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Re: <nettime> Is the US declining too fast?
Keith Hart on Sat, 20 Sep 2008 17:55:47 +0200 (CEST)


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Re: <nettime> Is the US declining too fast?



Thanks for your reply, Felix. I am on the road in California and get
to read the latest news in the small hours when I can't sleep for jet
lag. My original post was sent on Monday after Lehman had been cut
loose and Merill Lynch taken over, but before the nationalisation of
AIG and certainly long before the SEC forced short-selling hedge funds
to buy back investment bank shares, thereby producing a bounce whose
consequences could mean even less credit being available than before.
Any attempt to assess winners and losers, including the US, Europe and
China, under these circumstances would obviously be foolish.

I would never say that is just about funny money, while the real
economy chugs along unaffected. But equally the financial doomsayers
who say that blowing up the banks would be the end of the world
economy are exaggerating. And the medium-term future of the relative
strength in global terms of the US, EU and China is moot (which was
the point of my original post).

My reference to the US presidential election was meant to highlight
the scope to rapid change there in response to this economic crisis.
And while I pen this note, I learn that Mbeki has been forced to
resign, showing that politics in South Africa has the capacity for
brutal change comparable to Paulson's measures. The first of these
contrasts starkly with say Labour in Britain or the schlerotic public
instiotutions of Europe in general. The second may have had something
to do with the timing of the ANC's move, even if it was triggered
off by a judge's decision. It remains to be seen whether China's
politburo has the flexibility and means of acting decisively when
faced with real economic pressure. Certainly their actions this week
have been reactive, insecure and possibly mistaken. This could be said
of Paulson too. But I still believe that the US has the ability to
come out of this more strongly than its competitors for reasons that
include its real economy and its political institutions.

Keith





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