Tuesday, January 13, 2009

Stimulus Bill Must Think Outside The Nation's Borders


Americans are feeling the economic pinch, but, in many cases, the decisions made in Washington may effect the rest of the world more deeply. In the current edition of The American Prospect, Washington Post columnist Harold Meyerson calls for a "Global New Deal".

Using the example of the American Insurance Group (AIG) and the ability to use its global tentacles to effectively be a company without a country to regulate its business, Meyerson constructs an argument that has received little attention nationwide.

Barack Obama may well seek a new New Deal to right a profoundly dysfunctional American economy. But he faces one constraint that Franklin Roosevelt didn't have to confront in the 1930s: The economy that Roosevelt saved was fundamentally a national economy that could be altered by national policies. The economy that Obama must fix, by contrast, has national dimensions that can be altered by national policies, but in matters ranging from corporate conduct to consumer safety to Americans' incomes, not to mention global warming, purely national solutions no longer suffice. To fix America today requires fixing global systems. The next New Deal won't work if it's only American.

Under the concepts of globalization, a multinational corporation is able to evade basic regulatory oversight that a nationally-based business would have to cooperate.

A report from the Center for American Progress deals more closely with the topic from the standpoint of foreign economies, saying Franklin D. Roosevelt's response to the Great Depression needs to be applied globally.

This common political imperative has created the conditions for an unprecedented exercise in international economic cooperation aimed at stabilizing the world economy and placing it on a stronger and more sustainable footing through a series of structural reforms. This is precisely the approach the creators of the New Deal took to our national economic crisis in the 1930s.

Americans may have a narrow view of the global ramifications of its own financial demise, but this fact need not preclude the newly elected president from scratching it from the national dialogue.

The European economies of Germany, France and England are searching for ways to stimulate their economies, while reports this past weekend say that Greece, Ireland and Spain may have their AAA-credit ratings downgraded because of worsening recessions. Of course, these are relatively rich nations as compared to say, Latin American countries, which are relatively stable, but are all encountering lowered gross domestic product figures in the new year.

Some economic isolationists may deny the inevitability of globalization, yet it exists. The effort to fix the U.S. economy needs to add the discussion of world markets in our national dialogu, because people around the world are beginning to argue that what is good for the United States is not necessarily good for the rest of the world

This article and others can be found at The Commonwealth Club of California's blog commonwealthclub.blogspot.com

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