ARTICLE: “What Not to Do in a Crisis: The U.S. tries to learn from Japan’s mistakes, which included ignoring stockpiled bad debt,” by Anthony Faiola, Washington Post National Weekly Edition, 22-28 September 2008.
THE FINANCIAL CRISIS: “Crisis Stirs Critics of Free Markets: Around the World, Calls to Reconsider U.S.-Style Policies,” by Peter Stein, Raphael Pura, Gregory L. White, and John Lyons, Wall Street Journal, 25 September 2008.
ARTICLE: “Lehman’s Demise Triggered Cash Crunch Around Globe: Decision to Let Firm Fail Marked a Turning Point in Crisis,” by Carrick Mollenkamp, Mark Whitehouse, Jon Hilsenrath and Ianthe Jeanne Dugan, Wall Street Journal, 29 September 2008.
THE GLOBAL VIEW: “Bloodied But Still Strong: Many overseas feel betrayed by Wall Street’s crisis. But most expect America to continue dominating the world economy,” by Jack Ewing, BusinessWeek, 6 October 2008.
THE FINANCIAL CRISIS: “EU Proposed New Bank Regulations Amid Bailouts: Cross-Border Banks Outgrow Oversight By Home Countries,” by Joellen Perry and Alistair MacDonald, Wall Street Journal, 30 September 2008.
OP-ED: “The Establishment Lives! Paulson, Volcker and the rise of Progressive Capitalism,” by David Brooks, New York Times, 23 September 2008.
Good stuff starts to appear.
The Japanese tell us that watching our response on the current financial crisis, when compared to their own slo-mo response across the 1990s, is like watching time fly by in dog years.
Actually, that’s a great quote from Adam Posen, deputy director of the Petersen Institute for International Economics:
The U.S. is moving in dog years compared to Japan. Every one year of action here is about equal to what it took Japan seven years to do.
By design, that's the point of this dialogue.
Of course, the Japanese tell us to expect worse down the road, but that’s not the point. As I wrote in either PNM or BFA: when you see danger/crisis, your best bet is to run toward it—not away. Because it will catch you in the end. So best to rip the band-aid off quickly.
Me? I see Obama’s first term starting with recession, but enjoying the good timing that Reagan did regarding his re-election campaign.
Naturally, we will be forced to endure all manner of knee-jerk declarations of the “end” of the American model, but the American model is a helluva lot more than just Wall Street’s latest machinations and the degree of government intervention they trigger. The real model remains the same: free trade, free markets, and big firms surrounded by small entrepreneurial ones.
Over time, there will be a lot of 20-20 vision offered on the Lehman non-intervention and whether it was a good call, but somebody was going to be selected—eventually—as the example fall-guy.
The sense of “betrayal” abroad is a bit much, as the BusinessWeek piece argues:
As the world grapples with the fallout from Wall Street’s shenanigans, there’s no shortage of consternation, and even anger. But so far the international image of the U.S. economic model has shown amazing resilience. Lehman Brothers may be in the morgue and AIG on government-funded life support, but most businesspeople think the U.S. is more about Silicon Valley and Hollywood than the erstwhile dynamos of Wall Street. Even in China—where broadcaster CCTV-2 has been running two hours of special programming every night about the financial crisis—the U.S. is still a land to be emulated. “I see two Americas: One is wealth-creating, innovative, with people with Bill Gates, and the other is made up of speculators,” says Wang Jianmao, an economics professor at China Europe International Business School in Shanghai. “China should learn more from the wealth-creating America.”
The real issue is who leads global capitalism by example if we don’t? It won’t be Europe, nor Russia or China, as the article argues. It still needs to be us.
Why? Because globalization will never be a post-American world. It’s our progeny, our creation, our order.
Will there by new regulations? Of course. Will Europe be a primary source? I hope so.
But where we need to go—and lead by example globally—is toward what David Brooks, in a brilliant op-ed, is calling the next era of “progressive corporatism.”
As the frontier closes, the competition gets too hot. First comes the populism, then the progressivism. That’s the American path, now applied to an American world.
Post-Caucasian is not post-American. Remember that.
And check out Cartoon Network or Nick if you don’t believe me, because the future is already here—and being handled quite adeptly, thank you—in the zero-to-5 age group.
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Comments (1)
America is like Madagascar. Evolutionary biologists love to study Madagascar because it has numerous plant and animal species that are unique. However, as an island that split off from the African mainland not that long ago, you can see the relationship of those species to species found in Africa. For example, lemurs exist only in Madagascar, they are primates that share a common ancestor with the monkeys, apes and humans which evolved in Africa, but the lemurs in Madagascar went off in their own evolutionary direction.
America has a lot of quirky, unique rules which, like Madagascar, evolved along a separate path from the rest of the world. We are not metric. We use knives and forks differently from Europeans. We have lots of legal rules that are unique in the world, and not always good ones (runaway civil juries are a uniquely American phenomenon). We don't have a VAT. And our banking system is like noplace else in the world. In the post-Caucasian world, a lot of American quirkiness is going to go, as our institutions will have to get more in line with the rest of the world.
Posted by stuart abrams | October 8, 2008 5:11 PM