opening line of Kevin Phillip’s new book
says the “most worrisome thing” about the present economic situation
in the U.S. is “the extent of official understatement and misstatements
– the preference for minimizing how many problems there are and
how interconnected they are.”
the preface to “Bad
Money: Reckless Finance, Failed Politics, and the Global Crisis
of American Capitalism,”
titled, “The Political Economy of Deception,” he writes, “Whether
the U.S. government and the Republican and Democratic parties can
remedy the debt and oil-related transformations of the last two
or three decades is dubious enough. Far more worrisome is the possibility
that neither Washington nor Wall Street is willing to confront the
deeper problem – ascendancy of finance in national policymaking
(as well as the gross domestic product), and the complicity of politicians
who really don’t want to talk about it.”
tuning into the 2008 Presidential nominating conventions – all of
them – would have had a good dose of the political economy of deception.
Each, including the minor party’s confabs, has this is common: a
stubborn refusal to even seriously hint at the scope of the economic
precariousness of the present moment, or the forces that have given
rise to it.
Republicans, of course, once again demonstrated that they are clueless
– or unconcerned - about the fate of working class individuals and
families as they went blithely ahead and nominated someone who supports
the Bush Administration tax cuts for the well-to-do and votes consistently
against raising the minimum wage. The adopted platform makes no
mention of the crisis in bank credit.
candidate, Barack Obama, probably produced the “populist” economic
projections some of us have been calling for since the campaign
began. No doubt he reassured a lot of people on Main
Street and in the countryside that he is aware of what they are
facing and proposes serious measures to deal with their economic
insecurity. And it wasn’t rhetoric. His proposals are weighty; if
enacted, they will improve our lives, and realizing them will require
tough fights against powerful interests. However, with the exception
of mention of housing foreclosures, the same worthy proposals could
have been made four years ago.
didn’t even spell out the full extent of the housing crisis, the
fact that a couple of million people could still face losing their
homes – and thus their accumulated assets - before this is over,
or the net collective wealth loss being visited upon African American
communities. This, aside from the fact that it is the entire economy
that it tottering, and across the country, working people are watching
their retirement accounts steadily losing market value.
political economy of deception is not restricted to this country.
Elsewhere, people are feeling the effects of the economic mess into
which we have been led by the academic and financial wizards of
capitalism. In Japan,
and Canada, the debate today is
whether those countries have gone into economic recession or how
soon they might. In each case what the political leadership does
or does not admit to the public is producing dramatic political
Monday, the Prime Minister of Japan, Yasuo Fukuda, suddenly resigned,
“throwing the world’s second-largest economy into political confusion,”
as the Associated Press put it. The country’s economic growth
has ground to a near halt while food and fuel prices have soared.
Fukuda’s public approval rating is said to have fallen precipitously
over the summer to 29 percent.
in Canada, Prime Minister Stephen Harper said he doesn’t see any
indication of “real recession’’ in his country despite two straight
quarterly declines in gross domestic product. The Canadian Government
said recently that its composite of leading indicators, fell four-tenths
of a percent in May. It was the fourth consecutive monthly decline.
Such declines ‘‘typically are consistent with the onset of a recession,
although this is still not yet a certainty,’’ said a government
agency. As in the U.S.,
jobs in Canada
are disappearing, housing starts slowing, house prices declining,
with the value of the country’s currency in decline.
economy’s troubles come at a difficult time for Canadian Prime Minister
Stephen Harper,” reported the Financial Times. “Many expect
him to be on the verge of calling an election and an underperforming
economy will be a difficult campaign issue.”
made his reassuring remarks in Inuvik - pop. 3,500 - where he had
gone in an apparent attempt to lay Canada’s
claim to possible oil producing areas of the Arctic
Ocean. But that’s another story).
there’s the United Kingdom, where
something really big hit the fan last week.
of this writing, Chancellor of the Exchequer (finance minister)
Alistair Darling looked like he might be on the way out for having
told an interviewer that Britain’s economic circumstances were “arguably
the worst they’ve been in 60 years … And I think it’s going to be
more profound and long-lasting than people thought.”
in trouble not because of what he said but for having said it.
