America Loses Its Dominant Economic Role - Spiegel

[Tierra_y_Libertad]

A long but very illuminating article about the financial crisis, it's origins, and it's global effects.

http://www.spiegel.de/international/world/0,1518,581502,00.html

There are days when all it takes is a single speech to illustrate the decline of a world power. A face can speak volumes, as can the speaker's tone of voice, the speech itself or the audience's reaction. Kings and queens have clung to the past before and humiliated themselves in public, but this time it was merely a United States president.

Or what is left of him.

George W. Bush has grown old, erratic and rosy in the eight years of his presidency. Little remains of his combativeness or his enthusiasm for physical fitness. On this sunny Tuesday morning in New York, even his hair seemed messy and unkempt, his blue suit a little baggy around the shoulders, as Bush stepped onto the stage, for the eighth time, at the United Nations General Assembly.

He talked about terrorism and terrorist regimes, and about governments that allegedly support terror. He failed to notice that the delegates sitting in front of and below him were shaking their heads, smiling and whispering, or if he did notice, he was no longer capable of reacting. The US president gave a speech similar to the ones he gave in 2004 and 2007, mentioning the word "terror" 32 times in 22 minutes. At the 63rd General Assembly of the United Nations, George W. Bush was the only one still talking about terror and not about the topic that currently has the rest of the world's attention.

"Absurd, absurd, absurd," said one German diplomat. A French woman called him "yesterday's man" over coffee on the East River. There is another way to put it, too: Bush was a laughing stock in the gray corridors of the UN.

[slipslidingaway]

1. Kick for later n/t

[SidDithers]

2. Me too...

posting to make it easy to find :)

Sid

[slipslidingaway]

9. Now I just have to make the 48 hour deadline :)) n/t

[SammyWinstonJack]

3. bu$h legacy, laughing stock of the UN. Heckuvajob george.

:thumbsup:

[Indenturedebtor]

4. Don't forget... when they laugh at him they laugh at us :( n/t

[philly_bob]

5. They would cheer President Obama! n/t

[tama]

8. Well

I see nothing to cheer about in President Obama.

Just like in South America, before any real changes can happen, your battle cry needs to be: "All Of Them Out" - dismanteling the two party system, getting rid of elite parasite class, writing a new constitution etc. - a grassroots revolution.

Unless you prefere a fascist police state, of course.

[Virginia Dare]

14. Just curious but do you know anything about Barack Obama?

have you read his books?

If you truly feel that way, it seems like this is the wrong board for you.

[tama]

15. I know

his public statements support US militarism, when 1st priority is to demilitarize US, all the way.

[Virginia Dare]

16. You implied he would support a fascist military police state..

do you honestly believe that?

[tama]

17. Well

given that US is allready a "fascist military police state" in many aspects, is Obama a man of the bipartisan establishment or a radical revolutionary?

[Virginia Dare]

18. Much of those aspects came about during Bush/Cheney

personally I trust that Obama will work to scuttle a good deal if not all of those particular policies. A Washington under Obama/Biden will not look anything like a Washington under Bush/Cheney.

But you're looking for a radical revolutionary and I don't see that in them either. I just don't know why the two have to be mutually exclusive.

[philly_bob]

19. Tama, I was saying UN General Assembly would cheer Obama more than Bush

Do you doubt that? If you do, I fervently hope we get the chance to find out.

As to your other comments: Many -- including myself -- preferred more progressive candidates in the primary. But when Obama got the nomination, and McCain/Palin got the other nomination, we pushed aside our doubts about Obama (he is definitely NOT a radical revolutionary) and are working for his election.

Attacking Obama from the Left -- hey, let's do it AFTER he gets elected!

P.S. I assume you're going to vote for Obama in November, and not some third-party longshot.

[tama]

20. Not going to vote Obama

Ain't American. And sure, Obama is better liked than Bush.

What I'm sayin is that people of US have no hope of real change before you get rid of the two-party system.

[philly_bob]

22. Tama, what multi-party system should we look at as a model?

The two-party system is not written into the U.S. Constitution, although it is written into some laws (which could be changed). The two-party system would change if Americans go to their voting authority and change their registration to a third party. (I might do that -- after Obama wins.)

Perhaps you mean that the progressive party in USA (the Democrats) should actually BECOME progressive, expelling Joe Lieberman and "Blue Dogs" and DINOs ("Democrats in Name Only")?

[tama]

23. If you are really interested

mere multiparty system is not a solution, since all political parties without exception become corrupted. The solution is direct and participatory democracy to keep the representational system in check.

Power of initiative to all citizens on all levels of administration, citizen's initiatives that receive some minimum of support to be decided in referenda. Power of citizens initiative includes the constitution and constitutional amendments.

In addition to this I have visioned a system of two chambers:

1. "Senate" of elected officials that takes care of daily administratrative work but has only the power of initiative and cannot make any formal decitions. It drafts bills to be decided by

2. "House" of statistically representative take of citizens drawn by lot - who can do their work at home throug intranet - who vote and decide on the bills drafted by the "Senate".

There are lot more ideas, but won't go into further detail in this post.

[philly_bob]

25. Thanks for sharing ideas. A bit Utopian, but interesting.

I think I would oppose your "House" of citizens drawn by lot. You might get a Sarah Palin!

[tama]

26. Yeah

And giving everyone right to speak for and represent Mother Nature in legal procedures was also utopian, until new constitution of Ecuador.

Citizen's drawn by lot to serve democratic functions is of course very old idea, from Athenian democracy to jury duty in US. Modern tech allows new network versions of old idea.

