The Evil Axis of Finance: The US-Japan-China Stranglehold on the Global Future

Why, despite the existence of raft of potential international investment outlets, is a major share of global wealth and savings impelled toward a United States (US) Wall Street-centered casino ? Why has an increasingly gaping chasm crystallized between ever bloating global financial activities and the "real" world economy of production and trade? How is it that wealthy governments'injecting trillions of dollars into stumbling financial sectors across the globe is failing to create one new decent job? This book connects the dots linking the 2008 meltdown--and over a decade of dress rehearsals for it--to a rigged global financial game that is unraveling the very foundations of modernity. This game cemented US international dominance even as it simultaneously attained the status of world's principal debtor economy. In a nutshell, the rigged global game undergirding Axis power is that of dollar seigniorage. The US furnishes international money for the cost of running a printing press while the rest of the world produces goods and services, competing to push wages to the bottom to access those dollars. Select states, predominately Japan and China (though others as well), then store the surpluses they amass in dollar denominated savings. The US access to investment capital through little substantive economic effort, as it in fact incurs exponentially burgeoning debt, underpinned its seemingly out-of-this-world economic performance across the 1990s and early 21st century. The book deftly explores the set of momentous though largely unrecognized consequences for the global future which flow from this rigged game.

Richard Westra is Designated Associate Professor of Political Science, Graduate School of Law, Nagoya University, Japan. His recent books include: Political Economy and Globalization, Frontiers of Political Economy Series, Paperbacks Direct, and Confronting Global Neoliberalism: Third World Resistance and Development Strategies. He received his PhD from Queens University, Canada.

In 2006-7 through the darkest days of the 2008-9 meltdown into this second decade of the 21st century, waves of financial and systemic crises have swept the world. First came trillions of dollars in emergency first aid for "victims” - Wall Street's private multinational banks and financial intermediaries, insurance companies and mortgage lenders, as well as assorted non-financial multinational corporations. Second, the blame game: Was it the fault of snoozing regulators, rating agency conflict of interest, a "shadow banking system” of derivatives traders, delusions of ivy league "quants”, Ponzi-scheming criminals, or some combination of them? Third, were surveys of spreading mass public trauma: collapse of local banks, burgeoning personal debt peonage, increasing homelessness and spiraling unemployment in the US and elsewhere. ..But, as entertaining a read as the mélange of meltdown literature has been, the pages go blank at precisely that point where they should be elucidating what is really both the crux and the darkest side of the story. The task taken up by this book is to fill in those blank pages. Such an enterprise is most pressing because without crisp clarity on the real workings, actual purpose and endgame of what we blithely refer to as the "global economy” we will find ourselves being lulled into complacency by such widely acclaimed policy proposals as "small government”, "tax cuts”, "quantitative easing (QE)”,2 Basel III,3 EU bond issuance or combinations of these even partially ameliorating our abysmal current economic condition.The plain fact of the matter is that scholars and pundits alike have never stopped to ask, much less answer, a set of searching questions like: How did such an enchanted world come to pass where even after the US-originated 2008-9 meltdown, trillions of dollars of global wealth continue to be driven away from a myriad of other potential investment destinations and right back to a Wall Street centered casino? How are we to understand the very existence of such an ever bloating ocean of funds in economies, the centerpiece and forte of which across the past two centuries has been the production and satisfying of social demand for mass produced material goods? What if any is the relationship between the tides of money sloshing through Wall Street (along with global satellites in London, Zurich, Singapore, Tokyo, etc.), and the "real” substantive economy of production and trade?