No power to the pundits?

There’s been a bit of talk over on LP about the demise or otherwise of neoliberalism, with a couple of side comments about the power or otherwise of conservative pundits like Bolt, Akerman, Devine et al. This is something I’ve been wondering about a bit lately. Last year, for example, I got Bolted (I first responded then when it became clear that he is in fact bonkers, walked away from the fight) and it had no after effects whatsoever. I subsequently did two months of solid media and public forums and not one person mentioned the piece, on air or off.

But still I waver between thinking they have no power and thinking that actually there is a complex dynamic at work here that gives them a large amount of indirect political power.

Whither neoliberalism? And the progressive future

Today I was supposed to be in Sydney to talk about ‘What next after neoliberalism – creating a progressive future’ to the Crunch Time conference organised by the Centre for Policy Development and other progressive organisations such as the Australia Institute. The session was a panel discussion with David McKnight and Sarah Hanson Young, But I came down with a bug earlier in the week and for the first time ever I simply wasn’t well enough to fly. Anyway, I’d prepared a few notes and here’s what I was going to say.

In perhaps typical academic style one might begin by questioning the topic. I’m not so sure that we are ‘after’ neoliberalism. Yes, there’s been lots of talk about government regaining the ascendency over markets, with ‘nation-building’ projects having been announced and ‘stimulus packages’ that seemingly fly in the face of ‘hands-off’ market approaches to governance, but various forms of free-market thinking that owe much to neoliberalism remain embedded in just about all our civic and private institutions.

Bailing out the US car industry . . .

This spoof ad is from the US satirical site BuffaloBeast.com. The copy says:

You probably thought it was smart to buy a foreign import of superior quality, with better mileage and resale value. Maybe you even thought that years of market share loss might prod us into rethinking our process and redesigning our products with better quality in mind. But you forgot one thing: We spent a shitload of money on lobbyists. So now you’re out $25 billion, plus the cost of your Subaru. Maybe next time you’ll buy American like a real man. Either way, we’re cool.

Are they serious?

You really do have to wonder at today’s Age. The online version has a link to an opinion piece by some dill telling people that all the hard times are in their imagination (including the now standard jab at Gen x and y), and that they need to ‘Harden Up’. Right next to it is a story about 10 000 forecast job losses in the finance sector, including 5000 at Westpac. To make things worse, the article by the dill recommends that people buy Westpac shares. Sometimes the left hand not only doesn’t know what the right hand is doing, it has no idea whatsoever.

A global economic-environmental compact?

There’s a really interesting report from scientist Ian Lowe on the Inside Story site about the recent WEF forum on the economic crisis and climate change. It seemed to me as I was reading it that if the WEF hard-heads are at last starting to connect the dots, and to look at the failures of present economic assumptions re: growth etc, the environment, and the issue of governance, then the world really is changing. We can only hope!

Meanwhile, Brit comedy duo Bird and Fortune have done a very funny pisstake on the sub-prime crisis. Well worth a look.

The trials of youth

Last Sunday the Age were kind enough to publish an opinion piece of mine on the stereotypes that surround Gen Y (it can also be found here, at The Vine). I’m always surprised when I write on this topic just how many responses and how much support it gets, and this one was no different. Lots of young people have had a gutful of some of the crap that gets talked about them (though not some of those at The Vine!). As follows:

WE’VE all heard the myths. Gen Y-ers are lazy, stay-at-home and good-for-nothing. They don’t leave home until they’re in their late 20s or early 30s and then return only to dump the laundry at the door. Selfish, indulged, pampered, consumeristic and easily distracted, they seek only instant gratification and the latest phone.

Multiculturalism helped cause the financial crash (!)

Yes, it’s true. Just ask our local News Limited opinion hard-head Andrew Bolt, who writes today that:

You see, this crash wasn’t really caused in the first case by bankers’ greed. Or not by their greed alone.

The “greed” that started it was that of poor people in the US who wanted a house and took out home mortgages they had little hope of repaying.

What helped them to get these ninja loans – loans to people with no income, no jobs and no assets – were tough rules pushed through by then-president Bill Clinton forcing banks to issue more loans to minorities, or else.

And financing and guaranteeing many of them were two semi-nationalised mortgage wholesalers, Fannie Mae and Freddie Mac, which were excused some of the tougher capital requirements of banks, so greedy was Clinton for success.

