Reckoning: The Economic Consequences of Mr. Bush

Here are some extracts from a  Joseph E. Stiglitz article published in Vanity Fair two days ago.

When we look back someday at the catastrophe that was the Bush administration, we will think of many things: the tragedy of the Iraq war, the shame of Guantánamo and Abu Ghraib, the erosion of civil liberties. The damage done to the American economy does not make front-page headlines every day, but the repercussions will be felt beyond the lifetime of anyone reading this page.

I can hear an irritated counterthrust already. The president has not driven the United States into a recession during his almost seven years in office. Unemployment stands at a respectable 4.6 percent. Well, fine. But the other side of the ledger groans with distress: a tax code that has become hideously biased in favor of the rich; a national debt that will probably have grown 70 percent by the time this president leaves Washington; a swelling cascade of mortgage defaults; a record near-$850 billion trade deficit; oil prices that are higher than they have ever been; and a dollar so weak that for an American to buy a cup of coffee in London or Paris—or even the Yukon—becomes a venture in high finance.

Remember when private armies were considered evil?

You don’t have to be very old to recall a time when the only private armies we heard about were shady operations somewhere in Africa… Not any more of course.

I came across a good post on the matter via a comment on Seeking Utopia.

Bright and shining lies?

Domestic

Andrew Charlton* (right) Ozonomics (Sydney, Random House, 2007) promises to enable me to penetrate past the Australian government’s carefully crafted self-image as “a safe pair of hands”. He is certainly better looking than John Howard… 😉 Now I have read a bit of this eminently readable book I am impressed. To be honest, I am not sure if it is because Charlton tells me what I have long suspected — that the “safe pair of hands” is a deception, perhaps a self-deception if you wish to be charitable, a chimera, a myth — or because he is right. Whatever the reason, I am sucked in, impressed, convinced even. I will leave you to make up your own mind, commending the book to your attention. It is a BEST READ 2007 as far as I am concerned.

You may read Charlton in shorter form in the current issue of <a href=”http://www.themonthly.com.au/tm/node/680&#8243; target=”_blan THE NATION REVIEWED

“Interest rates were not only central to the 2004 election. They have been a recurring theme of the past 11 years of Coalition government. Even more importantly, it is almost certain that interest rates will be a major theme, perhaps the major theme, of the next federal election campaign. The story Howard and Costello will tell the Australian people will go, roughly speaking, like this. Under Labor interest rates are always unacceptably high. Under the Coalition they have been and will remain low. They will suggest to the Australian people that interest rates are controlled by governments and directly linked to federal budget deficits and surpluses. As no part of this story is actually true, the next election campaign will be conducted on the basis of a series of seriously misleading or straightforwardly false Howard-Costello claims.”

In the Monthly Comment, Andrew Charlton identifies the myth fundamental to the government’s assertion that only it can keep interest rates low by delivering a budget in surplus. Not only do countries such as the US run enormous budget deficits while maintaining low interest rates; because Australia is a small part of a global economy and prey to its fluctuations, the budgetary actions of its government – its borrowing – can only have a small effect on the nation’s interest rates. By unravelling the central economic claim of John Howard and Peter Costello – that interest rates would necessarily be higher under a Labor government, a claim wrongly given credibility by Labor under Mark Latham during the 2004 election campaign – Charlton points to a far greater concern than interest rates alone. Australians, encouraged by the current government, have accrued record personal debt, leaving them vulnerable to even minor rate rises, and consequently to the economic spin of the Coalition.

“Economic policy has been one of the Coalition’s key electoral strengths. The great triumph of Howard and Costello has been to convince Australians of a spurious link between his government’s fiscal conservatism and low interest rates. It is a story that may play well in the marginal electorates, but is also one that doesn’t make economic sense. Interest rates have been flat since 1996, when Howard and Costello came to power. Interest rates have enjoyed consistently low inflation, and the nation has enjoyed a benign economic climate and a new monetary policy which has been implemented competently by the Reserve Bank.”

