Note to economics writers: your beloved free market is dead. Now tell us the real story about the global financial crisis, writes Alex Mitchell
For many years it was my conscientious belief that the worst practitioners in the media were celebrity reporters who did little more than rewrite press handouts supplied by agents for limelight-seeking B-grade actors and pop stars.
I've now revised my views and am convinced that the media's bottom-feeders are the economics writers.
In so-called normal times, these erudite commentators wrote very little and not very often. Indeed, they rarely came to work and weren't seen around newsrooms. They sat at home in their book-lined studies mousing their way through international websites looking for ideas for something to write about.
Having plagiarised a letter from The Economist, an editorial from the Washington Post, an article from the Far East Economic Review or the in-house report from a leading investment bank, they appeared in print, glowing with wisdom.
But when the world economy turned nasty, these charlatans and hucksters were quickly unmasked and regular reporters started asking each other: has that bald-headed egomaniac on three times my salary got any clothes on or not? Answer: No!
Almost one year ago the economics writers started to learn about the US subprime market but immediately rushed to assure us: "This is a purely American phenomenon and won't affect our banks or our economy".
When the subprime crisis deepened and spread to the counting houses of the UK and Europe, they shifted: "Things are worse than was originally disclosed but Australia has the finest regulatory system in the world and our four major banks aren't involved".
As US banks began to collapse and the economy started heading into recession, our gallant scribblers tried a new tack: "Clearly, the world economy is heading for global turmoil but Australia is fireproofed because we are in the midst of a resources boom. So stop fretting".
Then UK banks started to tumble, Iceland went into bankruptcy and the World Bank released dire warnings about the end of world growth and massive unemployment. "No worries", said our economics illuminati, "we have safety, security and stability from five little letters: China!"
Only a few weeks later the Chinese economy hit a wall, cutting production across heavy industry and construction and sacking a reported 20 million workers. The sale of iron ore, coal, copper, zinc and other resources from Australia began to drop and mining companies sacked thousands of workers in WA and Queensland. Our ever-confident economics scribblers were unfazed: "This is a temporary hiccup, exports will pick up when the world economy roars back at the end of this year or in 2010 and it will be bigger than ever!"
What characterises every response they have made to the unfolding economic crisis is their naïve, feeble and hopelessly misguided belief in a concept called Australian exceptionalism. They talk globalisation (enthusiastically) but, when the rest of the world's economy starts to disintegrate, they claim there's always a place in the sun for the lucky country. It's dangerous nonsense because there is no hiding place from this crisis.
The Rudd Government has decided that it will spend its way out of the global meltdown with a $42 billion stimulus package. The Prime Minister has already handed out $10 billion, most of which went into the pockets of the big retailers over Christmas and New Year, but the latest mega-package is the one aimed at securing his re-election with an early poll later this year or in 2010.
In the process, Rudd has reinvented himself, switching from arid economic conservative to Rooseveltian New Dealer. His 7000-word essay in the latest edition of The Monthly magazine sets out the parameters of his political assault on merchant banker Malcolm Turnbull and the Coalition's "aggressive" capitalism. It's a strategy devised by Hollowmen for shallow men.
It's also an attempt to breathe life back into the Labor Party which, over the past 25 years, has become infected with free market conservatism, opportunism (posing as pragmatism), nepotism, cronyism and corruption.
Will the economic stimulus work? I'm not an economics writer but I've noticed over the years that if there is a credit crisis it's quite lethal to create more credit and throw it onto the fire. Every Western government is going into deficit and all of them are following the same prescription. President Barack Obama's Administration has a mind-numbing $1.21 trillion package, Japan $120 billion, Germany $65 billion, South Korea $60 billion, Spain $38 billion, Canada $32 billion and the list goes on.
How are these massive sums of money going to be raised? Who is going to lend to nation states that are in recession and potentially heading for depression?
The idealist fantasy behind this world capitalist bailout strategy is that somehow the cracks in the system can be papered over by printing more money. It's what Robert Mugabe has been trying in Zimbabwe without any noticeable success.
The next stages of the crisis can be easily sketched: Not only will major corporations and banks go broke, but so will countries such as Greece, Hungary, Portugal, Egypt, Mexico, Peru, Pakistan and Malaysia. Protectionism has already started in the US ("Buy American", says President Obama) and the UK ("British jobs for British workers", says Prime Minister Gordon Brown) and that's a prelude to currency wars accompanied by trade wars.
Are the economics writers warning of these implicit dangers? No, they're hopelessly at sea giving risible interviews to the ABC trying to convince listeners that their beloved free market will be resuscitated, if not this year then next.
Meanwhile, world leaders are rushing from Davos to G7, G8 and G20 summits trying to save capitalism, which has passed its use-by date, when they should be trying to save the planet.
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