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The Communist Party of Albania (CPA) is created at a conference of the main Albanian communist organizations, the Korca Group, Shkodra Group, and Youth Group. There are 15 Albanian communists and two members of the Communist Party of Yugoslavia at the meeting. A few months earlier, communist operative Dusan Mugosa arrived in Albania seeking help in liberating Miladin Popovic, a Montenegrin who leads the Provincial Committee of the Communist Party of Yugoslavia (CPY) for Kosova, from an internment camp set up by Italian forces in central Albania. Korca Group member Enver Hoxha led the successful rescue attempt and Popovic was asked to remain in Albania and the CPY agreed, also stationing Mugosa there. The CPA is formed on November 8 and a leaderless Provisional Central Committee is elected. The CPA pledges “to fight for the national independence of the Albanian people and for a people’s democratic government in an Albania free from fascism,” by armed struggle, united with “all the honest Albanians who want to fight fascism,” and promoting “love and close militant collaboration” with neighboring nationalities. The role of the CPY in creating the CPA will become an issue of contention. CPY sources and anti-communists will claim the CPA is created and run by Popovic. Hoxha will later say there is no interparty communication until 1942 and that Popovic will deny credit for the CPA in 1943 when Blazo Jovanovic, representing the Central Committee of the CPY, claims the CPY created it. On the other hand, CPA Political Bureau member Liri Gega will later say Popovic led the CPA, and member Pandi Kristo will say the two Yugoslavs created the CPA. Gega and Kristo will be in the pro-CPY faction after the war and lose their positions when Albania breaks with Yugoslavia. Koco Tashko, leader of the Korca Group, will later say he turned leadership of his organization over to Mugosa and Popovic. The CPA will later be re-named the Party of Labor of Albania. [Kola, 2003, pp. 25-27]
Entity Tags: Youth Group, Enver Hoxha, Dusan Mugosa, Blazo Jovanovic, Koco Tashko, Korca Group, League of Communists of Yugoslavia, Liri Gega, Shkodra Group, Provincial Committee of the CPY for Kosova, Party of Labor of Albania, Pandi Kristo, Miladin Popovic
Timeline Tags: Kosovar Albanian Struggle
The Balli Kombetar (National Front) party is created under Mit’hat Frasheri and advocates a united Albania, including the Kosovars. A British representative to Albania during WWII, Julian Amery, will say the Ballists are “for ideological reasons, inclined towards the Western democracies, but their enthusiasm for the allied cause was severely constrained both by hatred of communism and by fears that an allied victory might once again deprive them of Kosovo as well as their southern provinces.” The Balli Kombetar includes former government members, and the Communist Party of Albania will later accuse it of being a cover for the parliamentarians who had agreed to offer Albania to Italy’s Emmanuel III after it was invaded, among other charges. [Kola, 2003, pp. 29-31]
In Belgrade, Nako Spiru, Albania’s economy minister, and Boris Kidric, Yugoslavia’s minister of industry, sign a 30-year treaty unifying Albania’s economy with Yugoslavia. They agree to coordinate economic planning, make the value of Albania’s lek dependent on the value of Yugoslavia’s dinar, equalize prices (not based on international market prices), and create a customs union under Yugoslavia’s rules. According to author Paulin Kola, Albanian communist leader Enver Hoxha praises the treaty highly, while Hoxha will later say he had many reservations. According to the Albanian communists’ official history, the Albanian government and Hoxha think economic conditions make currency parity impossible to achieve on Yugoslavia’s schedule and they say Yugoslavia sets parity “on an altogether arbitrary basis to the advantage of the dinar.” Albania also has reservations about