Bolt, of course, keen to absolve bankers from their responsibilities and markets from failure, sells short a whole range of factors that underwrote the crisis, such as the overleveraging of sub-prime based financial products, the anti-regulatory zeal that prospered under the reign of Greenspan, the excessive risks taken by bankers in the search for market share and new markets, and, yes, their drive to pile a bit more on those bonuses they have so craved. As Mike Steketee wrote in the Oz last week:

Defenders of the free market have gone back all the way to the Community Reinvestment Act passed in the US in 1977 to argue regulation, rather than deregulation, has created the present problem. This legislation was designed to end discrimination in lending practices against lower income neighbourhoods often suffering from urban blight. It stipulated lending be consistent with “safe and sound operations”. Although financial institutions were evaluated for compliance with the act, it never required they lose money on mortgages or that they be given to people with slim prospects of repaying them. Even if, as some claim, the legislation ultimately played a part in encouraging excesses, such as the bundling of sub-prime loans into packages that hid their riskiness, that was a failure not of too much but of too little regulation. According to congressional evidence this year from law professor and former US Treasury official Michael Barr, 50 per cent of sub-prime loans came from financial institutions not covered by the act and another 25 to 30 per cent from those only partially covered. “The worst and most widespread abuses occurred in the institutions with the least federal oversight,” Barr said.

The Bolt line has also been comprehensively debunked in that well-known left wing rag, the Wall Street Journal. But the sort of simplistic drivel pedaled by Bolt (and his stablemate Janet Albrechtsen, though at least she doesn’t ping ‘minorities’) fills sites like alt.conspiracy. And there it is being pedaled, almost cut-and-paste, by highly-paid columnists in the legitimate Australian media. Go figure.

Never the twain?

One of the many disturbing things about the global financial ructions of the past few weeks is that climate change has disappeared from the news agenda. We really do seem to be short term animals, interested only in what’s on this side of the horizon. Hardly a surprise, perhaps, at a time when many people really are worried about their immediate future. But one implication of the media silence is that addressing financial problems and addressing global warming are antithetical, when so far as I’m concerned they are one and the same thing. Both are driven by our belief that unlimited economic growth is necessary and somehow sustainable.

So it was with surprise that last night I found myself agreeing with New York Times columnist Thomas Friedman, who I usually think of as an insufferable windbag, who was being interviewed by George Negus on Dateline. 

A new economics?

It’s funny how people keep talking about The Land of Plenty as if it’s a book about the Howard era when in fact the ‘big idea’ at the heart of the book is that we’re at the end of two thirty year cycles, the first based around economic protectionism and the centrality of governments, the second based around deregulation and the centrality of markets. It seemed a novel idea when I was writing late last year and earlier this year, albeit one that’s since been realised in ways I’d never wish for.

The basis of my thinking wasn’t to do with any particular government (the vast majority of the book was written in the belief that Rudd would win, then in the first few months of the government), so much as the whole political and economic system, which I believed then and believe now to be unsustainable. We seemed to be living in an ‘economic fool’s paradise’, as I put it, where a decade and a half of economic growth had been fueled by consumer spending funded by easy credit, and then a commodities boom. The whole thing was a house of cards. A Very Public Sociologist has since put together a convincing summation that points out how the whole edifice was balanced rather precariously on rising housing prices. John Quiggin’s recent posts have also been excellent. And an erudite summary of last week’s events can be found at LP. Howard? Rudd? It wasn’t going to make much difference.

But the thing that amazes me, speaking as a non-economist, is the idea that the collapse should be a surprise.

Melting down

‘Meltdown’ seems an appropriate metaphor for the week in which the world’s markets crashed then rose then crashed then . . . and in which Ross Garnaut handed over his final climate change report. The first should hardly have been surprising, and nor should the weakness of the second. If we are living in a global speculative economy founded on bad debt, then sooner or later something has to give. In effect the markets are holding people to ransom. If we don’t feed the beast by bailing them out, then they will ruin us. And if the government is pandering to business on all matters environmental, as satirised on last night’s wonderfully apt and timely episode of The Hollow Men, then a weak-kneed stance on climate change (25 per cent reductions at best), with anything stronger, or even that, being denounced by the usual suspects, is to be expected. Meltdown indeed. 

Meanwhile, commentators just as John Quiggin and Mark Bahnisch at LP have been talking about ‘the end of neoliberalism’, with varying degrees of skepticism. It’s a nice idea, but underestimates just how deeply embedded neoliberal ideas are in the global finance system. My sense is that the bail-out (just voted on in the US senate) will happen, even if it won’t necessarily work because there’s more to this than simply lancing a boil. Regulatory noises are being made and some tightening will take place. But the system will stay relatively unchanged because too much depends on it and because money and power have little respect, in the end, for principle.

Ideally, what we should see as the result of the past few weeks is a wide-ranging debate about just where we are and how we got here. A debate that took into account the history of radical conservative ideas, and their ultimate unsustainability, not merely on environmental grounds, but because ‘shareholder value capitalism’, based on speculation and short-termism, doesn’t work especially well for non-finance business either. It’s up to us to start that debate, and that’s the hard bit. Get-up are giving it a go (and combining both economic and environmental issues), but right now people are thinking about the short-term future of their homes, interest rates, their superannuation, and the lines of credit they need to run their businesses. Meanwhile, amidst growing anxiety about matters economic, global warming has dropped down people’s list of concerns.

And who can blame them? What was it that Bertolt Brecht once said? ‘Grub first, then ethics.’