Sunday, October 10, 2010

Neoliberal pope decries US rapid 'thirdworldization'

Worth watching this interview at Russia Today with the father of Reaganomics Paul Craig Roberts (not my piece of cake, you can imagine, but still interesting).


We are almost a Third World country now, he says. True that his blame of "the government" is partisan and seems to overlook the key role of the Reaganist economic policies he himself invented and Republican governments, notably that of Bush Jr., in all this disaster.

He also seems to obviate the fact that growing unemployment is largely due to the suppression of some 160,000 public jobs, only partly offset by 'private' job creation in healthcare and food services.


Why?

The key issue is anyhow, why US qualified IT workers are bound to unemployment or emigration to places like India? I don't find anything in the interview nor at the original source at the Intel Hub, explaining this issue.

However I'll give a tentative answer: cost of life. Cost of life forces salaries to remain high, specially in qualified jobs, whose workers are not expected to live in slums but rather to have a decent to affluent lifestyle. Cost of life is primarily determined by the cost of housing, which, as we know has been kept artificially high in the USA and other western countries without enough government welfare policies (Spain, Britain). There are other factors but I am pretty sure that the disparate prices of housing, driven by a bubble that now is being held artificially by the governments and central banks, is the main one. Other elements are cost of university education, that in the USA has students heavily indebted before even getting their first job, and then of course other daily costs such as food and clothing (food specially being driven artificially high by public subsidies in both the USA and EU).

However there may be other factors besides the high cost of living and the outsourcing of jobs to cheaper economies in the global market. Feel free to discuss.

I just wanted to show how my impression of many, if not all, former First World economies are being thirdworldized, is shared by other intellectuals, even in the rather far right end of the political spectrum. Notice by the way the Napoleon picture at Roberts' room, an icon of far right liberals.

Ironically this process is being driven by the same ultra-Capitalist and globalizing ideas that Roberts himself promoted, even if he is unable to realize it. Arguably wise protectionist attitudes like those of China and, to some extent, India are in fact more likely to produce healthy economic results for the respective countries, while allowing outsourcing of your industries to cheaper and poorly regulated locations can only destroy the local economy.

In this sense I strongly advocate for some policies (within a Capitalist frame):

1. Making capital emigration difficult if not impossible. Nations, regions and towns cannot afford to allow industries to emigrate, leaving the locals unemployed. Certainly not without paying a high price for it.

2. An import policy based not on idiotic generic agreements like WTO but on well balanced bilateral agreements and on wise protectionist taxation that punishes low ecological and labor protection by other states. So you do not allow free unions? You pay a 50% tax in all exports here, you do not have half-decent environmental policies, you pay a 50% tax in all exports here.

Of course the bourgeois oligarchy, who knows of no national or local loyalties but just of money and power, is opposed to anything like this, because they make much more money with a "free" (unregulated) global market. But local economies cannot afford to pay by these rules, or lack of them in fact. It is simply suicidal.

Sadly enough, today governments only have ears for the oligarchs and their very particular interests, totally against what historical wisdom advises.

And that is why we need a revolution of some kind. Because this sell-off system is just unsustainable in the very short term.

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