unifying prices. It says the customs union is set up to benefit Yugoslavia, later causing shortages and inflation in Albania. Joint companies are later set up based on the convention, and Albania will complain that it is providing the capital it promised, while Yugoslavia provides not “even a penny in the original funds” but still “appropriated half of the profits.” A joint commission to coordinate the economies is created, and the Albanian government says Yugoslavia tries to “turn it into a super-government above the Albanian government.” Yugoslavia is supposed to provide two billion leks of credit in 1947, but reportedly does not provide even one billion, and credit in goods is overvalued by two to four times more than their prices in international trade. Yugoslavia provides four factories, which Albania considers too small and decrepit. The Albanian government subsequently says that the withholding of promised credit hinders the economic plan for 1947, and Albania says that the 1948 credits are also lacking. [PLA, 1971, pp. 306-309; Kola, 2003, pp. 78-79]
Yugoslavia’s envoy to Albania Savo Zlatic requests a meeting with Albanian Prime Minister Enver Hoxha and Interior Minister Koci Xoxe regarding the views of the Central Committee of the Communist Party of Yugoslavia (CPY) on relations between the two countries. According to Hoxha’s later account, Zlatic starts by saying, “A general decline in our relations is being observed, and especially in the economy our relations are quite sluggish.” The Yugoslavs say disputes in joint enterprises are constantly being taken to an arbitration commission, that there is an improper attitude towards the Yugoslav advisers, and that Albanians are accusing the Yugoslavs of not fulfilling their obligations while being lax about fulfilling their own commitments.
Plans for a Balkan Federation - Zlatic says Yugoslav relations with Hungary, Romania, and Bulgaria are advancing much more than relations with Albania. Further, Zlatic says Albania’s draft five-year plan is autarchic, in going beyond grain growing and light industry, when the Yugoslavs can provide the products of heavy industry. Hoxha will later say that the Albanian leadership never intended to make their economy “an appendage of the Yugoslav economy” in the way Zlatic is suggesting, although perhaps Albanian Economy Minister Nako Spiru did when he signed an Economic Convention in Belgrade (see November 27, 1946). Hoxha says Spiru kept silent about any concerns he had. Hoxha will also later claim that Xoxe knew of plans for union between Yugoslavia and Albania, but he did not. Zlatic says “The present-day Yugoslavia is its embryo, the nucleus of the federation [of Yugoslavia, Albania, and Bulgaria],” and “In practice the ‘economic union’ is the federation itself.” The Yugoslav plan is to form joint military, culture, and foreign policies later, and include additional countries. The leadership should only talk about economic unification for the time being, Zlatic says, but “this is the best way for the rapid development of the relations of our joint economies,” which is a necessity for Albania. Therefore, Zlatic says, this is not Yugoslav “pressure” to unify. Zlatic says Spiru “put his trust in the advice of the Soviets” regarding the five-year plan, creating a “wrong, unrealistic, anti-Yugoslav and anti-Albanian” plan. Hoxha will later recount saying that the Albanian leadership sent Spiru to consult the Soviets and backs the plan. Yugoslavia calls for a strengthened Co-ordination Commission, as “a kind of joint economic government,” but Zlatic cannot give Hoxha details. The Yugoslavs have not allocated funds for Albania’s five-year plan, so Zlatic says there should only be a one-year plan for 1948. Scholar Paulin Kola will later write that Zlatic says Albania receives more aid than a republic of Yugoslavia and that Zlatic repeats the Yugoslav demand that Albania not make economic agreements with other countries without Yugoslavia’s approval.
