Last September 14, world trade talks broke down in Cancun, Mexico. Everybody
blamed everyone else. Before the conference, British delegate Patricia Hewitt
had predicted, "if we fail, it will be a disaster for world economy." And this
is true, for the collapse could stun the already fragile prospects of economy
recovery.
As you read this, the papers are probably full of the news that the US
economy is growing at the fantastic rate of over 6% a year. No wonder the stock
markets of the world have been booming. However, Michael Roberts points out that
in reality the economic growth that the US is now enjoying is an illusion. It is
based on unhealthy premises of state spending and a massive credit boom, neither
of which can last for much longer.
The big financial institutions and investors have become hugely optimistic
about the revival of economic growth and employment. They reckon that the
weapons of mass growth (WMG) will be found. Everything is looking better,
according to the latest intelligence sources, Messrs Bush, Blair, Schroeder and
Greenspan tell us. The reality is that US growth in 2003 was artificially created and will prove
to be ephemeral in 2004.