The most basic idea is separation of powers, not giving the power of initiative and power of decision to the same political bodies.

[ProgressiveFool]

6. There's some truth in the article, and it's interesting to see the foreign perspective

But rumors of the United States' demise are therein greatly exaggerated.

Yes, things are bleak, and we all see that here, but there's a vein of schadenfreude in that article (understandable since Spiegel is German) that distorts the view a bit too far into doom and gloom. Just as America's potential was undiminished even in the worst years of the Great Depression, so it is now. Things will be rough for a bit, but with the right leadership and the right priorities, we will emerge as strong as before.

Of course, by the time we get back on our feet, we might have Russia and China, and possibly Brazil or India to contend with as co-equal superpowers, with the EU itself in the dominant position.

[tama]

7. So

you are saying that the "fundamentals are sound" - where have we heard that before? :D

Humongous debt bubble and infrastructure in total shambles. That is all that US is now and comparing to Soviet collapse, it's really bad. Whereas a Soviet citizen dropped from the first floor and got bruised, US citizen is dropping from the top of the Empire State Building...

[ProgressiveFool]

12. no, not saying the fundamentals are sound

For me, the fundamentals = priorities, and those are way out of line. Currently the priorities of our financial markets are greed and lack of accountability, i.e. spreading risks so widely through the sale of derivatives that it is impossible in the end to tell where the real risks are.

The priorities need to shift to a greater emphasis on security, i.e. making sure there is adequate money to back the inherent risks, and a reasonable assessment of risk, and of value. More value needs to be placed on tangible goods and services, and less on trading financial hot potatoes. We will need to do what we can to bring back manufacturing, construction and innovation, hopefully through an emphasis on public infrastructure projects and R&D on alternative energy, and putting those innovations to work in large-scale manufacturing like the automotive industry.

Having now read the full article instead of the first couple pages, I have to say I jumped the gun a little bit on pronouncing it to be schadenfreude. There is a bit of that, and a bit of chicken little sky-is-falling mentality as well. What's striking about the article, though, is the number of economists cited, both American and international, who saw this all coming. The Germans warned against it, but were also taken in by the greed to some extent as well, as shown by various German municipalities who bought into financial products from American companies because the profits were so high, and are now left scrambling to come up with collateral to cover their obligations when those products evaporated.

But the author also calls this the end of an era without considering what comes next, other than saying that Asian banks will become the new dominant force by default. Obama is mentioned twice, and, while it is assumed that he will win, he is described as currently only focused on the politics of getting elected, and his future role is dismissed as having to most-likely take the US into a period of isolation and domestic belt-tightening.

That might be the case, but I prefer to believe that we will follow the FDR model of re-fixing priorities, building things from the bottom up and working together to solve problems domestically, while working together with the international community to solve security problems, leading by example rather than by command.

[tama]

13. Spreading the risk multiplies it

Quoting the article:
"The inventors of these complex securities hoped that they could be used to distribute risk more broadly around the globe. But instead of making financial transactions more secure, they achieved the opposite effect, increasing the risks. Today the notion of using "many shoulders for support," the constant mantra of the gurus of financial alchemy, has proved to be one of the catalysts of the crash.

American economist Raghuram Rajan, whom ECB President Trichet is frequently quoting these days, had a premonition of the current disaster three years ago. The total integration of the markets "exposes the system to large systemic shocks," Rajan wrote then in a study. Although the economy had survived many crises before, like the bursting of the Internet bubble, "this should not lead us to be too optimistic." "Can we be confident that the shocks were large enough and in the right places to fully test the system?" Rajan asked. "A shock to equity markets, though large," he continued, "may have less effect than a shock to credit markets.""

Needless to say, rest of the Global Capitalism is not happy about US but mortally afraid that this debt crunch systemic crisis of capitalism beginning in US is going to take also them down. What is allready clear is that this is the "end of the world as we know it" and no-one can say with certainty what will come next. Nothing is safe, not even the system of modern nation states.

Time again for most simple and basic truths, like "no unlimited growth in limited environment", "let's not destroy Earth's carrying capacity any more", "if there is human life after the collapse, sustainable small communities are not bad idea but good seed to plant even now" etc.

[closeupready]

10. I agree actually.

Don't know what else to add, but this is just a down period in our history. Things will turn around.

[Tierra_y_Libertad]

11. Actually, I saw the article as a bit too optimistic for the US.

I think the decline will be more rapid than the article suggests. I'm trying to envision a scenario in which the United States can, so to speak, make a comeback. So far, I'm drawing a blank.

I do believe that the United States will not go out with a bang, like the Soviet Union, but more with a whimper like Britain and France. A slow decline into 2nd rate power status. Hopefully, with as little bloodshed as possible.

I, for one, welcome it.

[eridani]

28. I'd say that Britain and France became better places after they gave up their empires

Hope the same holds true for us.

[eridani]

27. None of those countries you mention

--have the expense of maintaining 1000 or so military bases around the world, nor do they spend trillions on their militaries which isn't even included in their official budgets.

The British and the Soviets had to give up imperialism because they couldn't afford it. We will too, hopefully before destroying our society.

[Karenina]

21. must sleep... kick to mark...

[CabalPowered]

24. Excellent article

Thanks for posting this. :thumbsup::thumbsup:

[AuntPatsy]

29. God can this country be any more embarrassed? Why yes, if the repubs actually steal another

election and get away with it...perhaps that is why the military is being built up on American soil to ensure americans stand to attention....scary times ahead if such a scenario comes into play...

[OakCliffDem]

30. Kick