Yugoslavs Accuse Spiru of Treason - Zlatic blames all of the problems on Spiru and his allies, while Hoxha expresses doubt and says Spiru is not in control. Zlatic says Spiru lied about Yugoslavia promising 21 billion dinars to Albania. Hoxha will later say that the Vice-President of the State Planning Commission, Kico Ngjela, verifies that the Yugoslavs promised the funding. Spiru is allegedly an “agent of imperialism” sabotaging Yugoslavia’s relations with Albania and the USSR. Hoxha requests Zlatic’s statements in writing, and Zlatic is evasive. Hoxha will later say the Yugoslavs’ real attack was on him, and that the allegations were a signal to Xoxe to try to replace him. [PLA, 1971, pp. 312; Hoxha, 1974, pp. 750 -753; Hoxha, 1982, pp. 353-373; Kola, 2003, pp. 89-90]
“The Brick,” a 500-page economic blueprint later used by Augusto Pinochet to formulate Chile’s economic policy, is drafted by a ten-man group, eight of whom had previously studied at the University of Chicago (see 1956). The group was put together by Orlando Sáenz, president of the National Association of Manufacturers, to “prepare specific alternative programs to government programs” that the military could use. Saenz took this step following a meeting between the heads of various Chilean businesses to discuss plans for toppling the regime of democratically-elected leader Salvador Allende as well as a suitable replacement. [Klein, 2007, pp. 70-71]
John Meriwether, formerly of Salomon Brothers, starts the process of collecting talented individuals to form a team to head a new hedge fund based on arbitrage deals surrounding government bonds. The “new” model will pull from George Soros’ Quantum fund tactics and high-level academic consultants to achieve possible gains in derivatives off fluctuations in the valuation of the government bonds. The fund will start with a $2-3 billion dollar investment fund, which, from its inception, will be managed by “some of Wall Street’s best traders and some of academia’s most influential minds.” [New York Times, 9/15/1993]
Yale economist Robert Schiller reflects on the genesis of the economic recession, tracing it back in part to policies pursued by the Bush administration for the 2004 presidential election effort. At that time, Schiller warned of a “housing bubble” caused by a plethora of bad loans and toxic debt, and called for re-regulation of the housing markets. His warnings were ignored. Schiller says: “The Bush strategists were aware of the public enthusiasm for housing, and they dealt with it brilliantly in the 2004 election by making the theme of the campaign the ownership society. Part of the ownership society seemed to be that the government would encourage home ownership and, therefore, boost the market. And so Bush was playing along with the bubble in some subtle sense. I don’t mean to accuse him of any—I think it probably sounded right to him, and the political strategists knew what was a good winning combination. I don’t think that he was in any mode to entertain the possibility that this was a bubble. Why should he do that? Attention wasn’t even focused on this. If you go back to 2004, most people were just—they thought that we had discovered a law of nature: that housing, because of the fixity of land and the growing economy and the greater prosperity, that it’s inevitable that this would be a great investment. It was taken for granted.” John C. Dugan, the comptroller of the currency since 2005, says he believes a lack of regulation caused the “housing bubble.” Dugan says: “A lot of mortgages got made to people who could not afford them and on terms that would get progressively worse over time, and that created the seeds of an even bigger problem. As the whole market became even more dependent on house-price appreciation, when house prices flattened and then started to decline the whole situation began to unravel. The question you have to ask yourself: Why did credit become so easy? Why would lenders make mortgages that became increasingly less likely to be repaid? Part of the answer is that there was a huge chunk of the mortgage market that was not regulated to any significant extent. The overwhelming proportion of subprime loans were being done in entities that were not banks and not regulated as banks—I’m talking here about mortgage brokers and non-bank mortgage lenders that could originate these mortgages and then sell them to Wall Street firms that could package them into new kinds of mortgage securities, which arguably could take into account the lower credit risks and still be salable to investors worldwide. Unfortunately, the theory was not in accord with the reality. Although they thought they had accurately gauged that risk, they too were in fact depending—when you get to the bottom of it—on house prices continuing to go up and up and up. And they did not.” [Vanity Fair, 2/2009]
