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.
In terms of the consistency of the global economic message, it's one rule for the poor and another one for the rich. How did America get into the position of resembling a huge emerging market, gorging on consumer goods that it cannot afford, and borrowing other people's money to sustain this lifestyle?
In traditional economics, countries are poor because they lack capital. This capital constraint prevents people from getting the best out of their natural talents. Yet countries face a dilemma -- in order to accumulate capital, they need to generate a current account surplus, which usually comes from saving more than they invest.
But the standard of living falls if a poor country saves rather than invests - which is hardly a national objective. To get around this conundrum, traditionally, the poor countries import capital from the rich ones, which they fuse with their own labour to make good for sale.
They can then sell these goods back to the rich countries and generate the cash to pay back the loan and maybe have a bit left over to re-invest. This, in a nutshell, is one of the principal ideas behind GATT, free trade, and the present trends towards more globalisation. (There are others, but let us stick to this for a while.)
In this globalized world, the US -- the richest country on earth -- should be a net lender to the poorer regions of the globe. It should be running a current account surplus, have a very strong currency, have no debts, and enjoy permanently low interest rates, kept down by its huge savings.
But the opposite is the case. The US is sucking in capital from much poorer countries that arguably need it more. It is running the largest current account deficit in economic history and is allowing its currency to devalue constantly - despite the White House suggesting that it is wedded to a strong dollar policy.
At the same time, the US is printing IOUs to the rest of the world in order to finance itself. And, rather than urging the American people to tighten their belts, as it does when other emerging economies find themselves in difficulties, the American authorities are telling their people to borrow even more. To put this in context, the US needs to borrow more than $7 billion a day just to sustain its current lifestyle.
We now have the confusing spectacle of the richest country in the world behaving like one of the poorest and most irresponsible. It is trying to maintain a lifestyle that it simply cannot afford and, in doing so, it is creating the conditions for the decline of American power.
Despite all talk about rectitude, financial probity and the need for transparency and responsibility, the US is behaving like a large emerging market, and no amount of gushing coverage of its presidential election can disguise this. No country ever borrowed its way to prosperity as the US is trying to do now.
Something will have to give.
David McWilliams is author of The Pope's Children (John Wiley and Sons), available now.