Reflecting On Economic Meltdown, International Newspapers Hold U.S. Responsible

On Monday, the National Bureau of Economic Research said the United States has been in a recession since last December. With a financial crisis of this magnitude hitting the world's biggest economy, it's no surprise that nations across the globe are also feeling the heat. Here's what some recent editorials have had to say on the topic.

Japan
Political will on trade (The Japan Times): Japan will have to take somewhat unpopular actions in response to a "global financial crisis triggered by the subprime mortgage fiasco in the United States."

Japan will have to accept large cuts in its tariffs on agricultural imports against strong resistance from domestic farmers. The government needs to consider how to overcome pains caused by the trade talks while strengthening Japan's farm sector. These cannot be achieved without strong political will and ingenuity.

India
A persisting weakness (The Hindu): It is no surprise that the U.S. Dollar is beginning to fall from a "position of pre-eminence." While the greenback will continue to play a powerful role in international trade, it will likely have to compete alongside other currencies to an extent not seen since the end of World War II.

The slowing down of the U.S. economy and the collapse of the housing bubble has underpinned the dollar's weakness. As always, the interest rate policies of central banks will play a major role in determining future currency alignments. The decline of the dollar may or may not be permanent but its persisting weakness would pose major challenges for India.

South Korea
Bailout Package (The Korea Times): The Korea Asset Management Corporation (KAMCO), which is state-run, will "take over bad loans from struggling savings banks, signaling the start of public fund injections into the banking sector."

No doubt the bailout package is designed to help many ailing savings banks dispose of their exposure to risky project financing in the aftermath of the global credit crisis. The banks will be able to sell off their bad debts so that they can improve their financial health to better tide over the persisting financial turmoil originating from the U.S. subprime mortgage woes.

Indonesia
Stepping up banking oversight (The Jakarta Post): The central bank must increasingly monitor its industry so as to avoid some of the dangerously risky actions taken by some failing banks.

Bank Indonesia (BI) should conduct intensive supervision by placing on-site supervisors at most banks. Such vigorous oversight is especially needed at this point in time when our financial sector is so vulnerable to the global financial turmoil.

United Kingdom
Affairs of state (Financial Times): As recently as last year, politicians were thrilled with London's financial institutions. Now -- not so much.

As Britain slides into what could be a deep and prolonged recession, bankers are becoming public hate figures. Labour and the opposition Conservatives sense the anger. Both the main political parties are struggling with their response.

South Africa
Expect a rate cut (Business Day): In a somewhat surprising move, the Reserve Bank will likely cut interest rates next week, in an attempt to "jolt" the nation "out of what could be a prolonged recession."

News over the past week has made it clear that [South Africa] will be increasingly drawn into the global downturn, through no fault of its own. When that is added to the growing pile of evidence that domestic inflation is going to fall faster than expected, the case for a rate cut looks pretty solid.

Comments

[Paul]

The fact is that the world no longer trusts the US financial system. If we do not have the laws or the discipline to enforce them, why would anyone put money into the US economy?

The result will be that the financial decisions affecting all Americans will now be made elsewhere - where there is adult supervision.

This is a direct result of the conservative philosophy that states that government has no productive role to play in a modern society.

The rest of the world knows differently and the most successful societies have a far larger role for government. And this works - look at Europe and Japan.

[Shortyfuse]

Yep, and I , like Tomas, feel that until the treasonist criminals that brought America and the world to its knees pay for their deeds, nothing will change. I mean don't you think it is treason for countries to have a designed policy to bring its people to their knees in the name of a globalized policy that is tuned to enrich Corporations.
When we first heard about free trade (Hitler actually) we thought that we would get the best craftmanship of other countries. We did not know we would lose jobs and our rights.
THE LAST TEXAS REPUBLICAN LEGISLATORS PASSED 600 NEW LAWS.
And England there was no such thing as Mad Cow . It is all just the part of globalism that makes us dependent on each other for things.

[DuganS1]

Congress did not "eliminate all laws which controlled the lenders." Where did that come from? About Greenspan, except for the period from Nov 1998-June 1999 because of the Asian crisis, he kept the discount rate at or above 5.25% from mid-1994 thru January 2001. That did not cause the tech bubble. Your right, however, that he does deserve a lot of blame for the absurdly low rates following Sept 11, 2001 all the way to mid-2005. He was way behind the curve in 2004 and 2005 and could have shut down the housing boom IMO by mid-2005 instead of by early summer 2006. This could have saved a lot of pain. I do not blame Greenspan by the way for the lax lending standards. That is the fault of the mortgage companies, the bond raters, and the buyers of the bonds.

