Sunday, November 9, 2008

Neoliberalism with a happy face

I'm not sure that's quite what the pwogs had in mind (although, then again, as long as the credit flows loosen up to allow them to keep purchasing those X-Boxes, they probably couldn't care less), but as predicted, here's the "change" you can expect apparently from the O-Man: holdovers from the Clinton regime, who were true believers in the Washington Consensus (a fancy way of saying disaster capitalism), which was, and still is, a disaster for anyone who happens to get in the way. Here's a bit about one of the potential new members of the upcoming Obama regime, Larry Summers:
Lots of people screaming outside may strengthen the people who apparently oppose him inside:
Barack Obama has been close to naming Larry Summers as the next Secretary of the Treasury, but the appointment is being held up by opposition to the brilliant but controversial economist...

The discrepancy here suggests that behind the scenes, there is a powerful argument going on as to who is best for this job. Summers is brash and blunt, and he has quite a few detractors.

Meanwhile, Dean Baker describes Summers' contribution to our current catastrophe, and asks:

Given this record of failure, the question is how can Larry Summers still be considered for the top economic position in the Obama administration? This would be like appointing the arsonist who burned down the city as the new fire commissioner. We like to tell our children that success is rewarded and that failure is punished. But if Larry Summers ends up as Treasury secretary, what are we supposed to tell the children?

Finally, here's another reason to dislike Larry Summers. This one is only for connoisseurs.

In 2000, when Summers was Treasury Secretary, he made a very specific claim: that from 1980-2000, developing countries had "moved to the market and seen rapid growth in income."

The problem is this simply wasn't true. The countries that had most "moved to the market" had had far worse income growth from 1980-2000 compared to 1960-1980. Soon afterward Summers was asked about this at a think tank event, and he used all his brilliance to tap dance around for five minutes without answering the question.

The relevant excerpt is below, and the entire transcript of the exchange is here.

Q: My question has two parts. First of all, I want to--in the New York Times you were quoted as saying, "When history books are written 200 years from now, the last two decades of the 20th century, I am convinced that the end of the Cold War will be the second story. The first story will be about the appearance of emerging markets and about the fact that developing countries, where more than 3 billion live, have moved to the market and seen rapid growth in income."

First, were you quoted correctly? And if so, what exactly did you mean by this?

According to the World Bank, Latin America grew between 1960 and '80--it grew 73 percent before the Washington Consensus. After 1980, during the period that you say it saw rapid growth, it was 5.6 percent.

Moreover, in Africa, per capita income grew at 34.3 percent from '60 to '80. Since '80, per capita income in Africa has fallen by 23 percent.

Some emerging markets, such as China and South Korea, have grown rapidly over the past 20 years, but then they did this in the previous 20 years as well and in the case have largely disregarded the Washington Consensus. Could you reconcile these statistics?

Sec. Summers: Thank you for your question. I was quoted correctly, and we'll only know 200 years from know whether I was exactly right in what I said about the history books 200 years from now.

But I think it's important for us all to recognize as we think about the global development effort, and as we think about the events of the past few days, that with all of the problems, with all of the disappointments, with all of the things that can be improved--and I'll say something about them in a moment, and I am choosing my words carefully now--the last two decades have seen more progress in improving the human condition globally than any two-decade period in human history. That that is there in the most concrete manifestations of the things that are most important to people: the fraction of their children who die before the age of five, the fraction of their children who learn to read, the fraction of children who lose their mother due to dread disease, the fraction of young girls around the world who are forced into child prostitution. The societies have been transformed in ways that people thought almost inconceivable two decades ago.

This room was, in the late 1970s, the site of more than one discussion of the--what was seen by many of those who participated--as the near-certainty of mass famine throughout Asia and the developing world during the 1990s. That did not happen. That progress is a reflection of many, many things; surely, the most important is the success of the countries themselves in pursuing economic policies that liberated the economic energy of their people and allowed growth to take place, but it is also a success of the movements towards greater global integration that have taken place during this period and it is a success of the global institutions that have been a part of all of that.

Does growth in developing countries need to be more equitable, more human-centered, more focused on health and education? Absolutely, it does. Do the institutions need to be much more transparent and accountable? Absolutely, they do. Do their programs need to be more sensitive to the people who live in villages and involve greater degrees of popular participation? Absolutely.

But let us all remember that there has been no substantial success in raising people's incomes and living standards without contact and resources from the rest of the world and that that is something that requires revenues from exports or foreign investment, or international foreign assistance, and that, if we are going to have progress, we have to find a way to have those things and to make it work for people. I hope I have addressed the concerns that were reflected in your question.

—Jonathan Schwarz

For the elite establishment types, folks like Summers should be staunchly defended. Not to worry, we'll keep neoliberalism at home as well.

Obviously, I just never got caught up in the "movement." Yes, I understood, and to a degree could empathize with, the notion that a rational manager of empire might be preferable to one who's likely to continue the Junior Caligula approach to foreign and economic affairs at home and abroad, with plenty of cultural warmonger to keep those of us who are different in "our place". I can even take some comfort in knowing that the base of the GOP is continuing to shrink and that at least the millennial generation seems to have avoided the movement conservative kool-aid, and to even have some notion of where much of the aforementioned GOP base is located (if for no other reason than to know to avoid some of these places like the plague). If I have any hope at all, it is merely that those who got caught up in the movement stay active when the Obama regime turns out to be a repeat of the DLC nonsense that dominated the Clinton years.

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