Saturday, 10 May 2008

The Good News from Newsweek: Shock Therapy is Good For You

I recently bought a copy of Newsweek - figured it would be something like the Economist, which I do read now and then for informational purposes. Not so. Compared to the Economist, Newsweek is a shameless neoliberal capitalist propaganda tool, believe it or not. Or inversely, compared to Newsweek, the Economist seems an objective, balanced, non-partisan news source. In the most recent issue of Newsweek, Fareed Zakaria, who is the paper's international editor, saw it fit to include (as cover story) an excerpt from his book, The Post-American World.

One has to be suspicious whenever a token 'intellectual' of vaguely Third-World descent in the service of a global superpower engages in self-flagellation in the name of that superpower. The good news that Zakaria wants us to know is that although there are other big global players coming on the global economic-political scene (China, India, etc), America will be OK. The reason: low unemployment, low inflation, low interest rates, the spread of democracy and American ideas, etc. And in the final flourish we are told of this 'rise of the rest' that it is 'one of the most thrilling stories in history' as 'Billions of people are escaping from abject poverty...'

Say no more. Billions of people? There are only six billion of us, dude. Are we counting other planets? Where Zakaria's figures come from is of course not worth the asking, as this is not a scholarly journal or a serious publication in any sense (nor is Zakaria's book it would seem), and no sources are cited. Hey I'm not asking for footnotes, but sometimes it's enough to say "According to..." Billions? Give me a break.

Well, according to Mike Davis's acclaimed book Planet of Slums, which does cite sources, lots and lots of sources, including various UN bodies, the IMF, and World Bank (far from being bastions of lefty scholarship), the urban population in proportion to the rural has skyrocketed in recent decades, within the urban population the number of those living in slums is on the rise, income disparity between rich and poor everywhere (except perhaps in Scandinavia, although this is not discussed) is on the rise, and any reversal or slowing of these trends is nowhere in sight.

All this is the result of the process that Zakaria describes in these pompous, celebratory terms: "For 60 years, the United States has pushed countries to open their markets, free up their politics, and embrace trade and technology. American diplomats, businessmen, and intellectuals have urged people in distant lands to be unafraid to change..."

For better or worse? Needless to say, income disparity between the richest and poorest in the United States is officially closer (in terms of ratios) to that of developing nations than other developed ones (i.e. Europe, Canada, Japan), and is also on the rise - no exception. But perhaps what Zakaria means is that billions of people are escaping abject poverty, as opposed to just poverty or even destitution or slum life, starvation, or something worse. Perhaps he just means that things are changing, that's all. No harm in that! White lies! In other words, while some people are going from merely 'wealthy' to 'filthy rich', others are migrating from 'abject' to other kinds of poverty, better or worse.

But never mind all that - the global economy is growing, global trade is increasing, and as Zakaria jubilantly reminds us, isn't it great that these days stock markets no longer plummet in response to disasters and wars but rather the opposite - they soar! (on account of defense spending, etc - part of the phenomenon that Naomi Klein calls 'disaster capitalism', spread by the technique of 'shock therapy'; See the shock doctrine video) Growth, growth, growth! So we don't have to avoid wars and disasters, and can in fact cash in on them! America is no longer first - the world's largest Casino is in Macao (no democracy there) rather than Las Vegas, Zakaria tells us, The Mall of America is no longer even in the top ten, the largest ferris wheel is in Singapore (a dictatorship) and only two of the world's richest people are American - so that should at least make all the poor people in those other countries ('the rest' as Zakaria lovingly calls them) happy, even if they're still poor. At least somebody gets to spend lots and lots of money in the name of their national pride.

As for the low unemployment and low inflation in the US, an article in the latest issue of Harper's is definitely worth a read for anyone interested - 'NUMBERS RACKET: Why the Economy Is Worse Than We Know' by Kevin Phillips, which documents the the rise of 'polyanna creep' or doctoring of calculation methods in federal accounting and labour statistics by successive US governments since the Kennedy administration. An example: American officials often cite a figure they call 'core inflation' - which doesn't exist anywhere else and which, on account of volatility in prices doesn't include - get this, folks - food and housing. So when they say 'core inflation' rather than simply 'inflation' what they're really saying is 'we're not telling you the truth'. Similarly, US unemployment statistics do not include many categories included by other governments, and among them are 'discouraged workers': people who have been looking for a job for a long time and haven't found one yet, basically, aren't counted as 'unemployed'. They don't exist. The real numbers, Phillips points out, are actually much higher, and the day of reckoning grows near. Fie on you, Fareed.

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