John Boehner (R-OH), the House Minority Leader, calls on the Obama administration to implement a freeze on government spending, and for President Obama to veto a $410 billion spending bill. Boehner says recent spikes in unemployment figures are a sign of a worsening recession, and the only way to address the recession is to freeze government spending until the end of the fiscal year. He calls the spending bill, crafted in December with input from Congressional Democrats and Republicans as well as from the Bush White House, full of wasteful “earmarks” and “pork.” [Associated Press, 3/6/2009] Boehner introduces a resolution calling for the freeze in the House; it fails, even though all House Republicans present for the vote and eight Democrats vote for it. [Human Events, 3/6/2008] Two days after Boehner’s call for a spending freeze, conservative columnist David Brooks calls the proposal “insane” and blames the influence of conservative talk show host Rush Limbaugh for the idea. Brooks says that Limbaugh and the Republican Party is fixated on repeating a Reagan-era economic agenda. “The problem with them and the problem with Limbaugh in terms of intellectual philosophy is they are stuck with Reagan,” Brooks says. “They are stuck with the idea that government is always the problem. A lot of Republicans up in Capitol Hill right now are calling for a spending freeze in a middle of a recession/depression. That is insane. But they are thinking the way they thought in 1982, if we can only think that way again, that is just insane. And there are a lot of Republicans like David Frum… who are trying to say Reagan was right for his era, but it is time to move on. And there are just not a lot of them on Capitol Hill right now, and I think the party is looking for that kind of Republican.” [Huffington Post, 3/8/2009]
The Group of 20 (G20)‘s pledge to return balance to the world economy may place the US dollar in a precarious position in the long run, experts feel. Over recent weeks, the dollar has fallen 4.3 percent this quarter because of equity market weakness as well as emerging major currencies as other countries begin their recovery from the worst economic downturn since the 1930s. Some G20 meeting attendees see the dollar as susceptible to damage while questioning its stability as well as its status as the global reserve currency, although the recent weakness of the dollar is not being blamed on the weakness of the US economy. Analysts say that short-term effects to the G20 meeting of other wealthy, developing economies will be subdued; however, they say that over a longer period, bank stocks and energy prices as well as the dollar may be harmed by G20 economic balancing actions. World leaders have expressed concern that the US economy’s recovery cannot be sustained because its rebound is due to government stimulus and increased borrowing. During the meeting in Pittsburgh, the leaders agree that to balance the global economy, the US needs to save more while the massive exporter China needs to consume more to support its growth. David Gilmore, partner at FX Analytics in Essex, Connecticut, explains, “The real problem is the world needs a huge consumer and the US has been basically doing it for decades, and now it’s spent.”
US Dollar as Reserve Currency - Robert Zoellick, president of the World Bank, says the US should not take the dollar’s status as the key global reserve currency for granted now that other options are emerging. Zoellick says that shifting global economic forces reveal that it is time to prepare for growth to come from multiple global sources. Although the world’s largest economies also agree to phase out subsidies on oil and other fossil fuels over the “medium term” to combat global warming, they acknowledge that the phase-out probably will not affect energy markets in the short term. In the long term, they say, the move could weigh on energy markets, cutting fuel demand in emerging markets. As for emergency economic support, G20 leaders promise to continue support until recovery is “at hand,” thus providing some relief for foreign currencies.
