Yesterday, as the weirdo anti-war types marched across San Francisco, above us in an overground parking lot, was a young man addressing the crowd over his own little PA system. Talk about radical! This young economist was addressing the crowd on issues of their economy in an international context. Of course his non-political message was being ignored by most, few seemed to think he should be there. He was talking major economic changes that if not corrected soon would lead to huge changes for the worse. The crowd carried cartoons of W and he carried magazines on economics.
Talk about crying in the wilderness…
The two big US economy stories internationally are the issue of the oil price rise (the fact that the market is still denominated in US Dollars and the price at almost $70.00) and the dual deficits. Within the states, local media does highlight oil prices (usually without discussing the origins of price rises) but the dual deficits? Dual what?
Maybe deficits are just too dull? Few US media outlets focus on long term prognostications for the US economy. Mum?s the word on the flight of investment to non-dollar markets giving the global rich time to cover their asses and hedge their bets. Instead CNN & Fox prefers to bring their customers insignificant hourly fluctuations in US stock prices and sponsored “Business News”.
The key economic issue of the day: the twin deficits are regularly debated outside the US and with increasing alarm, but they seem to be kept largely under wraps here in the US. As currency-traders worldwide sit tensely by, their hands hovering over the sell button, everyone tries to second-guess their timing. The queer fact is that few of the dealers would wish to find themselves in such a position. Rather they might prefer that there were still time to pull back from the precipice. However the markets are nothing if not practical and most admit that what W can do now will be too little and too late so they don’t want to go down with the sinking ship.
True! Short-term killings will be made especially in the massive currency markets but then what? Who wants a world recession? Such periods of instability are hardly good for business? When the dollar corrects the knock on effect will be massive: destabilizing other currencies, stock markets and global trade? Predictions of a 30’s-style World economic depression and the unraveling of the brittle Bretton Woods currency agreement are rather dire but not entirely unlikely. This news is rarely news in the US, only little leaks like Greenspan admitting to the French finance minister that the US has lost track of its deficit come through from foreign news streams and are republished in the US mainstream. Journalistic negligence means that the US people are missing a very big story indeed. W?s mismanagement of their economy shall lead, almost inevitably, to an end the global hegemony of the US dollar. Where is US Business Journalism on this topic?
The US Federal budget underfunding (due mainly to tax cuts on the rich and escalating war costs) and the balance of payments problem (caused primarily by the outsourcing of US production capacity to China) may provide greater margins for US-based transnational corporations but they’re not working out for the US economy as a whole. Again these stories receive minimal internal US coverage (hardly surprising in a country where ?international issues? are seen as remote chimera). To be honest while credit is cheap most people in the US will not perceive a huge economic shock from a falling dollar but how long can credit remain cheap? With the ratio of savings to GDP well below values preceding Black Monday in 1987 (when Reagan’s smaller twin deficit punched out that bubble) shouldn?t even the most xenophobic of national business news watchers be furiously writing copy?
Of course there are exceptions to this blatant lack of coverage Counterpunch in an article covering the devastation of Hurricane Katrina described August 31st. as , “… the day America began to visibly collapse” Let’s hope they are wrong but with hurricane Rita speeding across the super-heated Caribbean as we speak and other certain disasters in the making! Maybe, as the article states: ” … as diverse a group of thinkers as Seymour Melman, Paul Krugman, Chalmers Johnson, Gore Vidal, Paul Craig Roberts, Greg Palast, and Joe Stiglitz” are indeed correct in estimating “… that the U.S. economy in the mid to near term is in for an unavoidable ‘correction’ as significant as any it has ever experienced.”