Waiting for Copernicus By John Feffer

[xchrom]

http://www.atimes.com/atimes/Global_Economy/NE11Dj04.html


It's happening in Buenos Aires. It's happening in Paris and in Athens. It's even happening at the World Bank headquarters.

The global economy is finally shifting away from the model that prevailed for the past three decades. Europeans are rejecting austerity. Latin Americans are nationalizing enterprises. The next head of the World Bank has actually done effective development work.

Maybe that long-heralded "end of the Washington consensus" is finally upon us.

After the near-collapse of the global financial system four years ago, obituary writers rushed to proclaim the death of the prevailing economic philosophy known as neo-liberalism. "Wall Street's financial meltdown marks the end of an era," wrote Michael
Hudson and Jeffrey Sommers in Counterpunch at the end of 2008. "What has ended is the credibility of the Washington Consensus - open markets to foreign investors and tight money austerity programs (high interest rates and credit cutbacks) to 'cure' balance-of-payments deficits, domestic budget deficits and price inflation.

It was a tempting conclusion. Putting Wall Street and financial speculators at the center of the universe had generated an economic supernova, and everyone seemed to get the message. Everyone except Big Money, which never received the obituary notice. After some minor tweaking of Wall Street practices, some bailouts of enterprises deemed too big to fail, and the injection of some stimulus spending to arrest the free fall, Washington continued with business as usual.

The Barack Obama administration, like the Bill Clinton administration before it, discovered the immense power of the bond market. The Inernational Monetary Fund and the World Bank, meanwhile, didn't fundamentally change their policies. And the European Union, led by tight-fisted Germany, continued to back austerity. All the major economic actors held to the old orthodoxy even though it flew in the face of common sense and common decency (though not in the face of the bottom line).

[AnotherMcIntosh]

1. Good, except for the phrase "Everyone except Big Money." n/t