Economic Rebalancing Equals Shift from Dollar as Reserve Currency? - Global economic balancing is a two-edged sword for the dollar because the currency has been damaged by extremely low interest rates and the glut of dollars in the international monetary system. But the recession already has triggered partial rebalancing as US consumers cut spending while China spends $600 billion to stimulate its economy while making itself less dependent on exports. Analysts quickly note that minus tangible steps, the pledge only serves as lip service. The analysts also say it is improbable that countries would bend to G20 rules on how to run their economies. Nonetheless, the plan would be a clear shift, signaling a move away from the dollar. Currency strategist Kevin Chau of New York’s IDEAglobal says: “In the long run, I think they want another reserve currency, whether it’s the Special Drawing Rights or the Chinese yuan. For any country’s currency to gain that kind of credibility and trust, it would take years of development.” Still, last week, the dollar fell to a new low against the euro and even dropped below the key 90 yen-per-dollar level. [Reuters, 9/27/2009]
A report by the Edison Electric Institute (EEI) finds that within a decade or so, solar energy and other renewable distributed energy resources (DER) could lay waste to the utility business model and to American power utilities. The utility business model, which has remained relatively unchanged since the early 20th century, is not capable of coping with the “disruptive challenges” posed to it by solar and other renewable energy power generation. David Roberts, a staff writer for the environmental news publication Grist, will write of the EEI report in April 2013: “It is one of the most prescient and brutally frank things I’ve ever read about the power sector. It is a rare thing to hear an industry tell the tale of its own incipient obsolescence.” Standard power utilities are “regulated monopolies,” which means they are the sole providers of power in their service areas. The business model relies on the utilities selling power as “overseen” by public utility commissions (PUCs), which control what utilities can charge for their power. Inexpensive solar (photovoltaic, or PV) power “eats away at [that business model] like acid,” Roberts writes. Solar power is not regulated for the benefit of the utility companies. In simplistic terms, a kilowatt-hour (kwh) of solar energy generated by, say, a rooftop solar array is a kilowatt-hour of reduced demand for the utility. Solar power peaks each day at noon, usually the time of most intense sunlight, which is one of the power utilities’ “peak load” times. Power utilities make much of their profits from peak load electricity, as they charge more per kwh for peak load electricity. Roberts writes, “[W]hen solar panels provide peak power, they aren’t just reducing demand, they’re reducing demand for the utilities’ most valuable product.” The EEI report also challenges the myth that power consumers must rely on grid power and not solar power because solar power is not available when the sun is not shining. Battery storage, micro turbine, and other developing technologies are making it possible for many consumers to go entirely “grid free,” to opt out of grid-generated electricity entirely. Duke Energy CEO Jim Rogers says, “If the cost of solar panels keeps coming down, installation costs come down and if they combine solar with battery technology and a power management system, then we have someone just using [the grid] for backup.” If a large number of consumers begin generating their own power and using the grid for backup alone, the EEI report says, the utilities face “irreparable damage to [their] revenues and growth prospects.” Utilities generally anticipate revenues that allow them to invest heavily in fossil fuel plants that will not recoup costs for 30 years. Those investments could be more difficult to recoup if consumers begin generating their own power via solar and other DER power sources, leading the utility companies to contemplate raising the rates of those consumers who do not opt out of grid-based power. The EEI report states: “The financial implications of these threats are fairly evident. Start with the increased cost of supporting a network capable of managing and integrating distributed generation sources. Next, under most rate structures, add the decline in revenues attributed to revenues lost from sales foregone. These forces lead to increased revenues required from remaining customers… and sought through rate increases. The result of higher electricity prices and competitive threats will encourage a higher rate of DER additions, or will promote greater use of efficiency or demand-side solutions. Increased uncertainty and risk will not be welcomed by investors, who will seek a higher return on investment and force defensive-minded investors to reduce exposure to the sector. These competitive and financial risks would likely erode credit quality. The decline in credit quality will lead to a higher cost of capital, putting further pressure on customer rates. Ultimately, capital availability will be reduced, and this will affect future investment plans. The cycle of decline has been previously witnessed in technology-disrupted sectors (such as telecommunications) and other deregulated industries (airlines).” In other words, as consumers begin to opt out of grid-based power consumption, and utilities raise their rates to compensate for the loss of revenue, more and more consumers will opt out, further shrinking the number of consumers paying the utilities to generate their electricity. Even small numbers of consumers using rooftop solar strikes at the utilities’ main profit centers (one reason why German utilities are already feeling the pinch). Currently, less than 1 percent of US electricity is generated by solar arrays. But a projection by Bloomberg Energy Finance forecasts that in some areas of the nation, up to 10 percent of power load will be generated by solar arrays. The EEI report speculates that utility consumers in those areas will see massive increases in their rates as the utilities compensate for the lost revenues. [Kind, 1/2013 ; Grist Magazine, 4/10/2013]
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