Globalization takes a big hit…
European Central Bank President Christine Lagarde warned that the globalized nature of the euro area’s economy makes it highly vulnerable to systemic shocks from supply chain disruptions.
“There are signs that the global economy could increasingly be a source of shocks for Europe rather than a stabilizer against volatility,” Lagarde said.
- Just-in-Time Economy Becoming a Problem for Europe, Lagarde Says – Bloomberg
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By Gregg Wall (10-16-2021)
This was the week when many of neoliberalism’s problems, and its twin's, globalization, came home to roost.
Neoliberalism is little more than laissez-faire, that is to say libertarianism in the extreme… where untrammeled markets rule, banks use free central bank money – not to lend – but create monopolies & cartels, and where billionaires are free to buy and purchase Western governments. As for globalization, it’s the apex of neoliberalism applied to the global economy… where billionaires and monopolists use the global stage to conduct labor, regulatory, and tax arbitrage (essentially pitting nation state against nation state, in a race to the bottom). Outsourcing, consolidations, crushing labor, the soulless commodification of all human endeavor, foreign supply chains, and just-in-time delivery are some of globalization’s hallmarks.
While animal spirits and markets may have their place in individual sectors of the economy (especially in well-regulated businesses, with plenty of competition), as JMH has written on more than one occasion, the greed that defines neoliberalism and globalization is no way to run a democracy or a national economy.
That became abundantly clear, again, this week, as supply-side inflation skyrocketed, and global supply chains continue to fall apart and are threatening economic recovery. As Madame Legarde pointed out, I paraphrase, so much of human endeavor is now dependent upon monopolies and just-in-time delivery that if one or more points along the supply chain collapses, the entire system or economy has a very big problem. Further aggravating inflation, tearing into consumer pockets, labor’s wages, and pushing the economy into recession?
And the ECB’s head banker isn’t the only person who has noted the problem… President Biden also sounded off loudly this week on supply chains, bottlenecks to economic recovery, shortages, and inflation that, well, directly threatens his second term. It appears that POTUS Biden and establishment Dems were counting on massive vaccine uptake and a reinvigorated U.S. economy to get them off the hook from fulfilling the president’s progressive campaign promises. That’s speculation on my part (although it would explain endless delays in passing Biden's two-track infrastructure bills), but what isn’t in doubt is that globalization and neoliberalism – as means to rule an economy and government – are, again, an unmitigated disaster.
Now, with the US recovery under threat, pictures of empty store shelves … just-in-time for the holidays… and the economy struggling to create well-paying jobs, it’s all looking like a photo-op, and a massive Christmas gift, for the GOP.
Never again should our country and our economy be unable to make critical products we need because we don’t have access to materials to make that product.
Never again should we have to rely too heavily on one company or one country or one person in the world, particularly when countries don’t share our values when it comes to labor and environmental standards.
I’ve said before: We’re in comp- — we’re in the competition for the 21st century. We are America. We still have the most productive workers and the most innovative minds in the world. But the rest of the world is closing in, and we risk losing our edge if we don’t step up.
Well, Mr. Biden and his Senate colleagues would certainly know… many of the senate gerontocracy were around for much of the last forty years: letting Wall St blow up, not once but twice; allowed the US economy to metastasize into cartels and monopolies; authorized the export of the US economy and middle class offshore; and kowtowed to billionaires and corporate power with lickspittle adulation and blind devotion. Ah, neoliberalism and globalization at its zenith.
And after crushing U.S. labor all these many years, American workers are having a moment. Walking off jobs, going on strike, and demanding better working conditions, benefits, and pay. Long scorned and looked down upon with condescension -- by boardrooms, congress, and C-suites -- it turns out that the vast majority of American workers truly are essential. But not so much billionaires, who now busy themselves with ego gratification and space races with Captain Kirk. Thanks to the FED’s easy money policies – minting the exceptionally wealthy out of thin air, along with trillions in dollars – billionaires are a dime a dozen and entirely, nonessential. Many no longer create anything, certainly not jobs or opportunity; but instead ride a speculative wave as the FED prints money, because the very same rich refuse to pay taxes (despite holding obscene amounts of wealth).
My guess… the fun is just getting started. Greed, globalization, neoliberalism – and the resulting corruption of the US government – will mean continued economic shocks. Per the usual, the disenfranchised and the poor - nearly fifty percent of society - will pay the price. Sadly, the Dems continue to burn up the legislative clock and do absolutely nothing to address fundamental structural defects, both economic & political… let alone address and meet Biden’s commitments & obligations to the American people.
All too common, America’s politicians make a great show of addressing the symptoms of the problem -- contrived, foreseeable, & manipulated shortages in supply -- instead of the disease itself: greed, globalization, & neoliberalism.
Copyright JM Hamilton Publishing 2021
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