Global financial turmoil and the United States

by , under All categories, Enrique

Owing to the financial turmoil that has unsettled global markets and put a squeeze on credit, a valid question arises: who will be the winners and the losers?

I do not believe that we are going to head for a 1930-type depression. However, I cannot fail to recognize a parallel with what happened with the demise of the Soviet Union in the early 1990s and the United States today. Certainly both are two different cases but they share something in common: their fall from grace as the strongest economic (USA) and military power (USA/USSR) in the world.

You do not have to be an economist to understand that a debt of $10 trillion is untenable to keep financing costly war efforts abroad. Iraq alone is costing the US taxpayers close to $1 trillion.

So what does this all mean? It means that the economic power of the US will shift to Asia (China) and to Europe at the cost of the former. So, President George W. Bush is not only responsible for plundering the country into a war in Iraq, but causing the demise of the Untied States as the strongest economic power on Earth.

The November 4 presidential elections will be a watershed for the future of the United States. It can chose the same path (McCain) or a new one (Obama). Probably one of the scariest things about the new path is that we do not know what it is.

  1. DeTant Blomhat

    It half looks to me that if the crunch continues in the USA the last week of campaigning will be “please vote for the other guy”… Looking at the popularity of the decisions they’re making in Congress there might be a totally different world out there.

    But – closer to home – whats your outlook on the issues coming up in the municipal elections? And whats your bet on if the balance of power will change. Have you triued the vaalikone’s?

  2. Enrique

    It will be an interesting municipal election in Finland. I have not followed events as closely as I wish, but certainly the ruling parties are trying to keep a lid on things before they blow over. One good news is that banks in Finland are not as in sorry state as in the early 1990s. However, we will know many things after the elections. If unemployment will rise in Finland due to the global economic slowdown, by how much will it grow? Does this mean that the government will raise taxes to deal with higher jobless claims? As we spoke before, if in very good economic times Finland has not been able to lower unemployment before 6%, what will it mean when things get ugly?

  3. DeTant Blomhat

    But it cannot be so – “we need more workers” so how can there be unemployment? Gets a bit schizophrenic 😉

    What I am surprised about is that the big parties have been relatively silent, it seems they are expecting the status quo to remain, though for the parliamentary election they usually tend to make much more noise. It seems as if the “big three” are content with themselves, but it is peculiar as the same laying in the fire cost the SDP so many seats in the last parliamentary elections… well, its still a few weeks to go. Maybe they got all jittery over the election funding scandal.

  4. Enrique

    I guess so, DeTant, but the question remains: Do we have enough workers for specific professions that are facing a shortage at the moment.
    I think it is to their favor that the “big 3” are keeping silent. All the bad stuff will start to come out after the elections. In the US it is the same thing.

  5. Kulkuri

    I wish that the people in the United States would see things as clearly as those in other countries.

    The definition of insanity is doing the same thing over and over again and expecting a different result. I will be voting for change, not that I voted for the current occupant of the White House. I’ve done some crazy things, but not that crazy!!

  6. Enrique

    Hi Kulkuri, welcome to Migrant Tales. Looks like you got a very interesting Finnish name. Yes, I agree — after the ruinous Bush W. years it is time for a change big time. What we have seen in the White House since 9/11 is total insanity.

  7. Kulkuri

    Kulkuri is my internet nom de plume. I have been reading your column in The New World Finn since you started. That’s where I got the url for your blog and thought I’d check it out.