| Published on 07-10-2008 In General | | Viewed 1660 times | Written by Girish Nikam | | Is Bush's "bail out" economy a role model for Manmohan's India? |
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It makes one dizzy, trying to follow what's happening in the United States. One may ask why should one follow what's happening there at all, when there is so much happening in our own country—killings, rapes, conversions--- oh yes, durga pooja (yes its happening right now outside my window)? Well, if one has to answer that question a bit cheekily--- because our Prime Minister has told the President of the United States of America, George Bush, how we all Indians "deeply love" him. Is that not enough reason to follow how our beloved Bush is doing?
Well, if that is not a good enough reason, than the way our stock markets are plunging and our FDIs and FIIs are being withdrawn is certainly another reason. Anyway, now that there is this attempt to manufacture this euphoria in this country, following the passing of the nuclear deal in the US Congress, it is also appropriate to keep track of that great country which is doing "soooo much" to deliver us from the dark ages of nuclear isolation.
Now that we are expected to come out of the dark ages and our economy is expected to be benefited by this large hearted largesse of our beloved Bush, one thought one should do some number crunching. Not being a trained economist---a degree in economics certainly does not confer that status on one--- yet, there is no harm in looking at some numbers. One is not sure if all the numbers which is to follow will make a lot of sense. That would be left for the readers to decide. But these are certainly some interesting numbers.
Having followed off and on the US economic crisis, simply because it is affecting many friends there, apart from affecting our own country and most countries around the world, it was time to look at the figures.
When Bill Clinton, that most charming US President who drove the Indian Parliamentarians into a frenzy right inside the Central Hall of Parliament just by his presence, left office he had almost fixed the US economy when he retired n Jan.2001. The US economy was then a surplus economy with a $ 125 billion surplus. What is Bush, almost at the end of his term leaving? A $410 billion deficit, which according to New York Times, may just balloon further in the coming weeks.
Again on the external debt front, when Clinton left office, it was $ 862 billion, while Bush has already run up an external debt of $ 13.77 trillion---- which is a phenomenal 14 times increase. Inflation which was 2.2 percent in 2000 end, is now 5.6 percent and climbing. Unemployment which was 4.2 percent has jumped to 6.1 percent. Those below poverty line, yes there are BPLs in America too, which was 12.7 percent of the population, Bush has managed to bring it down by .2 percent to 12.5 in all of eight years.
The GDP growth rate which was 4.1 percent when Clinton left has come down to 2.1 percent in the second quarter of 2008.
Bush was no economic genius, everyone knows. But the climax of his belief in neo-liberal policies, which he tried to impose on the world, and India being one of them which has been increasingly getting lured, is the latest financial crisis in US. America with its extreme belief in capitalism does not think a moment before appointing CEOs of private corporates to head their Treasury. Imagine Mukesh Ambani or Anil Ambani becoming the Finance Minister of India! But it happens there. So the former CEO of Goldman Sachs, one of the leading investment bankers in the world, with profit being the only motive, was appointed by George Bush to be the Treasury Secretary in 2006.
Just a few months back, when many US economists were warning of the things to come, Henry Paulson said, US economy was sound, and its corporates were shining. And now we see the US doing what Indira Gandhi did in 1971, when she nationalized the private banks. Indira Gandhi was criticized, she still is in the neo liberal quarters, for it. For Americans who are brought up with huge dosage of anti-socialism---left wingers are considered criminals, rascals, if not worse by a significant section---- and free market capitalism the ultimate mantra, this $ 700 billion bail out package has come as a rude shock. They are yet to comprehend what it means and whether it is good or bad.
They are unable to decipher if bailing out incompetent, corrupt and inefficient corporates for their own fault is worth it, both in the short or long run. Their politicians—both Democrats and Republicans facing elections next month--- have got together to pump such huge public funds to save the bumbling corporates. Obviously the election funding was at the corner of their minds when they did it, knowing how US elections are heavily dependant on corporate funds.
An American columnist, Ruth Conniff has pointed out how this massive $ 700 billion could have been used alternatively. Ruth incidentally points out that these were all measures the Bush Administration considered as unaffordable. They include;
* covering health care costs plus out-of-pocket medical expenses for all of America's uninsured----- cost $100 billion
* Universal pre-school------cost $ 35 billion
* Rebuilding New Orleans----cost $ 100 billion
* Free college education for everyone--- cost $ 50 Billion
* Total energy independence for US
With a shift to renewable sources within 10 years—cost $ 500 billion
Instead of spending on these measures which could have helped all Americans, especially the poor and the middle class, Bush and the US Congress decided to rescue Bear Sterns, nationalize Fannie Mae and Freddie Mac, buy out AIG, and many more on the verge of collapse. All giant financial entities with footprints all over the world, who hated Government interference, speculated recklessly and lost heavily, and now are shamelessly dependant on the US Government to bail them out.
We here in India have been given regular lectures in the last few years about how we need to privatize more, how we need to follow these financial "giants", and how we are too slow in liberalizing, and how the spoil sport leftists have been putting a spoke in the reformist wheel.
Just before ending, let's look at a few more numbers to get a perspective. During these last eight years, of Bush administration, India's GDP grew from $ 1.805 trillion to $5.21 trillion, growth rate from 5.5 percent to 9.8 percent(06-07), exports from $ 36.3 billion to $ 125 billion, total revenues from $ 35.8 billion to $ 109.4 billion. And we are now the fourth largest economy in the world. All this while the Governments were apparently "hamstrung" by opponents of economic reforms.
Hopefully Prime Minister Dr.Manmohan Singh and his ilk in the Government, as well as the drum beaters of American style neo-liberalism and free market capitalism, will sit up and take note. Beloved Bush is not exactly our role model, is he? |
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