In the article below, the underlying view of the author, which leads him to his negative forecast and conclusion in an otherwise insightful analysis, is that countries' fiscal policies are and will remain motivated by self interest (rather than "enlightened self interest"). This is an anachronism. In the real world, economists and policymakers have long realized the economic interdependence of all nations which has prompted them to support and aid the ones in need. History has taught them the painful lesson deriving from isolationism. Clearly, if any nations (and especially an economic superpower like Germany) revert to the latter, it will certainly spell global financial havoc. But is modern-day history in the habit of stepping backwards?!
True, there will be further financial crises in the decades ahead, but history tells me that these will be brought on mainly by new and hitherto unseen problems, not so much by repeating the mistakes of the past.
Hence the importance of knowing one's history! In the words of Bahá'u'lláh: "The past is the mirror of the future. Gaze ye therein and be apprised thereof" (Tabernacle, 10).
Excerpts from an article in the Toronto Star:
Baleful Greek chorus heralds economic doom
Fri Mar 05 2010
Immanuel Wallerstein
[E]veryone is pointing the finger at someone else....
The Germans [Europe's economic powerhouse and mainstay] don't want [to do anything - i.e. bail out Greece - for the reason that] the internal pressures of [Germany's] citizens who see any help to Greece as money that is being taken away from them, when they too are feeling an economic squeeze....
What these multiple crosscutting analyses of short-term blame and short-term gain miss is that the problem is worldwide and structural. Banks exist to make money. The game Goldman Sachs has been playing (and other banks as well) has...been...with many, many countries....
This is because governments wish to survive... And if they don't take in enough taxes...(both because they don't want to raise taxes further and because a weaker economy means less overall tax income), they must "massage" their accounts by borrowing....
Greece's problems are indeed Germany's problems. Germany's problems are indeed the United States' problems. And the United States' problems are indeed the world's problems....
What is going on is a worldwide game of chicken. Everyone seems to be waiting for who will flinch first. Someone is going to make a mistake. And then we'll have what the American economist Barry Eichengreen has called "the mother of all financial crises." Even China will be affected by that one.
Immanuel Wallerstein, senior research scholar at Yale University, is author of The Decline of American Power: The U.S. in a Chaotic World (New Press).
Source: http://www.thestar.com/opinion/article/775221--baleful-greek-chorus-heralds-economic-doom
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