[NABNYC]

A small group of people in this country have caused this depression. They've stolen so much of the money from the businesses, from the stock market, from the treasury of the U.S., and cheered the neocon Bush regime in borrowing so much money from other countries, that the U.S. is now officially dead broke and busted. These same people, the top people on Wall Street, have extended their criminal enterprise throughout the world, selling off "bundled" mortgages in which the absurd loans, certain to default, are hidden inside some stable loans so they could fool the world into buying assets with little value, paying ten, 100, or 1000 times the actual value. All that money went to the Wall Street Boys with a big chunk paid by them to Congress so Congress would look the other way. Which they did. Oh yeah -- and they paid themselves hundreds of millions in "bonuses" too.

Where's the money now? Somebody sold off loans at $500,000 each to other people. Somebody got paid. Where's that money? Hidden in secret private equity funds, tax-free, tucked away in other countries. We've been robbed.

The only question that remains is whether a new government will appoint prosecutors to investigate, prosecute, and throw these people in prison and get back some of our money. Politicians as well as CEOs must be investigated so prosecutors must be independent of Congress.

This didn't "just happen." We've been robbed. There's the bad guys. Go get them.

[tomas0808]

Yep, and until I see some of these people tossed in jail I would urge all Americans to treat banks, corporations, advertisers, and the politicians who enable them to continue thieving as their MORTAL ENEMIES and DO NOT TRUST anything they say. Advertisements are LIES. Personally, I don't like being lied to

[schatsie]

yes there is a money trail and I would love to research it.... and the tax avoidance is really a slap in the face to the working class....

[kstuff]

Oh look! Other countries actually help their businesses in meaningful ways. I'm so jealous.

[FreedomCorpse]

you noticed that too. Another little tidbit: China subsidizes their exporters.

[canarypapers]

Actually, your gratitude is misplaced.

Send your thank-you notes to Phil Gramm and Republican-led Congress of 2000, for passing an amendment called the "Commodity Futures Modernization Act" on December 15, 2000. (Ever hear of credit default swaps? How about bucket shops? Until 2000, they were illegal in every state for nearly 100 years. )

And while you're thanking the crooks who snuck this Trojan horse into a 11,000 spending bill right before Christmas break in 2000, be sure to also thank them for the Enron Loophole, which was tacked into the Commodity Futures Modernization Act of 2000. It has made billions and billions of dollars for the speculators it enabled to manipulate gas & oil prices (e.g. this summer's gouge-fest at the pumps).

The surprise isn't that our economy tanked in the wake of these unscrupulous laws. It's that it took a full 8 years for the house of cards to fall. Many respected economists warned of this, but they were ignored. After all, there still billions to be bilked before the house of cards fell. Even today, they're still trying to bilk the system.

Much as you seem to like blaming minorities, poor people and the current Democratic Congress for all hideous damage that Bush, Cheney & Co. have done to destroy this country (and the world) your theory doesn't hold water.

[DuganS1]

Maybe you're not aware, but speculating in commodities was legal a long long time before 2000 and that Enron loophole had absolutely nothing to do with the runup in the price of oil earlier this year. The Commodity Futures Modernization Act was passed so investors could trade single stock futures, and those futures contracts by the way are barely even used today.

[schatsie]

maybe you are not aware, but the legislature WRITES the LAWS... The executive, the DECIDER did not enforce any laws, just wrote the signing statements and cut the staffing or as at DOJ, put the repugs in staff positions (staff with no qualifications, refer to the CPA in Iraq for examples).

There needs to be a way to overturn these staff hirings that were not warranted... The resumes would clearly demonstrate that they had no expertise and the performance would not reflect performance...

[FreedomCorpse]

good luck believing what you wrote.

[BSERIUS]

Thanks Barany Frank, Chris Dodd, 2 years of Pelosi , Reid, ACORN and the Affrimative action mortgages with no qualifications .

[NABNYC]

"Affirmative action" mortgages? Does that refer to the $700 billion given to the Department Goldman Sachs (formerly the U.S. Treasury) no collateral, no return, no questions, no restrictions? Or is this just the fat guy on the radio's mantra about the depression being caused because Lincoln freed the slaves -- after all, how can "our" plantations expect to thrive if they have to pay wages to the workers?

The whole "subprime" mortgage is a tiny part of the problem. The real problem is that Greenspan held down interest rates deliberately to create a real estate bubble, and then Congress eliminated all laws which controlled the lenders. These loans currently in default are because Greenspan's bubble burst. He caused it. Maybe we should him Bubble Boy, because he caused the tech one in 2000 too. The main people responsible for this depression are Greenspan, the corrupt Congress, and the Wall Street Boys. As is usually the case, the rich steal every penny and everybody else goes away broke.

[MilwaukeeDan]

NABNYC, don't waste your time with this guy, to him, everything is a partisan issue.