliberals Bankrupted "New Europe": Latvia in the Global Credit Crisis.

Less than two years ago “New Europe” was hailed as the world’s new set of tiger economies, touted as providing Europe’s main engine of growth. These post-Soviet economies had the world’s fastest growing real estate and stock market bubbles. Thanks to their unregulated anti-labor business environment, their lack of workplace protection and labor unionization, and capped by a flat tax that fell almost entirely on wage earners and their employers rather than on property, the World Bank’s “Doing Business” report boasted that “Eastern Europe has overtaken Asia in ease of doing business.” Much like the Soviet historical materialists who earlier proclaimed themselves the wave of the future, neoliberal “free-market Bolsheviks” asserted the same for the post-Soviet economies. The latter became virtually an economic experiment – the most extreme since the Chicago Boys had a free hand in Chile in the mid-1970s.

Download full article

Latvia and Sweden at Historic Crossroads

2011.02.18 | Janis Urbanovics, Chairman of the Social Democratic Party “Concord” of Latvia

Today Swedish Prime Minister Fredrik Reinfeldt makes a historic visit to Latvia. Given Sweden’s special role in the Latvian economy, our bilateral relations have over the past years seen both ups and downs. Today’s visit provides a historic opportunity to open a new page and mutually commit to a new – more sustainable – model of bilateral cooperation within the framework of enhanced economic integration in the Baltic sea region. In order to discuss the possibilities of elevating our relations to a new quality, it is crucial that during this visit the parties, first, reach a common understanding on the causes of the Latvian economic crisis and its chosen recovery model, and, second – based on this shared understanding – ensure the solidarity and commitment from the Swedish side to help Latvia develop a new sustainable real economy structure.

Download | View

RTFL-TV "Procesi" #1

2011.08.27 | RTFL

Piedalās: Egīls Rutkovskis, Guntars Jirgensons, Armands Strazds

Diskusiju vada: Peteris Bankovskis