leader, David Cameron of the Conservative Party, commented, “I think
it’s extraordinary that the chancellor said it, because – remember
– a chancellor of the exchequer has got to think not only ‘I must
tell the truth at all times’ but also ‘I must use my words carefully,
so that I don’t actually create a situation that’s even worse, that
creates a crisis of confidence’.”
people believe that things are probably deteriorating faster in
the UK than the government was admitting, but the fact that we’ve
seen the chancellor come out and admit that things are far worse
have put sterling under pressure,” said Ian Stannard, a senior currency
strategist at BNP Paribas.
the Guardian newspaper put it, “Darling’s comments were seen
to be at odds with (Prime Minister Gordon) Brown’s claims that Britain
is well-placed to face the economic downturn.”
was in Brussels conferring about the situation in Georgia when Darling’s
comments appeared. He demurred from Darling’s assessment, stressing
that the current economic difficulties stemmed from “unique circumstances”
brought on by rising oil prices and the international credit crunch.
“I think that you will find that the actions that we have taken
and the actions that we are taking are actions that are designed
to help the British people get through what is a difficult world
economic downturn,” Brown said.
Darling’s interview appeared, it was reported that since July 2007
the number of new mortgages being issued in the country was down
71 percent. This week the Organization for Economic Cooperation
and Development (OECD) said Britain could be
expected to fall into recession over the second half of 2008, with
the economy contracting by 0.3 percent in the third quarter and
0.4 percent in the fourth.
too, is in political trouble. His approval ratings have also fallen
precipitously largely as a consequence of his government’s handling
of the economy. Some Labor Party leaders believe the stimulus measures
Brown was to introduce this week represented Brown’s “last chance”,
and that if they don’t help to lift the party’s standing in the
polls he should be replaced as prime minister, reported the Guardian.
horror. Politician tells it the way it is. Sterling
tumbles to 12-year –low against the euro after Chancellor of the
Exchequer says that life is tough out there,” wrote Guardian
economic editor Larry Elliott Monday. “Share prices fall because
Alistair Darling says that voters are ‘pissed off’ with the government.
To paraphrase Basil Fawlty [the major character in the British sitcom
Fawlty Towers], all this is surely a statement
of the bleedin’ obvious.”
problem here is not Darling said, it’s that our political culture
militates against honesty,” continued Elliot. “The cardinal sin
for any politician is to commit a gaffe and it is considered a major
gaffe for the chancellor to say that the difficulties for the economy
are going to be more profound and last longer than people thought.
Yet, this is hardly earth-shattering stuff. The International Monetary
Fund has said the financial crisis is the worst since the 1930s.
deputy governor of the Bank of England, Charles Bean, told a conference
in America last week that Britain was facing conditions just as challenging
as those in the 1970s. House prices are falling, food bills are
rising and it costs more to fill the car up with petrol than it
did a year ago. So, self-evidently, the economy is not doing well.
And, just as obviously, the downturn in the economy is taking its
toll of support for the government.
has been pilloried for his candor. Chancellors, according to the
rules of the political game, are not supposed to say anything that
might disturb the voters or scare the markets. They are supposed
to answer questions with bland reassurance even if it means swearing
blind that white is black and black is white. Yet, if things are
so wonderful, why is the government planning to unveil a plan tomorrow
to help prevent families from being thrown out of their home as
a result of the credit crunch and the housing crash? Darling’s words
are at least consistent with Labor’s actions. What’s more, he has
the decency to treat voters as grown-ups rather than as total idiots
who can be gulled with a bit of political spin into believing that
things are not as bad as they are.”
all three have parliamentary systems. One down. And if things get
much worse economically the governments of the other two could go.
In our country things don’t work that way. The President can only
be removed through the process of impeachment for high crimes and
misdemeanors. He or she can’t simply be removed because he or she
is leading the country toward economic ruin. Too bad.
it seems what Kevin Phillips terms the political economy of deception
is at work in all four major capitalist countries. The government,
the opposition parties, and the major media all agree: don’t be
too candid with the public. This sad reality was all on display
these past two weeks in Denver and Minneapolis
- St. Paul.
BlackCommentator.com Editorial Board member Carl Bloice is a writer in San Francisco, a member of the National
Coordinating Committee of the Committees of Correspondence for Democracy
and Socialism and formerly worked for a healthcare union. Click
to contact Mr. Bloice.