I agree with Hillary for once. Turning this country into the word's largest beggar is pathetic, but our current downfall is our own doing. Reagan unleashed a Pandora's box of irresponsible economic practices. (We can trace the institution of APR mortgages to Reagan's hatred of governmental regulation.) The war in Iraq - which Bush started so he could be called a :"War President:" - and lied to Congress about 953 times. (according to a recent article on earthlink.net) has destroyed our international image.Our unwillingness to break free from fossil fuel not only endangers our planet but cripples our economy. Furthermore, Democrats tend to feel that internationally we can't have too many friends; Republicans feel we can't have enough enemies. It's really ironic that a President who has literally given the finger to the world dozens of times is now touring the world with a palms-up open hand. (:"Brother can you spare a dime?") We need a total and complete regime change. Incidentally, a stock market with stricter standards of honesty and integrity might actually attract foreign investors rather than drive them away.
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The Supplicant-in-Chief
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Certainly Bush himself heard an earful about this on his trip. A "universal concern" he heard from foreigners, the president told us at that long chat session, was that "the United States will not welcome foreign capital … I heard it from entrepreneurs. I've heard it from government leaders. They are concerned about reinvestment of dollars back into the United States."
Some experts think that as long as Washington and other governments don't interfere, the markets will straighten things out. With the dollar so weak, America will turn into an investment haven in 2008, says Moises Naim, the editor of Foreign Policy magazine. "There will be a massive flow of foreigners buying into the U.S., not as supplicants but because it's a bargain place to do business." With these investments being so diverse—it's not just the Japanese this time—America will once again be able to get away with its fiscal irresponsibility and poor savings habits, with little loss of global power. The sovereign wealth funds, after all, still represent only a fraction of overall foreign investment flows.
Perhaps. But other experts, like Kenneth Rogoff of Harvard, a former economist at the International Monetary Fund, suggest that America might suffer a more permanent loss of prestige and power. "There is something deeper going on here. The dollar might never be the same. The U.S. has had an incredible bull run since the mid 1980s. It's been one big, long boom. People have gotten used to it, and it elevated the position of the United States in the world." Today the humiliation of Wall Street because of the subprime scandal "is quite a comeuppance," he says. And Bush's lack of leverage with the Arabs may be symptomatic of a chronic condition.
Many U.S. analysts this week are indulging in a kind of told-you-so triumphalism. They are gleefully pointing out that, contrary to conventional wisdom, the global economy is not in the least "decoupled" from the U.S. market. They say the brief plunge of Europe's and Asia's markets in response to fears of a U.S. recession proves, yet again, that America remains the dominant force on the world stage. The underlying story, however, is that we are out there begging for help on every front. Hillary may consider this pathetic. But whoever wins the White House will be in the same quandary next year.
© 2008
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