America and the New Financial World
The following is an excerpt from a recent opinion piece in the Wall Street Journal. For links to this and other writings, visit River Twice Research.
Zachary Karabell is an economist, author and President of River Twice Research.
Soon enough, America's financial crisis will wind down -- maybe in a month, maybe in a year. Yet regardless of when, this crisis marks the beginning of a new era for the U.S. For more than six decades, from the end of World War II in 1945 until now, the U.S. was the hub of global capital and capitalism. In the years to come, it will remain a vital center, but not the center.
In 1945, after an exhausting three decades of exertion against Germany, the United Kingdom emerged militarily victorious only to see itself economically exhausted. A year later, it was bankrupt, unable to find capital and on the verge of collapse. It had nowhere to turn but the U.S., which then dictated terms that amounted to a withdrawal of Great Britain from the world stage. The U.S. is not yet in the position of Great Britain, and our creditors in China are not yet as we were then. But absent a more humble and realistic attitude toward capital in Washington, that is the path we're headed down.
Zachary Karabell is an economist, author and President of River Twice Research.
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Kevin Phillips writes very eloquently on these issues and couples them, as they must be, to energy.
See:
AMERICAN THEOCRACY
and
BAD MONEY
both available on Amazon.
Our path is nearly akin to Great Britain's...and the Dutch before that. The only reason why China won't have the same opportunities is that the 3 previous financial giants' fortunes were built on cheap forms of energy that they had in abundance and mastered -- which built their economy (Dutch - wind/water, British - coal, US - oil).
October 8, 2008 1:54 PM | Reply | Permalink
China - people
October 8, 2008 2:29 PM | Reply | Permalink
True, but that would be going back to an Egyptian style society, no?
Also, sort of flies in the face of the idea that cheap energy begets progressive government. It's what's been driving us so far...
October 8, 2008 4:26 PM | Reply | Permalink
I'm thinking of the Sharon Astyk assertion that, "the majority of farmers, builders and factory workers use some machinery, but the primary engine of production is human work." She's talking about production in today's third world.
http://tpmcafe.talkingpointsmemo.com/talk/2008/09/finances-workers-food-oil.php
October 8, 2008 7:21 PM | Reply | Permalink