Wednesday, May 6, 2009

Swine Flu and Economic Meltdown

There is a connection between the economic meltdown that is bringing the economies of the world to their knees and the swine flu. The connection is deregulation. Many are now calling the swine flu the NAFTA flu because it is believed to have started on a pig farm in Mexico owned by the US pork giant Smithfield Farms. The first known case of the swine flu was in the Mexican town of La Gloria, near the farm. Hundreds of other people in that town were infected.

In 1985, Virginia-based Smithfield Farms was fined by the EPA for dumping toxic hog waste into the Chesapeake Bay. In 1994, soon after the North American Free Trade Agreement (NAFTA) was signed, Smithfield Farms moved its operations to Mexico, where it would not have to follow strict environmental regulations. This move not only cost the US jobs but may now have cost us our health.

The Smithfield Farms facility in Mexico is an environmental nightmare. A Mexican paper described it as, “Clouds of flies emanate from the rusty lagoons where the Carroll Ranches business tosses the fecal wastes of its pig farms.”

Deregulation similarly affected the financial industry in the US and brought down the rest of the world’s economies. It was the repeal of the Glass-Steagall act in 1999, a law geared to protect bank deposits from the speculative activity of investment bankers that contributed to the present economic crisis. It was congressional legislation forbidding the regulation of exotic financial dealings like Collateralized Debt Obligations(CDOs) and Credit Default Swaps (CDS) that put our economy at risk.

Yet, there has been no move to repeal NAFTA, reinstate Glass-Steagall, or outlaw CDOs or CDSs. Instead we ask working people to weather the flu and give our tax dollars to bail out the financial institution, so they can keep doing what caused the crisis in the first place. Instead of stopping the evils of unbridled capitalism, we ask state workers to accept layoffs, pay lags, and wage freezes. Perhaps its time to rethink these policies.

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