In his astonishingly prescient book, “The World Is Curved: Hidden Dangers to the Global Economy,” David M. Smick argues that we have inherited an impressive global economic system. It, with the U.S. as the hub, has produced unprecedented levels of global prosperity. But it has now spun wildly out of control. It can’t be fixed with the shock and awe of a $700 billion rescue package, Smick says. The fundamental architecture needs to be reformed.
It will take, he suggests, a global leadership class that can answer essential questions: How much leverage should be allowed? Can we preserve the development model in which certain nations pile up giant reserves and park them in the U.S.?
Until these and other issues are addressed, the global markets will lack confidence in asset values. Bankers will cower, afraid to lend. America’s role as the global hub will be threatened. Europeans will drift toward nationalization. Neomercantilists will fill the vacuum.
This is the test. This is the problem that will consume the next president. Meanwhile, the two candidates for that office are talking about Bill Ayers and Charles Keating.
McCain is talking not only about Ayers (and thank goodness!):
http://www.nypost.com/seven/10072008/news/politics/blame_barack_for_me__mac_132489.htm
He needs to talk also about what approaches we need to remedy the current situation. It could very well be that the bailout package was the wrong prescription.
[i]It will take, he suggests, a global leadership class that can answer essential questions: How much leverage should be allowed? Can we preserve the development model in which certain nations pile up giant reserves and park them in the U.S.?[/i]
I just had a great idea. Why don’t we just print up $700B and delegate all sorts of powers to that global leadership class and see what they come up with? Does David Brooks even read what he writes?
I see lots of talk from our elites about the values of democracy. Does it not occur to them that the market is the ultimate democracy? Wait a minute; actually, it has.
We don’t need “a global leadership class.” We do international agreement on stronger, more effective capital standards for large financial institutions (including banks, securities firms, and insurance companies).
Why an international agreement? If the United States and other countries seek to raise standards unilaterally, their financial institutions will caterwaul about being put at a competitive disadvantage. That’s a debatable argument, but it carries weight with financial regulators. International agreement facilitates higher, sounder national standards.
The international agreements I refer to are not treaties and do not have the force of law. But regulators, having reached agreement in principle among themselves, go back to their own countries and take action accordingly.
The process is not perfect, but it’s better than the alternative. And in a world of cross-border financial institutions, we need it.
In #3, make that “We do NEED international agreement on stronger, more effective capital standards for large financial institutions.”
Gee, I think when your oldest ally is sorry he didn’t set off more bombs in the 70s and won’t rule out doing it again, maybe talking about him makes sense even if the bankers are scared.
In actuality, who we elect in November will be both a result of the recent financial debacle, and will also affect it as we move post-election.
Obama is moving ahead. In my opinon, Senator McCain has “pulled in his horns” on campaigning. Reason? He has decided that he does not wish to preside over the probable collapse of the Republic, and does not want that as his legacy. At 72 years old, he does not have the time left to “correct” it, and so he has decided to let Obama have the Presidency, with only token resistance. I believe McCain has decided to let Obama have the legacy. McCain doesnt want it.
#6
Speaking for myself, I certainly wouldn’t want to be president in 2008 but for a member of the ruling class to have that sentiment is a very disturbing vote of no-confidence.
I actually thought this when the Republicans fielded such a weak group of candidates to begin with. Nobody with any real good prospects wants to be within 100 miles of the White House when the chickens start coming home to roost. OTOH, the political class in a democracy is always going to trend downward. It could be there’s nobody stronger on the ticket because there is nobody stronger, period.
It could also be the case that McCain is just getting old and tired. Several physicians I know say he doesn’t look good to them in comparison with other 72 year olds.
Very few people of whatever political persuasion would want to put themselves and their families, friends, etc. the media destruction that results when one declares for public office, especially at a national level. I’m not talking about tough grilling on policy issues and the candidate’s character issues – all fair targets. I’m talking about the personal attacks and dirt digging that the political hacks and media hounds resort to. They practically went beserk going after anything and everything with Gov. Palin, from whether she was really Trig’s mother to her children, etc. Who would want to, or could, put their family through this? Very few of us can stand the scrutiny on areas that have nothing to do with political and character issues. No wonder fewer and fewer want to put themselves through that.
If we were dealing only with Ayers it would be Obama made a mistake, instead we have ACORN (Obama has a long history with ACORN), Wright, Phlager, Rezko, Farakan, Raines, and Johnson to name a few. If Obama can’t deal with corruption in Chicago or recognize it in DC how will he deal with it on Wall Street?
The market is now correcting and punishing those who violated sound monetary principals. I watched the S&L;”crises” and this has many of the same hall marks. People find that which is unregulated, under regulated or they seek to bend the regulations, and throwing, any semblance of morality and principle out the window, connive to thier personel gain. You can’t stop human greed or stupidity I don’t care what the level of leadership. People always belive in the next bigger fool and that fool is never them. That is why it is individuals that are responsible for there own will being. If you are investing in a $100,000 house and can’t aford $200 bucks for a lawyer to tell you if it is a good deal and the ups and down sides you should not invest until you can afford a lawyer. I wonder what the next debacle will be. Gold? Energy? Food?
Well gosh, maybe the candidates ought to consult with solipsistic David Brooks on what books he is reading so they can address whatever bee might be in his bonnet at any particular moment.
“Well gosh, maybe the candidates ought to consult with solipsistic David Brooks on what books he is reading so they can address whatever bee might be in his bonnet at any particular moment.”
—Jeffersonian [#10]
Bet you didn’t criticize Brooks back when he wrote his hatchet-job on the Clintons?
But why think about substance? It’s so much cozier to ad hominate, isn’t it?