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.
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.
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.
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.
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.
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...
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.