Panic Rules!: Everything You Need to Know about the Global Economy

Foreword by Jeremy Brecher
Introduction
Chapter 1 The Bloom off the Boom
Chapter 2 Deconstructing the Neoliberal Myth
Chapter 3 The Latest Bust
Chapter 4 Understanding the Crisis
Chapter 5 How Asia Caught the Flu
Chapter 6 The IMF to the Rescue
Chapter 7 What Should We Want? What Should We Fear?
Chapter 8 Mainstream Reform Proposals
Chapter 9 Progressive Reform Proposals
Conclusion Lilliputian Luddites Until Globalization Can Be Built from Below

An Excerpt from Panic Rules! By Robin Hahnel

Boom and Bust

Among economic systems, capitalism is the manic-depressive patient. Exuberance, unbridled optimism, and euphoria are followed by gloom, listlessness, and depression. But no matter how often the cycle is repeated the patient always believes the latest boom will last forever, only to feel foolish again when the bubble bursts. And no matter how often the patient reverts to manic behavior when taken off medication, the economic "psychiatric" establishment eventually succumbs to the patient's pleas to be taken off medication during the "ups"-freeing the exuberant economy from policy restraints-only to insist on placing the patient back on meds-re-application of necessary policy protections-when the unmedicated patient "crashes."

The Latest Boom

The truth is that neither part of capitalism's manic-depressive boom-and-bust cycle is "healthy." Like most capitalist booms, the benefits of global liberalization during the 1980s and 1990s were not all they were made out to be. In fact, most people in the world were worse off economically at the end of the latest boom than they had been when it began-that is, even before the over-hyped boom metamorphosed into the global economic crisis of 1997-98. How is this possible, you ask? We were told "the world economy grew at 3 percent a year in the 1980s and 2 percent in the first half of the 1990s," and that "low- and middle-income economies grew more rapidly, averaging 3.4 percent growth in the 1980s and 5 percent in the 1990s." We were assured that "growth in trade from increased trade liberalization that has gone hand-in-hand with increased private capital flows and financial integration,"