Archive for November 10th, 2012
Michael Casey’s “The Unfair Trade” — Worldwide Financial Collapse Weakens the Middle Class in Every Country
Posted by Barb Caffrey in Book Review on November 10, 2012
Michael Casey’s illuminating THE UNFAIR TRADE: How Our Broken Financial System Destroys the Middle Class is a financial book to be reckoned with. Casey has covered worldwide economics for Dow Jones and The Wall Street Journal, and specializes in discussing global economic trends. That’s why Casey was uniquely situated to write about the 2007-8 global financial meltdown . . . and it’s also why his book THE UNFAIR TRADE is so very good, so very readable, and so very important.
But I’m getting ahead of myself.
Casey’s main argument is that no matter what the country’s name, the middle class of that country has been left behind. This has occurred because of the rapidly-changing nature of the global marketplace on the one hand and the badly outdated financial regulations of just about every major country on the other. This has caused the “big banksters” (as radio personality Clark Howard calls them) to isolate themselves from the middle and lower classes, and it’s why, after the 2007-8 economic meltdown, these same big banksters were helped while the middle class people who’d invested at the behest of the banks got the shaft.
Casey went all over the world and found that no matter what the country, every single middle class person he talked to was disgusted with the economy (worldwide and in-country, made no nevermind). The belief worldwide is that the economic deck is stacked against the middle class; from China, which has an overly large amount in savings due to its own government’s policies, to the United States, where small and big manufacturers must meet the “China price” (AKA the rock-bottom price, which most of the time is provided by Chinese manufacturers), it seems impossible for the middle class to get ahead. And more than possible for the middle class to get left behind through no fault of its own.
What’s most important about Casey’s chronicles aside from his excellent reportage is the analysis he puts behind same. Simply put: Casey has found that what every single person has told him is the truth — the middle class, as a whole, is not doing better in this generation.
In fact, we are doing worse.
And there are reasons for that — pressing reasons — that Casey can’t help but mention. Some of it has to do with how interdependent all economies are with every other economy (even dysfunctional systems like North Korea’s must take this into account). Some of it has to do with outdated laws that don’t adequately take into account the rise of computerization and mechanization. And some of it has to do with the bizarre symbiosis between China and America, which must be read to be fully understood.
And even where the little guys win for a change — like Iceland — there are still huge losses. Casey went to Iceland and chronicled what happened there; the Icelandic government actually refused to bail out the three large banks doing business on their island. So what happened instead? Iceland’s three big banks went into receivership. This was actually helpful to the middle class over time, because the bank’s owners had to deal with the fallout, not just the bank’s stockholders or the little people who’d put their faith, trust and savings into the bank.
But in the short run the middle class was still harmed. (Which just goes to show that even in Iceland, the little guy still gets the shaft.)
Even though Iceland’s taxpayers were spared the agony of TARP I and II, they were really angry over the bank meltdowns, and rightfully so. The consequence of the implosion of the three banks was staggering. Unemployment went sky-high. People didn’t know how they’d get access to their money (fortunately the government stepped in, so most people did not lose everything). And at least one person was so angry over what had happened to him at one of the three Icelandic banks that he went and took the bank’s coffee machine; Casey reported that no one stopped the man because they understood that he was only acting out what everyone felt.
And that was the best-case scenario. The worst-case scenarios (in Spain, in Greece, and in Ireland) are still playing out to disastrous effect.
Look. You need to read THE UNFAIR TRADE to understand what’s going on; Casey’s writing is clear, distinct, often ironic, sometimes witty, and above all is extremely important. Because interdependence in global economics isn’t likely to go away; we must make sure that the laws in place do more than shield the people who caused the trouble in the first place, as if those bad laws stay on the books, it will be impossible for the middle class to ever regain its former stature. (Much less make any renewed gains.)
Bottom line: THE UNFAIR TRADE is one of the best books I’ve ever read on the worldwide economy. Period.
So do yourself a favor; read Casey’s book, think about what he says, and then insist that the safeguards Casey discusses be put into place. Because it’s most unlikely that the 2007-8 economic meltdown is the last meltdown we’ll ever see, so we’d best heed our wisest thinkers (such as Casey) while we still can.
–reviewed by Barb