Monday, September 22, 2008

BRIC (Brazil, Russia, India, China)

And what have we heard from the new centers of wealth and power — China, India, Brazil, Russia, the Gulf states — about America’s financial agony over the past week? Zilch.

Well, not quite. Asked about the crisis, Luiz Inácio Lula da Silva, the Brazilian president, said: “What crisis? Go ask Bush.”

Thanks, Lula. Brazil is sitting on $208 billion of its own in reserves, so perhaps Lula would say his flippancy is justified. But I don’t think it is.[...]

The world has changed in the past decade. There’s been a steady transfer of wealth away from the United States in a shift most Americans have not yet grasped. But there has been no accompanying transfer of responsibility. New powers are free-riding as if it were still the American century.[...]

Let’s be clear: this is an American mess forged by the American genius for new-fangled financial instruments in an era where the mantra has been that government is dumb and the markets are smart and risk is non-existent. The responsibility for undoing the debacle is chiefly American, too.[...]

I know, you reap what you sow. Nobody’s itching to help the Bush administration. World central banks did inject billions in concerted action to help stabilize money markets. But the U.S. has essentially been on its own. Now foreign banks with U.S. affiliates will want a slice of the $700 billion bailout. That doesn’t make sense until the burden of this rescue starts reflecting a globalized world.

The Fleecing of America

Cash for Trash