The world economic crisis has not yet abated and there is still no recovery in sight even after three years. The governments of the advanced capitalist countries had already spent trillions of dollars in bail out programs, and these have resulted in the sovereign debt crisis, but still, nothing has happened.
The reason? The very economic policies that triggered the crisis – the neo-liberal economics of liberalization, deregulation, and privatization – are still being implemented. Thus, even as interest rates are at its lowest, economic activity is still lumbering. Why? Take for example the housing industry in the US, Gary Shilling, President of A. Gary Shilling & Co. and author of the Age of Deleveraging, said there is still an excess of from 2 to 2.5 million homes in the US. Who in his right mind would then construct more homes? The automobile industry is in the same predicament. As far back as 1997, total world car sales had reached 47.6 million while total world producing capacity had reached 70 million.
Also credit is tight despite measures by advanced capitalist countries to lower interest rates plus two rounds of quantitative easing measures by the US. Banks are simply afraid to lend to corporations and consumers who are still saddled with debts.
What is needed for the world to overcome the crisis is change: a decisive break from current economic policies and paradigm. But the Right would not have any of it. This has been demonstrated recently when the Republicans are set to reject US President Barack Obama’s proposal to pump prime the US economy through $ 200 billion in government spending on infrastructure projects, which is aimed at generating employment, and $240 billion in tax cuts for individuals and businesses. To finance these, Obama is willing to put Medicare on the chopping block. (It could be remembered that health service delivery reform was a key component of his presidential campaign but now he is willing to sacrifice it.)
These are not even radical measures. This is just a reprise of Keynesian economics, which was implemented after the Great Depression but was discarded after the crisis of the 1970s. Japan has been pump priming its economy ever since it hit a recession since the late 80s. Furthermore, Obama’s $440 billion or so jobs plan is even much less than the $700 billion bail out plan, which he gave away to big banks and financial investment houses to buy their worthless financial instruments. But the Republicans immediately threatened to reject Obama’s jobs plan.
It could be remembered that when Obama first unveiled his health program, the Republican rightists called it as “socialist” and rallied the American people against it. When America and all advanced capitalist countries unveiled their bail out plans, analysts also called it as “socialist,” but of course, did not try to rally people against it as it would save the precious banks. It would not be surprising if the Right would again call Obama’s jobs plan as socialist and try to rally people against it, especially since Obama also threatened to do so in support of his proposed measure.
Einstein once said that insanity is doing the same thing over and over again and expecting different results. Well, the Right and all the defenders of neo-liberal economics are guilty of this. But to believe that something that is slightly different but essentially the same is opposed to the prevailing policies, and to vigorously oppose it, is more than insanity, it is stupidity.
As for US President Barack Obama, despite his flowery rhetoric about change and caring for the American people, he really has not done much to reverse the tide of the crisis nor to work for the interests and welfare of the American people. He just tries to tweak these same policies a little. That is why he is now caught somewhere between the American people, who are increasingly being disappointed in him, and the Republicans, who are using his waning popularity to push for more rightist measures. And Philippine President Benigno Aquino III is trying hard to emulate him. But Aquino is not doing any tweaking at all; he just calls these same policies by a different name, such as his banner Public-Private-Partnership program (read: privatization). (Bulatlat.com)