Tuesday

The Economic Crisis and Education

by David Hursh

As I write this, the United States and much of the rest of the world face an economic crisis caused by several decades of neoliberal policies. Neoliberal proponents, such as Thomas Friedman, have hijacked globalization to argue that we have no choice but to adopt neoliberal policies. In The Lexus and the Olive Tree (1999), Friedman asserted that “the driving force behind globalization is free market capitalism” (1999, p. 9) and, therefore, we have no alternative other than to promote deregulation, privatization, and markets. However, recent economic events reveal neoliberalism as a flawed and failed policy, and, consequently, governments are now intervening to bail out the finance industry.

The financial collapse came about as minimally regulated investment banks sought profits through risky mortgage loans, thus contributing to a housing bubble that finally burst. Faced with imminent collapse of the economic system, the Bush administration and Treasury Secretary Henry Paulson, concluding that government is not, after all, the problem but, instead, part of the solution, proposed to use $700 billion in public funds to pay for the questionable loans.

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