*You may download an MP3 of Andrew Charlton (and Will Elliot) from Richard Fidler’s program on ABC Queensland. There are reviews of the book here, here, and here: “Andrew Charlton is 28 years old and has one of those CVs that makes you jealous. He was a Rhodes Scholar, has worked at the OECD and United Nations, and has spent the last couple of years at the London School of Economics. He has co-written several academic papers and a book with Nobel laureate Joseph Stiglitz.” His LSE home page is here.

Foreign policy

Go to the American magazine of that name and study The Terrorism Index.

Americans are thinking more about the war on terror than ever before. But that doesn’t mean they’ve come to see this issue in the black-and-white terms preferred by many elected leaders. The combination of bloody wars in Iraq and Afghanistan, continued terrorist attacks from Britain to Somalia, and a presidential election in which candidates are defining themselves based on how they would stare down the threats has many seeing shades of gray. Six years after the terrorist attacks of Sept. 11, 2001, just 29 percent of Americans believe the United States is winning the war on terror—the lowest percentage at any point since 9/11. But Americans also consider themselves safe. Six in 10 say that they do not believe another terrorist attack is imminent. Likewise, more than 60 percent of Americans now say that the decision to invade Iraq was a mistake. Yet around half report that they would support similar military action to stop Iran from acquiring a nuclear weapon.

Such seemingly incompatible points of view may stem in part from the fact that we are increasingly asked to reconcile a bewildering array of threats—and a nebulous enemy that defies convention. In Iraq, for instance, the same surge in U.S. forces that is meant to help pacify Baghdad only escalates violence elsewhere in the country. In the broader Middle East and South Asia, some of the same countries that are now the United States’ most crucial allies have also been guilty of cultivating the very terrorists we look to bring to justice. Deciphering priorities from such difficult paradoxes can be hard. So, how can one determine whether the war on terror is making America safer or more dangerous?

To find out, FOREIGN POLICY and the Center for American Progress once again turned to the very people who have run the United States’ national security apparatus during the past half century. Surveying more than 100 of America’s top foreign-policy experts—Republicans and Democrats alike—the FOREIGN POLICY/Center for American Progress Terrorism Index is the only comprehensive, nonpartisan effort to mine the highest echelons of the nation’s foreign-policy establishment for its assessment of how the United States is fighting the war on terror. First released in July 2006, and again last February, the index attempts to draw definitive conclusions about the war’s priorities, policies, and progress. Its participants include people who have served as secretary of state, national security advisor, senior White House aides, top commanders in the U.S. military, seasoned intelligence professionals, and distinguished academics. Eighty percent of the experts have served in the U.S. government—including more than half in the Executive Branch, 32 percent in the military, and 21 percent in the intelligence community…

No effort of the U.S. government was more harshly criticized, however, than the war in Iraq. In fact, that conflict appears to be the root cause of the experts’ pessimism about the state of national security. Nearly all—92 percent—of the index’s experts said the war in Iraq negatively affects U.S. national security, an increase of 5 percentage points from a year ago. Negative perceptions of the war in Iraq are shared across the political spectrum, with 84 percent of those who describe themselves as conservative taking a dim view of the war’s impact. More than half of the experts now oppose the White House’s decision to “surge” additional troops into Baghdad, a remarkable 22 percentage-point increase from just six months ago. Almost 7 in 10 now support a drawdown and redeployment of U.S. forces out of Iraq…

And that is just a taste! Go and read it all very carefully and remember it whenever Howard, Nelson or Downer are “explaining” our foreign policy. Our policy???

Salmagundi

Now there’s a word to look up! It describes this entry perfectly.

Shire nostalgia

On Occasional rambles of a retired teacher, that excellent new blog of mine on Blogspot on the old Floating Life address which more of you should visit, I am about to write* the next in the inspiring teachers series based on Teachers Who Change Lives by Andrew Metcalfe and Ann Game. That took me back to Sutherland fifty-three years ago, and I am sorry to report that memory does tend to fade after all. Odd things stay sharp though.

Forty years ago my mother wrote down some memories of her own — yes, they are on this site now — and I am truly amazed by their detail and by her style. She used under stress to dream about her New England, Braefield, and sometimes about life on the Hawkesbury before that. To her that was back in time about the same as Sutherland is to me. Incredible — to me, that is. I shall wear the bottoms of my trousers rolled… Denys will get that one.