Blog #3 – Paul Mason “Meltdown-The End of The Age of Greed”

Paul Mason argues in this video clip that the neo-liberalism ideology is failing doctrine under American deregulation.  He describes the effects of the crisis in stages as acid burns through the floors as in the film’Aliens’.

The first floor it melts through is the real economy.  At the initial onset of the crisis, politicians argued that the real economy was fine, but it wasn’t.  The second floor is the state level.  Through massive bailouts and quantitative easing, the government intervened and pumped massive amounts of capital into the economy to keep it afloat.  But now the problem of that save is in serious jeopardy.  There are arguments of whether it really helped to save those that were “too big to fail”.  Hyperinflation fears are real and the delicate balance of interest rate control will dictate whether we have another crisis.  The third floor is the now threatening relationship between the classes and states.  Paul Mason argues that with the riots that occurred in France and Greece, that globalization is at a decline and coming to an end.  Further more he believes in a reverse globalization that will throw us back into the 1930’s from the currency wars.  He firmly believes that currency wars leads to a trade war.  Impending trade sanctions against China is imminent because of the currency rate freeze that the Chinese are blatantly doing. In conclusion, Mason’s biggest concern is the oncoming currency/trade war.  Paul Mason continued the interview through a q and a about the UK banking system and the unseen affects of QE.

I do not agree with Mason on some of this issues regarding the US entering a trade war with China.  He firmly believes through interviews from the left and right that a trade war and sanctions is inevitable from democracy.  The value invested from both countries show an almost inability to enter a trade war with China.  China’s main goal against the US is not to out trade but to have more political and fiscal influence in other countries in Africa and Asia.  China uses a moral and political theorem to combat everything that the US stands for and would never put itself into a position of loss with a sanction from the US.  The loss of the import economy from China to US would cripple the already one-legged economy of the US.  With high unemployment rates, fears of hyperinflation, and uncertainty of the market, the US is in no position of hegemony to openly declare trade wars against an economy like China.  To move forward, the government needs to first show transparent effects of QE and the bailouts, re installment of the Glass-Steagall act, and restructure and enforcement of its regulation.  The notion that globalization is a dying doctrine is ludacris in a technologically growing world, regardless of the effects of the economy.  The globalization process has come along to such a high degree that it will be impossible to “reverse” the situation to the 1930’s.

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One Response to “Blog #3 – Paul Mason “Meltdown-The End of The Age of Greed””

  1. Prof. Hala says:

    Brilliant re-cap — you lay complex ideas very clearly, a great skill. And I find your counter-argument on a possible currency/trade war with China very persuasive.

    Your more general point about globalization being irreversible is also critical and you may be right. It’s worth noting, though, that historically the progress of economic globalization has been reversible. By some key measurements, the world economy was perhaps even more integrated economically in the late 19th century than it is today (Robert Wade and other political economists/geographers have done such studies), and certainly more than it was in the 1930s. As you note, uncertainty is perhaps the defining quality of our time, especially in economic terms.