Monday, January 4, 2010

The Great Depression That Wasn't (part 1)

If you've read one essay by Fareed Zakaria, you've read them all? Maybe. But luckily for Zakaria, his one essay is pretty darn good. In the latest version he neatly summarizes what anyone who has stopped reading columns by Paul Krugman long enough to look out the window already knows:
Despite the turmoil of the past year, it's important to remember that more people have been lifted out of poverty in the past two decades than in the preceding ten.

The current global economic systems is inherently more resilient than we think.

The diffusion of knowledge may be the most actually be the most important reason for the stability of the current [global economic] system.
If you're under the impression that these claims ignore the documented, devastating impact of the global financial crisis on the global majority earning less than $3/day, read this exchange between Bill Easterly and the World Bank's Martin Ravallion.

Assessing the impact on the global financial crisis on people in the poorest places is not an easy matter--one complicated by many factors including the fact that the bubble in commodity prices burst (+ for the poor) at the same time as the global economy tanked (- for the poor). Certainly, the downturn has been bad for everyone. But did the negative impacts of the global financial crisis overwhelm all other gains (e.g. the global revolution in mobile communications) even when one only considers the past two years? Not obviously the case.

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