Just a Few More Words on the Washington Post's Newly Discovered Form of "Protectionism"

Adding to my earlier post, I just want to make two more quick points about that WaPo piece which characterized the UK's insistence that a bank it owns make loans to the citizens who bought it as a form of back-door "protectionism."

Let's look at some of the claims that staff writers Anthony Faiola and Mary Jordan make in the article.

In exchange for billions in taxpayer dollars to save major banks, some governments are requiring banks to boost lending at home.

Some experts say such political responses to public fury at financial institutions could hurt developing countries and roll back the globalization of finance that helped propel world growth over the past decade.

Citing "some experts" -- unnamed experts -- is, of course, the hallmark of really good journalism. But that aside, I find this a pretty stunning statement, given that the "globalization of finance" has everything to do with the mess in which we find ourselves today (see this piece for an explanation).

But that kind of uncritical statement is part of a broader trend. It's common in mainstream economic reporting to take it as a given that globalization has led to (or at least is correlated with) greater economic growth in recent decades.

The opposite is true. As a study by economists Mark Weisbrot, Robert Naiman and Joyce Kim (PDF) found:

It has generally been assumed that globalization has helped spur economic growth throughout most of the world. Even critics of globalization, and of the IMF and World Bank, have generally accepted this assumption. They have argued that these institutions have focused too much on promoting growth and not enough on other goals such as alleviating poverty and protecting the environment.

The official data for the last two decades (1980-2000) tell a different story. Economic growth has slowed dramatically, especially in the less developed countries, as compared with the previous two decades (1960-1980).

Correlation isn't causation, but what we (erroneously) call the "globalization era" is in fact correlated with slower economic growth than the period that preceded it.

Overall, in addition to slower growth, the most recent phase of corporate-led globalization has been marked by the following: