Global economic crisis deepens

Apologies for the lack of new material on here recently. I've been writing stuff, but stuff that may be published elsewhere so can't be published here for the moment. Normal service can resume now though, in any case.

The global economic crisis continues to deepen and, together with the Iraq war, will almost certainly now be one of the two defining historical events of this decade. My understanding is that we haven't begun to feel the real effects of this downturn, the potential extent of which is now becoming quite scary. One particularly worrying aspect is that policymakers are so wedded to the neo-liberal economic doctrine that caused the crisis that they may simply be intellectually incapable of contemplating the clean break with the past that now is so clearly necessary. That is to say that, even if the policy tools were available to haul us back from a true calamity (and it is not clear that they are), there is little certainty that those responsible would be willing to use them in any event.

Larry Elliot, the Guardian's excellent economics editor, says that any market rally in the next few months could be deceptive. Governments and central banks are trying to kick start economies by slashing interest rates, printing money and unveiling stimulus packages, which could boost things for a while, but without addressing the fundamental problems of a global economy organised largely on neoliberal lines, any recovery would only represent a "sucker's rally": a brief interlude in an long downward spiral.

One indication that the Thatcherite/Reaganite ideology of the "free market" is being clung to more tightly that ever in some quarters, even in the face of its epic failures, is the sharp spike in sales of Ayn Rand's 1957 book 'Atlas Shrugged', "a hymn in praise of radical individualism, extreme self-interest and laissez-faire capitalism", the Guardian reports. The book - describing how an economic elite, unappreciated and exploited (!) by the feckless masses forces, society to face the consequences of its ingratitude - no doubt offers considerable psychological comfort as bedside reading for some members of the real-life elite that wrecked the world economy and that is now, outrageously, finding itself comparatively unpopular as a result. "What these uppity proles fail to appreciate", mutters the hedge fund manager as he flicks gratefully through Rand's tome, "is that without the rare skills and sober management provided by my particular class of person, the world might well experience serious economic difficulties".

Delusions, by definition, do not respond to any weight of counterveiling evidence.

The Guardian's report continues...

""People are starting to feel like we're living through the scenario that happened in Atlas Shrugged," John Campbell, a Republican congressman who gives copies of the book as gifts to his interns, told the Washington Independent. "The achievers are going on strike. I'm seeing, at a small level, a kind of protest from the people who create jobs ... who are pulling back from their ambitions because they see how they'll be punished for them.""

Won't somebody, please, think of the bankers?!

"As of yesterday, the book's 30-day average rank on [Amazon] was 110, far above its average rank of 542 over the last two years. On 13 January it even briefly outperformed Barack Obama's wildly popular work The Audacity of Hope. Yesterday it was in 55th place"

Noam Chomsky describes Rand, with her hatred of altruism and mutually-supportive societies in general, as "one of the most evil figures of modern intellectual history".

Possibly the best piece of analysis I've read on the financial crash is this paper by Dan Hind, author of the excellent "Threat to Reason". Hind situates recent events in the context of the Thatcherite/Reaganite economics pursued over the past 3 decades to provide a deeper and more substantial explantion of the current crisis that most commentators have managed to present so far. Hind's an entertaining and engaging writer, as well as a sharp and critical analyst of modern politics, so give his paper a read if you get the chance. This is the sort of clear and critical thinking that the people purchasing Rand's book are so desperately trying to avoid, in their own self-serving way; but that's "rational economic man" for you.

From time to time, I like to plug the website of the gifted essayist Tom Engelhardt, which hosts a consistent stream of thoughtful, well-written and informative articles on world politics and economics from a variety of top-quality writers. Some great pieces have appeared there recently on the economic crisis. Steve Fraser takes us back to the Great Depression of the 1930s to recount the backlash felt by the crooked financiers of that era, and to ask when a similar reckoning will take place in the present day. Chalmers Johnson points out that when the US government is spending trillions of taxpayer dollars bailing out stricken banks, the vast fiscal black hole that is the US military - and by extention, Washington's ability to project imperial power across the globe - will become increasingly difficult to sustain (could the crash to do Washington's capacity to maintain an empire what two world wars and a depression did to London's 60 years ago?). Michael Klare warns of "a pandemic of economic violence" comprising everything from riots through terrorist attacks to possible inter-state resource wars. And Engelhardt himself draws attention to the prospect of the world being caught in a pincer between financial disaster and the current, worsening effects of climate change.

Finally, in the New York Review of Books, the great Amartya Sen - Nobel Laureate in economics and all-round good guy - re-examines the philosophies underpinning today's form of capitalism and asks how things can be moved forward from here.