Imagine: U.S. an Emerging Market

from HuffPost:



David McWilliams
Imagine: U.S. an Emerging Market
Posted March 12, 2008 | 11:27 PM (EST)



The other day, I listened to Latin American economists and business leaders discuss the US recession. The Mexican central bank governor, referring to the carnage on Wall Street, the sub-prime crisis, and the credit crunch, jokingly remarked: ''At least WE didn't cause it this time."

He was referring to the fact that financial crises have a habit of starting in so-called emerging markets. Over the years, western stock markets have been rattled by such episodes as the Latin American debt crisis of the 1980s, the 1997 meltdown in the Asian economies, or the default of Russia in 1998.

All of these stories had one thing in common: the countries were living beyond their means and were over-dependent on foreign loans, which ultimately caused the entire unsustainable edifice to come crashing down.

The reaction from Washington to these crises has always been vaguely puritanical, sometimes distinctly moral in tone. After a crisis, the delinquent countries are told -- like sinners -- to repent and change their ways. Bashing the economic pulpit, the high priests of national probity in Washington advise these deviants to endure the pain, suffer the consequences of their own aberrant behaviour, reform their ways and be cleansed.

The Latin Americans, more than most, have had to accept regular lectures on economic purification from the northern Calvinistic continentals.

However, now that the US is going through its own troubles, resulting from precisely the same reckless behaviour that landed the emerging markets in trouble in the past, the message from Washington is very different.

Rather than telling the American people that they have to purge themselves after 10 years of binging, the American authorities are doing everything in their power to prevent any economic hangover.

The US is scrambling around for financial anaesthetics in whatever form possible. The Federal Reserve is slashing interest rates, the dollar is caught in a free-fall, and George Bush is ramming through yet another tax cutting/government spending package to try to stave off the day of reckoning.

America is trying to borrow its way out of this crisis, despite the fact that borrowing got it into this hole in the first place. ......(more)

The complete piece is at: http://www.huffingtonpost.com/david-mcwilliams/imagine-us-an-emerging_b_91268.html

Then Junior will hand the disaster over to someone else.

The repugs are gonna do all they can to avoid that day of reckoning until at least the day after Election day.