When the man in charge of the soundness of our money supply (Governor of the Reserve Bank, Dr Allan Bollard – PhD in Economics no less) goes to the “Jobs Summit” and comes out saying such headline grabbing rubbish (namely that the current global recession is the “biggest destruction of global wealth ever”), it is no wonder we are in trouble. Yes, he may well be correct that the nominal dollar value of the assets “destroyed” is the greatest ever. It may even be that the nominal dollar value of assets “destroyed” is the greatest ever in relation to the size of global GDP. But really, what does that mean?
While the world’s bankers, Central Bankers, and Governments wrestle with a financial crisis so large it has threatened – if it is not contained – to become a systemic crisis of capitalism, the rest of us watch and wait, and wonder what the effects will be.
We recognise the need for action, but we note the irony of vast public funds being made available to rescue the same financial capitalists who habitually advocate the for the ‘reform’ of policy to take away safety nets for the poor and to expose ordinary people to the disciplines of “the market”.
Whether or not the latest rescue package succeeds, there will be economic aftershocks, and we should be wary. In her book The Shock Doctrine: The Rise of Disaster Capitalism, Naomi Klein documents how moments of crisis have been exploited since the 1970s to push unpopular – and otherwise politically impossible – ‘free market’ policies (more accurately, policies favouring the interests of corporate – especially U.S. – capitalism) onto shocked and disoriented publics.
The rest of the world should not expect an Obama Presidency (if it comes to pass) to make much difference to this – it has been a behaviour persistent through changing U.S. Administrations over the decades.